Is it possible to record a retainer in Quicken for Windows (not online)

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AdamJ
AdamJ Member
edited April 2023 in Before you Buy

I want to record a retainer such as a lawyer would use. Can Quicken do this?

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  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
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    Not sure what your question is …

    please explain more of what you want to do with the "retainer"

    QWin - R54.16 - Win10

  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    edited March 2023
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    When I needed to retain the services of an attorney to settle my father-in-law's estate I did the following:

    1. Set up a manual (offline) Credit Card (I could have set it up as a Cash or Savings account, instead) which I named "Legal Fees" with a $0.00 Opening Balance.
    2. Set up a custom expense Category which I named "Legal Fees".
    3. Set up a custom subcategory under the Legal Fees category which I named "Probate".
    4. A payment transaction (check to the attorney) was entered into the checking account register as a transfer to the Legal Fees account giving it a positive balance. At this point it is not yet an expense….it just transfers the cash to another person for holding.
    5. Then when I got billing statements from the attorney I would enter them as charge transactions in the Legal Fees account using the subcategory of "Probate", reducing the positive balance. I would enter a summary description of what each billed item was for in the Memo field. Quicken will capture these as the actual expenses.
    6. If the retainer were to be fully depleted, the attorney would send me a bill to replenish the retainer which I would enter as a transfer from checking to the Legal Fees account.
    7. When the estate was closed out there were still some retainer funds in the lawyer's possession which was then refunded to me. I then entered a transaction for that refund as a deposit from the attorney to my checking account with the money being transaferred from the Legal Fees account. Then I closed the Legal Fees account.

    I did it this way because paying a retainer to the attorney is not really an expense. It is really more like a transfer of cash from a spending account (checking) to a savings account (the Probate account). It's remains a credit in the account until the attorney starts to bill for the individual services and deducts them from the retainer.

    If you will be receiving the retainer from a client/customer and will be providing services to that person you might want to follow a similar process but instead set it up a bit differently:

    1. Set up a manual Liability account that you could name "Retainers" or something like that.
    2. Set up a new custom income category named "Legal Fees" (or whatever would better represent what the income is for/from).
    3. If you want you could also set up a custom sub-category under "Legal Fees."
    4. If the services rendered will be taxable income, make sure to associate the correct tax line item to the category or sub-category.
    5. When the retainer is received from the client/customer, enter a deposit transaction to the checking account as a transfer to the Retainers account. This will create a debt balance in the Retainers account as it should because it is not yet income…you are simply holding the client's/customer's cash as a security deposit at this point and it must be paid back to the client/customer if it is not used making it a debt/liability owed to the client/customer.
    6. When you bill the client/customer, enter deposit transactions for them into the Retainers account and use the new customer category (or sub-category) for it. Now it will show up in Quicken as income and will decrease the amount of the liability owed to the client/customer.
    7. If the retainer is depleted because of billing charges to the customer/client and there will be retainer replenishment then do step 4, again.
    8. If the service to the customer/client is completed and there is retainer remaining, enter a payment transaction in the checking account register for the refunded amount and set it up as a transfer from the Retainers account. This will zero out the amount of liability remaining (and the Retainers account can then be closed out) without causing Quicken to capture and report this as an expense….it is simply a transfer because it really is not an expense.

    At least, that is how I would probably proceed.

    Did this answer your question?

    (Quicken Classic Premier Subscription: R55.15 on Windows 11)

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