Apply Retainer

A guide to how the Apply Retainer function works on an Invoice level and what is paid in what order.

Vaughn avatar
Written by Vaughn
Updated over a week ago

*********NOTE* - Due to changes in labeling, all references to Bills have been changed to Invoices, and all references to Billings have been changed to Time Entries in the Guide below. At some point, the Video above may also be updated. *************

Introduction

The Apply Retainer function, previously known as the Auto Retainer Pull, is very straightforward as far as making it happen, but there’s a lot going on under the hood. In this Guide, we’ll go through the process for executing these Allocations, as well as what’s happening behind the scenes with each step.

A couple of things to note. Apply Retainer is similar, but NOT the same as the Auto Allocation function, found here (although Apply Retainer DOES use the same prioritization rules as the Auto Allocation uses). Be sure to know the difference, as you may end up paying an Invoice that you didn’t mean to pay with funds that you didn’t want to use.

Let’s get started!

A New Update

Not shown in the video above but definitely something that you should know is that you can now Apply Retainers to Invoices that have not yet been Sent or Marked as Sent! This means that, as you Generate your Invoices, even though the Balance of the Matter has not yet been updated to reflect the new Invoice, the Invoice itself will still be eligible for Retainer Application.

Once this is done, the Invoice PDF, when Generated, will reflect the Retainer and Credits already Applied to the Invoice *before* the Client ever receives it!

The Apply Retainer Button

First, let’s talk about what Invoices qualify for the Apply Retainer function to be available. The Invoices must a) still have an outstanding Balance, and b) but be associated to a Matter with either an available Retainer Balance or available Credits. Those values may be located in a different place for each of your Environments, but generally, they’ll look like this.

*NOTE* This can also be done from the Matters Entity, and we've added a new View that aggregates ONLY Matters that qualify for Retainer Payments. It can be found in your Views on the Matter List. See below!

Whether you search it by the View or simply select a Matter, if both of these conditions are met, then you’ll see the Apply Retainer button in the Grid after you select a Invoice/Invoices.

Or conversely, you’ll see it on the Invoice Record itself.

Next, a Popout Menu on the right side of your screen will ask you for a couple pieces of Data. You can connect these to an existing Bank Deposit or a Disbursement Batch by filling in the appropriate Fields with that info, but this info if optional.

If you would rather simply execute the Retainer Pull without these Fields filled, click Save and Close.

Regardless, pressing the Apply Retainer button will cause some magic to happen! Once the process completes, all available Credits and Retainers will have been applied to that Invoice and the Balance will update.

Apply All Retainers

Whether you're applying the Retainers on Invoices or Matters, you'll need to make a Selection in order to have the option to Apply your Retainers. This is to keep you from accidentally Apply Retainers on Matter or Invoices that you weren't expecting.

As shown in the image below, once you Select one or more Matters, you'll see the option to Apply Retainers appear in the top Ribbon. Click that to make it happen!

What Happened

It’s important to understand what happened in the system in case you needed to make changes later. For example, if you wanted to Reverse this Retainer Payment, what would you do? You’ll find no Retainer Payment Record to simply undo or delete. So what actually happened when we pressed Apply Retainer?

First, the system looks at the available Retainer Balance of a Matter and the available Credits, then adds them together and finds the difference between the result and the current Balance on the Matter. So if your combined Retainer and Credits is less than the current Matter Balance, it will use all of the Retainer and Credits. If the Retainer and Credits are greater than the Matter Balance, it will only use what is required to pay the balance. At this point, it will create a Disbursement from IOLTA to Operating for that value. Here’s an outline below:

Matter X has available Credits of $200

Matter X has a Retainer Balance of $2,500

Matter X has a current Balance of $4,300

The Credits and Retainer are combined into one value, $2,700, and are not enough to pay off the Matter’s Balance, $4,300.

The system will now create a Disbursement going from IOLTA to Operating in the amount of $2,700 and reduce the Retainer and Credits on the Matter by the amount of the Disbursement.

Now the system will create a Bank Deposit, Payment and Allocation in the amount of the Disbursed funds from above (so in our example, for $2,700) and allocate it to the Invoice based on the Rules that you set in your Auto Allocation Configurations. If you’re not familiar with Auto Allocations, please see this Guide here. Also note that your funds will be applied to the oldest Invoice in the list, in the event of multiple Invoices to which funds could be applied.

And that’s the last step! The Funds have been pulled from one account, deposited into another, applied to a Balance and, if you use Business Central, that information will have been Posted there, as well.

Reversing this Process

Reversing this process is relatively easy, as the only actionable item that you’ve created so far is the Payment itself. For a full Guide on Payments, including Reversing Payments, click here, but the short version is that you’ll need simply to find the Payment that was created during the Allocate to Invoice function and Reverse that one as well, using this button here.

That’s it! A lot of complicated things happening for what is, on the surface, a very simple action, but never take for granted the little monkeys that spin the wheels and grind the gears in order to make your Invoicing experience as smooth as possible. 😊

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