Apply "Funds" to AR

How do I send a client her first bill but have bill reflect the retainer deposited into "Funds" (what we lawyers call client trust account)?   I'm getting a chicken & egg problem.  If I create the bill first, it would show the client trust account balance but does not subject that amount from current charges.  Then I get a confused call from the client about how much they're supposed to pay. 

If I try to do an "Apply Funds to AR" transaction first, there is no bill to apply it to and BM tells me the payment is not allocated and refuses to continue the operation.  If I do an "Apply Funds to AR" after I create the 1st bill, then I have to generate a 2nd bill, which now reflects the applied "funds", but does not include the breakdown of charges in the 1st bill. 

To manually transfer funds at the time of billing, you will need to create a Withdrawal from the Fund Account and receive a Payment.

In the alternative, you can go into the Funds tab on the Billing Preferences and click the Automatically Apply Funds to New Charges checkbox to allow Billing Matters to create the Apply Funds to AR transaction for you at the time of billing.

As you noticed, the Apply Funds to AR transaction that you can create only applies to AR balances and not to WIP.