Retainers and prepayments can be recorded in Accounting Seed as a cash receipt. When a cash receipt is created a debit to cash and a credit to Unapplied cash will be created. Accounting Seed will track pre-payments and/or retainers in the unapplied cash GL account by default.

If you would like to track retainers or pre-payments in a GL account other than unapplied cash simply override the credit gl account on the cash receipt to a pre-prepayment liability account. As cash is applied to billings the liability GL account set on the cash receipt will automatically be relived.

Summary of steps

  1. Create a cash receipt for the customer once cash has been received.
    • Set the credit gl account to a prepayment liability gl account.
    • Set the amount to equal the amount of cash received.
  2. As services are partially and/or fully completed, create a billing to customer and Post
  3. Apply the amount of the billing from the cash receipt
  4. Send an invoice to the customer if there is a remaining balance to be collected.

Sample Ledger Entries

Below is a sample of ledger entries into the general ledger when the Credit GL account on the cash receipt is overridden.

 Event  GL Accounts  Debit  Credit
 1. Create cash receipt  1000-Cash 
 2000-Prepayment 
 $100  
 $100
 2. Create Billing   1200-Accounts Receivable 
 4100-Service Revenue 
 $100  
 $100
 3. Apply cash receipt to billing   2000-Prepayment 
 1200-Accounts Receivable 
 $100  
 $100

 

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4 Comments

  • 0
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    Jeanae Remala

    I am having problems following step #1 agove. Where do I set the credit G/L account?  The Cash Receipts screen does not have anywhere for you to select the credit account, only the bank account.

  • 0
    Avatar
    Rebecca Ralls

    Hi Jeaneae, it looks like the field is either missing from your layout entirely, or for some reason, your profile does not have permission to view that field.  You (or your sys admin) should check those two things first.

    Here's where that field usually is:

    Edited by Rebecca Ralls
  • 0
    Avatar
    Jeanae Remala

    The info above says the Accounting Seed will track customer prepayments or retainers.  Does A.S. create a subledger of these so a report can be pulled for all of them?  Or do we just need to create a tracking spreadsheet outside of the system ourselves?  

  • 0
    Avatar
    Ryan Faulkingham

    Hi Jeanae,

    If you select the cash receipt type as "customer prepayment", then you can run a salesforce report on this type and even add some filters like balance is greater than 0 and maybe group by customer. If you would like some help with this, please submit a ticket to our support desk at support.accountingseed.com. 

    Thank you,

    Ryan

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