Billing Pre-Payments (Retainers and Deposits)

Retainers, deposits, and overpayments are managed using adjustment types — see Tracking Retainers, Deposits, and Credits to set one up first.

We recommend a Retainer (or Deposit) type to track the ongoing balance, and — only if your firm invoices clients through Factor for retainers — a separate Initial Retainer (or Initial Deposit) type used just for that invoice. Never record an actual payment using the Initial type.

If you use QuickBooks Online: create a liability account for unearned revenue, create a Product/Service mapped to it, and link your adjustment type(s) to it.

Most firms collect a retainer outside Factor — at contract signing, from an overpayment, etc. — and just record the balance on the project:

If you're connected to QuickBooks Online and the payment didn't go through a Factor invoice, manually enter the amount into your QBO liability account too — Factor only updates QBO automatically when the retainer is invoiced.

If your firm wants to send a formal invoice requesting the retainer instead of collecting it informally:

This automatically increases your QBO liability balance if integrated. Either way, still record the starting balance above so it's available for future invoices.

Only one adjustment per invoice. Don't apply an amount that would bring the invoice total below zero — Factor won't let you finalize an invoice with a negative total, when QuickBooks Online is connected. Finalizing reduces the project's balance, and your QBO liability balance if integrated.