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and now we're going to learn how to make  invoices for earned income from attorney   services what happens at the end of each month  well income from legal fees goes up by the amount   of retainer that was prepaid and earned during  the month but if income from legal fees goes up   by that same amount unearned retainer fee should  go down because now you have less money unearned   because you actually earned it during the month  what happens to the clients balance well in this   case the clients balance will go down because if  you actually earned some of the money that the   client prepaid for then you owe the client less  money in future services for example January 31   let's create invoice number 1 for our client Allen  RB for the fees Ross earned during January we know   that that's a thousand dollars a month because  in the previous video he preap he prepaid six   thousand dollars in retainer fees for six future  months now one of those months has gone by which   means Ross has earned $1,000 so this is how you  record the invoice you click invoice from the   icon bar choose Ross ask you to choose Allen R be  the client the date is the end of the first month   which in this case is January 31 of 2017 now the  only item that you have to put on this invoice is   the fees earned item that you actually setup in  the first video and you have to put a thousand   dollars because you can see this invoices for the  end of January which means during January Ross   earned $1,000 now when we click Save and close  and click don't worry about this message just   click yes and a cake cancel we'll talk about that  pop up in the next video but right now let's take   a look at the trial balance you can see unearned  fees has decreased by a thousand and income from   legal fees has shown up in the trial balance for  the first time as a thousand dollars you may also   notice that in the client balance detail Allen  was owed six thousand dollars in future service   on January 1 but then on January 31 Ross declared  that he actually earned the income of a thousand   dollars which was one sixth of the payment and  that means as of January 31 Ross owes to Allen   only five thousand because a thousand was earned  during January now what about our other retainer   client Betty Boop January 31 we also declare  that we earned Betty's January retainer the same   way and we remember from the previous video that  Betty paid us seventy two hundred dollars for six   months in advance which means during January Ross  earned one thousand two hundred from Betty and he   will acknowledge that by making an invoice again  we click invoice from the icon bar this time the   client is Betty and the date is already set for  January 31 of 2017 again the only item you have   to put on the invoice as fees earned but in this  case it's twelve hundred dollars that Ross earned   from Betty during the month I also should mention  at the bottom of the window that you cannot see   there's another memo field where you can describe  every last detail of this invoice and how it   relates to everything else when we click Save and  close we can take a look at the trial balance and   now you can see actual earned income from legal  fees has increased to two thousand two hundred and   unearned retainer fees has decreased to thirteen  thousand four hundred if you ever wonder why the   balance is the number that it's showing any  time you see a total amount in a report you   can always double click and get the detail so here  we can double click the total of income from legal   fees earned and see it's because of these two  invoices that were recorded on January 31 you   can also double click the thirteen thousand four  hundred dollars of unearned retainer fees to see   why that is the result when you double click you  get a detail of every single transaction that has   led you up to the balance of thirteen thousand  four hundred notice the first three payments that   went into unearned retainer fees increase the  balance and then notice the two invoices that   we recorded when we actually returned it when we  actually earned it decrease the balance and this   is the explanation and of course just like in the  previous example when you open the client balance   detail you can see that we now Oh Betty only six  thousand dollars in future service because we   earned twelve hundred dollars during the month so  this customer balance detail which is also called   the client balance detail shows you every event  that changes the balance and it shows you the   running balance which means the balance of what's  owed to the client at any given moment in time   you may remember from the previous video that our  arrangement with candy is a little bit different   On February 2 Ross performed one of two prepaid  services for candy Charles worth $1,200 make   invoice number three and send her a paid invoice  well that's basically the exact same thing Ross   earned some of what was prepaid but in this case  the invoice date will instead be February two and   of course QuickBooks automatically enumerates  the invoice and you could always highlight this   and change it to whatever invoice number you  would like it to be the customer in this case   the client is candy Charles and the only item  you ever have to put on an invoice if you do   not track your income for separate services and  the amount we earned in this case is 1200 now   at the moment we click Save and close of course  the trial balance shows and increase and earned   income and a decrease and unearned income and  of course the client balance detail shows that   we now owe candy less money as a result of  the service that we performed on February 2nd