Many service businesses have felt the struggle between feast and famine at one point or another. One month your team may be teetering on burnout, and the next month you could be struggling to find enough work to keep your business afloat. This constant back and forth can be hard to sustain, can distract you from your larger business goals and may leave you feeling stuck in a rut.
For client-based businesses wanting to avoid this common problem, retainers are an excellent solution for creating reliable revenue and building stronger, longer-lasting client relationships. Having a steady income can bring much-needed consistency to your business processes and allow your team to focus on bigger goals and give you the time and energy needed to grow your business.
While retainer-based services can bring benefits to both your business and your clients, recurring invoices can add additional, complex tasks for your team to manage. But by understanding retainers and how to efficiently bill for them, you can unlock the power of recurring client work for your professional services business.
Let’s break down the most critical information to get you started. We’ll cover:
A retainer is a payment agreement between your business and a client. In this contract, you and your client agree on a predetermined amount of hours worked or specific tasks to complete in a defined period of time, and in exchange, the client agrees to a set, recurring fee for those services.
The length of the retainer agreement can vary greatly from client to client, but retainer invoices are usually paid on a monthly basis with the assumption that your business will complete and deliver the agreed-on work within that same time period.
For example, you are a digital agency that has a client that needs regular SEO maintenance. Your team needs 10 hours a week to complete this recurring task, so you may consider putting them on retainer for 10 hours per week. Then, at the beginning of every month, you would then charge your client for 40 hours of work with the assumption to effectively reserve that billable time for the upcoming month.
Just like any other invoice your business creates, a retainer invoice should contain all the necessary information to describe the work complete, the money owed and any payment terms your business requires. This information should include, but is not limited to, the following:
A retainer invoice will be similar to any other standard invoice you send to clients for services rendered, the main difference is that a retainer invoice will need to be sent on a recurring basis. Thankfully, there are platforms and software that can make the process much easier for you and your team.
Automated invoicing tools can be extremely beneficial, especially for small to medium-sized businesses. By automating the retainer invoicing process, you can set up recurring invoices to send to your clients without any extra effort from your team — giving you the value of recurring revenue without any additional administrative work.
While many businesses manually manage their retainers and retainer invoices every month, there is a better way! With the assistance of digital tools and templates, your business can maintain complex contracts with minimal effort from your employees.
While some teams may be satisfied with retainer management software alone, the only complete solution for client-based businesses is a client work management system that connects your client contracts to the other functions of your business: projects, tickets, billing and more.
An end-to-end client work management platform like Accelo goes beyond managing your recurring work with custom invoice templates and alerts about retainer status. Because it connects your entire client journey in one centralized tool, it can track your team’s billable time with built-in time tracking — leading to more accurate invoices with less effort.
Running a business takes a lot of time and energy and, without the right tools in place, a lot of that time and energy is probably used for non-billable work. And while retainers are a great way to generate reliable income for your business, generating monthly retainer invoices can be a recurring hassle without the proper support.
But now there is a better way to get it done. Automated retainer invoices available with Accelo can help you regulate and increase your revenue flow. And the less time you spend creating and sending invoices, the more time you will have to dedicate to your clients and their projects.
Explore how automated retainer invoicing can transform your service business. Request a demo today.