Setting up and refunding retainers

Often, organizations remain focused on the way things have “always been done.” However, when transitioning to a new software or improving the use of an application to increase the efficiency and analytics of business operations, companies must begin to rethink how to continue forward. This new way of thinking sometimes comes about based on the need to document and record financial transactions for accounting. Thus, it’s essential to find a new approach to structuring transactions. This is particularly important when it comes to handling and refunding retainers.

Retainers for Positive Cash Flow

Many industries accept a retainer at the beginning of a project, matter, or engagement, ensuring that the client remains ahead on payments throughout the project. Retainers can be applied to each invoice and requested at milestones throughout the service. Or retainers can be held until the final invoice. Every retainer situation is as unique as the client.

Retainers in CORE

In the Retainers screen in CORE, simply click on the Request Retainer button. Enter the client and project (optional), retainer amount needed, and then process the request. This creates and sends out a retainer invoice to the client.

When the client pays the retainer, go to the Payments screen and enter that payment by selecting 'Apply as retainer.' This marks the retainer as received from the client. Now, the retainer is available for use on the Invoices screen while creating an invoice or by applying it later on an invoice in the Payments screen. This is the traditional method of accepting and using retainers in CORE.

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.


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

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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