Overview of Retainer Activity

Most firms consider a Retainer to be an advance payment for services rendered.  In other words, the Retainer is deposited directly into the operating account as income to the firm.  Some firms consider this as a non-refundable deposit while others agree to bill against it. Occasionally, a client will overpay an Invoice or may pay the same Invoice twice.  If this is an ongoing Matter, the overpayment would be treated as a Retainer Deposit.

Retainer Deposits (RDP)

To enter a Retainer Deposit, use the AR Entry Program (AR Manager, NEW Button) and use RDP in the Code field.  When a Retainer Deposit is entered and saved, the Retainer account for the Client-Matter is automatically updated.  The updated amount is reflected in all Client-Matter screens and reports.  Retainer Deposits cannot be applied and posted but create General Ledger transactions upon saving.  Retainer Deposits will be available for inclusion in a Daily Deposit record for Bank Reconciliation.

Retainer Disbursements (RDS)

Retainer Disbursements are used to move money out of a Client-Matter Retainer account where the payee is someone other than the firm.  Retainer Disbursements may be created either through the AR Entry Program or the Accounts Payable - Voucher Entry Program.  To enter a Retainer Disbursement, use the RDS Accounting Code.  When a Retainer Disbursement is entered and saved, the Retainer account for the Client-Matter is automatically updated.  The updated Retainer balance is immediately reflected in all Client-Matter screens and reports.  When a Retainer Disbursement is entered and saved through the AR Entry Program, General Ledger transactions are created upon saving the transaction.  No Bank Reconciliation transactions are created - you will need to enter a manual entry through Bank Reconciliation.

Retainer Applied as Payment (RAP)

The Retainer Applied as Payment (RAP) accounting function is unique in that Retainer money is usually meant to pay off an Invoice that has not yet been generated.  When you create the RAP transaction, there are no accounts receivable against which to apply it.  If you do not create the RAP transaction prior to generating the Invoice, the Invoice will print with a Total Amount Due that is greater than what the Client actually owes.

To reflect a RAP as a payment on an Invoice to be generated, simply enter a RAP transaction through AR Entry.  When the RAP transaction is entered and saved, the Retainer account for the Client-Matter is automatically updated.  The updated Retainer balance is immediately reflected in all Client-Matter screens and reports.

Since the RAP cannot be applied at this time (no AR), you will need to generate an Invoice on the Client-Matter.  Once the Invoice has been generated and then posted, the RAP can be applied to the AR created when the Invoice is posted.

To summarize, to pay off an Invoice that has yet to be generated with Retainer money, complete the following steps in order:

1.    Make the necessary changes to work in process using the Bill Preparation Program.

2.    Go into the AR Entry Program, and enter and save, but do not apply, the amount of the RAP.

3.    Print and Post the Invoice.

4.    Apply and Post the RAP transaction to the Invoice.

Following is an example of the above:

A Divorce client pays the firm $10,000 as an advance payment.  The $10,000 should be deposited in that Client-Matter’s retainer account (RDP).  Now it is time to send the Client his first bill.  The Firm has $1,000 in fees and $500 in expenses to bill the Client.  The Client, since he has already paid the Firm in advance, would like to see an invoice which looks as follows:

            Prior Balance:                                   $0.00

            Current Charges:                               $1,500.00

            Less Retainer Applied as Payment:    $1,500.00

            Total Due:                                         $0.00

            Retainer Balance:                              $8,500.00

To accomplish this, follow steps one through five.

Retainer Transfers

You may move money between Matters by using the Retainer Transfer program.  The Retainer Transfer program allows you to move all or part of a Retainer Balance to any other Matter (regardless of the Client under which the Matter resides) without creating unnecessary General Ledger transactions and without creating “phantom” Retainer Deposits that can skew your Daily Deposit Report. To move retainer from one Matter to another, open AR Manager and access ACTION, Retainer/Trust Transfer.  Choose the Retainer option and enter the required information.  When you save the transfer, Orion will create a RTO transaction on the Matter from which the balance has been taken and a RTI on the Matter(s) to which the balance was moved.