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You are here: Home / Archives for client retainers

January 4, 2017 by Eric Butts 2 Comments

How to Account for Client Retainers and the Mistake Many Small Businesses Make

how to account for retainers

If you’re starting a service business, you may have concluded that it makes sense for you to charge a retainer up-front. When dealing with small business or individuals, charging a retainer can help you make sure you don’t get stuck with invoices you have trouble getting paid. Maybe your clients ran out of cash unexpectedly or maybe they decided the agreed upon work wasn’t actually what they wanted and refused to pay. In any case, work you perform has a cost associated with it so covering yourself to prevent losing money on deals is a top priority. If you can’t collect more cash than you spend, your business will face certain death, no matter how popular your offering. [Read more…]

Filed Under: Accounting Tagged With: accrual basis, cash basis, client retainers

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