Tracking Retainers

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Monchilla makes it easy to track retainers held in a trust account from the time the client gives you the money until it is earned or returned.

Expand Chart of Accounts

  1. Click the Accounting tab.


  2. On the Accounts page, select Assets and click the New Account button.


  3. In the Account Name field, enter Trust Bank Account. In the Opening Balance field, enter 0.00. Click Save.


  4. Scroll down the list of accounts and select Liability.


  5. Scroll back up to the top and click the New Account button.


  6. In the Account Name field, enter Retainers. In the Opening Balance field, enter 0.00. Click Save.


  7. If you want to track the retainer balance for each client, create a new account in the same manner as above. In the account list, select Retainers, then click the New Account button. In the Account Name field, enter the name of the client.

    If you are tracking the balance of the client's retainer elsewhere, skip this step.

Record Retainers Paid

When your client gives you money to hold on retainer:

  1. Click the Income tab.


  2. On the Income page, click the green Income button.


  3. In the Income window, enter the following information in the fields, then click Save.
    Note: Next to the Account field name, click the Expand link to show From Account and To Account fields.
  • Amount: amount of the retainer paid
  • Date: The date the retainer was provided by the client
  • From Account: Retainers (or the client-specific retainer account)
  • To Account: Trust Bank Account

Invoice Customer

When you are ready to bill the customer for services provided, create an invoice, but use the Retainers account you created as the To: account. This will decrease the retainer account balance (liability accounts, like credit cards get a smaller balance when paid).

You should also make sure the Term is set to Immediate Payment to indicate that you are being paid for this work at the time of the invoice.

Transfer Funds to the Firm

Once you have earned the funds held in retainer you should transfer the funds from the Trust Bank Account to your business checking account. To record the transfer in your books:

  1. Click the Income tab.


  2. On the Income page, click the green Income button.


  3. In the Income window, enter the following information in the fields, then click Save.
    Note: Next to the Account field name, click the Expand link to show From Account and To Account fiel
    ds.
  • Amount: The amount of the invoice you created in the previous section
  • Date: The date you will transfer the funds
  • From Account: Trust Bank Account
  • To Account: Primary Checking Account

You've successfully tracked retainers paid by clients.

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