When I issue a Retainer Invoice to a customer, it is an amount I expect to be paid and when not yet paid it is therefore a Receivable. Zoho Invoice does not treat Retainer Invoices as a Receivable and does not include them within Receivables on the Dashboard. This behaviour is fundamentally wrong.

When chatting with support, the explained the systems behaviour as to why they do not treat a Retainer Invoice as a Receivable because if I issue an Invoice and then use the Retainer balance to pay this Invoice, then I would be duplicate recognising the Receivable. Again, this is fundamentally wrong, and a lack of understanding of account principle.

For example, if I issue a $1000 Retainer Invoice to a client then it is an amount to be paid and a Receivable. If it is unpaid, then Receivables has $1000 owing.  If I issue an Invoice for $500 (same or different client), then Total Receivables is $1500.  But my Receivables is only showing $500 because the Retainer Invoice is ignored and not shown/treated as a Receivable.  If you show/explain this to any accountant or bookkeeper, they will tell you it is absolutely wrong, and your business has Total Receivables unpaid of $1500.

Let's presume in the above example that the $1000 Retainer and $500 Invoice is for the same customer, and both are unpaid.  If I have issued these two, then I am expecting $1,500 payment and my Total Receivables must be shown as $1500.  If the client then pays the $1000 Retainer, then my Total Receivables is $500, as the Invoice is still issued/sent and is unpaid. If I then use the Retainer balance to pay the Invoice, my Total Receivables is $0.  At no point in this sequence is this a duplicate of Receivables.

There is no scenario where I would have both a Retainer Invoice and an Invoice sent/issued to the same client, both of them unpaid, and not expect that my Total Receivables would reflect the sum of both the Invoice and the Retainer Invoice. And in the scenario where Invoice(s) and Retainer Invoice(s) are sent/issued to different clients, then the Total Receivables amount shown is incorrect because it does not include Retainer Invoice amounts unpaid.

Thoughts from others using Retainer Invoices? Why is an unpaid Retainer Invoice sent/issued not considered a Receivable for your business?