How to record payment out of the retainer received which is a trust liablility account and relates to the customer ?

I appreciate your time for reaching out in the Community for assistance, Helen. I’ve got the information you need to ensure this payment is documented accurately in QuickBooks.

To record the payment out of the retainer received, you’ll want to create a special item to track expenses. Before that, you need to enable the Track expenses and items by customer option under your Account and settings to set up the required item. Thus, your second query is available.

Here’s how:

1. Within your company, select the Gear icon.
2. Go to your Account and settings, then choose Expenses.
3. In the Bills and expenses section, press the Pencil icon.
4. Activate the Track expenses and items by customer option.
5. Select Save and Done after.
   

Then, you can make an item to track the transaction. Check out the instructions below to do it:

1. Go back to the Gear icon and select Products and Services.
2. Click New.
3. Select Non-inventory or Service.
4. Enter a name.
5. Uncheck the I sell this product/service to my customers checkbox.
6. From the Expense account dropdown menu, select your Trust liability account.
7. Hit Save and close.

When done, you can now pay the customer's expenses by following these steps:

1. Select the + New button, then choose Expense.
2. Pick the payee from the dropdown menu.
3. Click the bank payment account.
4. Select the item from the Products/Services.
5. Enter the rate, amount, or other details, then save.

You can read this guide for more information about the process: Record a retainer or deposit.

Furthermore, here’s a reference on how to access and review transactions associated with the customer you wish to track: How can I track Profit and Loss by Customer?

I’m always here to help if you need further assistance or have other concerns besides payments. Just add them to your reply below.