Skip to main content
C
canadianUser
December 27, 2020
Question

Entering advances/retainers and then apply to expenses and invoices

  • December 27, 2020
  • 1 reply
  • 0 views

I have two similar questions.

 

How do you enter an advance to an employee and then enter the receipts for the expenses they pay with those funds? e.g. I advance an employee $1,000, and every few weeks they bring me receipts for job purchases. Sometimes they return the outstanding money.

 

How do you enter a retainer for a vendor (e.g. lawyer) as an asset that can be used up when you receive a bill or as an asset that can be returned to the bank if you ask for a refund? e.g. I give a lawyer $2K to be ready to work on a project. 4 weeks later, I get a bill for $200. 4 weeks after that, I decide I don't need any further legal assistance and ask for $1,800 back.

 

Frank

1 reply

L
LauraAB
December 28, 2020

Hi Frank,

 

Thanks for sharing details about the kinds of transactions you're looking to record in QuickBooks Online and the circumstances surrounding them. I can see the importance of ensuring these are recorded and tracking properly, and my goal is to get you on your way to doing that. I'll help point you in the right direction.

 

Given the nature of these situations, checking in with an accountant is a great place to start. The reason for that is because of the layering of the employee transactions and then the fact that you'd like to record the supplier retainer as an asset. An accountant, in particular one who knows QuickBooks Online, will be best equipped to handle that.

 

When it comes to the employee transactions, you may simply need to focus on recording the employee advance and any returned money from them. If you record both the advance to the employee as one transaction and then the receipts from the employee as another, that would double the figures in your books. How your record this will also depend on whether you're running the advance through Payroll or simply writing them a cheque or giving them cash. It may be as simple as using a cheque or expense transaction to show the advance out to the employee and then using the Bank Deposit feature to record money in from them, but there may be more to it.

 

As for the vendor retainer, QuickBooks Online doesn't have a recommended way to record that sort of transaction, and the asset portion of how you'd like to record it puts it into accounting territory.

 

The good news is QuickBooks Online makes it easy to connect with an accountant. The My Accountant tab features a field where you can invite someone you're already working with as a user to your account and there's also the Find a pro to help button, which links you directly to our list of QuickBooks-certified accountants near you. Don't hesitate to take advantage of those options!

 

Wishing you the best. :)

Terms & ConditionsAccessibility statement