Refunding client retainers and payments

You might have recorded a general payment or a retainer from a client in CORE and later been asked to refund it entirely or partially. In case of a complete refund or cancelling the entire payment, you can delete payments or, better still, void them so that a record of that action is maintained in the database. This can be done on the Payments screen. Check CORE Help Center > Payments for details.

Refund Retainers in CORE

After the project is completed, if there is a retainer amount remaining, then you can easily refund it to the client. Go to Invoices > Credit Memos and select the Refund Retainer option. After selecting the desired client or project, you will see all the available retainers and be able to enter the amount to be refunded. Check CORE Help Center > Credit Memos for details.

 

This refunded retainer will be available on the Bill Payments screen to process the refund payment to the client. 

The next step is to enter a bill payment because in the background CORE creates a system vendor bill for the above retainer refund transaction. Only then it becomes available for cutting a check to the client. If you have an Accounting subscription in CORE, you can follow the steps below. If you do not have it, you can simply cut a check from your accounting software.

  1. On the Bill Payments screen, click Create New.
  2. Choose your client as the Payee and click Continue.
  3. On the Create Bill Payments screen, enter the bank account to be used for the refund and select the Method as Check.
  4. Under the Bills section, select the refund retainer bill (type Credit Memo) and enter the refund amount as the Pay Amount. Click Save.
  5. Back in the list view, click More > Print Checks to print the client's check. Check CORE Help Center > Checks for details.

Refund Retainers to Third Parties

What if you need to refund a retainer to a third party? 

While considering the situation, we determined that it is always best to be able to reflect all project transactions clearly. A detailed audit trail can be vital when questioned about how retainer funds were used. Essentially, you are using a retainer to pay a third party. Therefore, it is not actually a refund of the retainer.

The simplest method is to create a vendor bill for the third-party. Then, create a check to pay that vendor bill. The vendor bill is associated as an expense to the project. From there, the expense can be simply invoiced and paid by the retainer associated with that client and project. This is a much cleaner, direct way to document the use of a retainer to pay a third-party while capturing proper trust accounting.

The winning strategy of any company is to evolve its way of thinking to affect operations to be better, faster, and more efficient. Without the understanding, evaluation, and application of data, organizations cannot measure growth or success. Likewise, companies cannot see opportunities to tighten operational productivity and increase profits, all while maintaining the integrity of their books. For additional information, please refer to the CORE Help Center.

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