How to record client retainers for time billing
Record the receipt of an advance payment from a client to be applied against future time-based billing.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash at Bank | Asset | 5,000.00 | - |
| Unearned Client Retainers | Liability | - | 5,000.00 |
💡 Accountant's Note
The retainer is recorded as a liability until the firm performs services and bills the client for hours worked.
Practitioner & Systems Framework
💻 ERP Architecture
Link the unearned revenue account to specific project codes in the billing module.
⚠️ Audit Flags
Significant balances in unearned revenue that haven't moved in several months.
📄 Required Documentation
Bank deposit slip and signed engagement letter specifying retainer terms.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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