Retainer and prepayment drawdowns

When a customer pays a retainer (or any prepayment) and you later invoice them for the full amount, part of the invoice is settled by applying the retainer rather than collecting new cash. This page explains how to record that in Financica.

Prerequisites

Before applying a retainer drawdown, you need:

1. A liability account for retainers. Create a "Customer Retainers" account with type Liability in your chart of accounts. This is where prepayments live until they are earned.
2. The retainer transaction categorized. The bank transaction where the retainer arrived should have its category leg assigned to the Customer Retainers liability account (not income).
3. The invoice posted. The invoice must be finalized so Financica has created the journal entry with the Accounts Receivable and income legs.

Adding the drawdown legs

Open the invoice's posted transaction (linked from the invoice detail page under "journal entry"). In the Account categorization section, add two new legs:

Account	Amount	Effect
Customer Retainers	Positive (e.g. 1500.00)	Debits the liability -- reduces the retainer balance
Accounts Receivable	Negative (e.g. -1500.00)	Credits AR -- reduces the amount owed on the invoice

These two legs must be equal and opposite so the transaction stays balanced.

Why these signs?

• A positive amount on a liability account is a debit, which decreases the liability. This reflects the retainer being consumed.
• A negative amount on Accounts Receivable is a credit, which decreases the receivable. This reflects part of the invoice being settled without cash.

Linking to the invoice

After saving the drawdown legs, you need to link the AR credit leg to the invoice as a payment so the invoice's payment tracker reflects the applied amount.

1. On the invoice detail page, click Search transactions in the payments section.
2. Find the invoice's own posted transaction (it will appear because it now has an AR leg matching the retainer amount).
3. Link the Accounts Receivable leg (the negative/credit one). The system validates that the leg direction is correct for a payment -- it expects a credit to AR.

The invoice will update its paid amount to include both the retainer application and any linked bank payment.

Which leg to link

The invoice payment system expects a leg that reduces Accounts Receivable (a credit/negative amount). This is the AR leg, not the Customer Retainers leg.

• AR credit leg = "this much of the receivable was settled" -- this is what the invoice tracks as a payment.
• Customer Retainers debit leg = "this much of the liability was consumed" -- this is the funding source, not the payment application.

Example

A customer paid a €1,500 retainer, then you invoiced €2,000. The payment processor applied €1,500 from the customer balance and charged €500.

After invoice posting, the journal entry has:

Leg	Account	Amount
1	Accounts Receivable	+2,000
2	Income	-2,000

After adding drawdown legs:

Leg	Account	Amount
1	Accounts Receivable	+2,000
2	Income	-2,000
3	Customer Retainers	+1,500
4	Accounts Receivable	-1,500

Payment links on the invoice:

• Leg 4 (AR -1,500) linked as retainer application -- invoice shows €1,500 paid.
• Bank transaction (€500) linked as cash payment -- invoice shows €500 paid.
• Total: €2,000 paid. Invoice fully settled.

Notes

• The drawdown legs have source: null (user-added), not source: "invoice". They are editable and deletable, unlike the original invoice posting legs.
• If the retainer only partially covers the invoice, adjust the amounts accordingly. The same pattern works for any split between prepayment and cash.
• If you need to reverse a drawdown, delete the two legs you added and unlink the AR leg from the invoice.