Retainer Invoice Overview & Tips for Success

2-Sep 2021
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Kirsten McNeice MARKETING COMMUNICATIONS SPECIALIST

Successfully running a business of any size requires a great number of skills. This is not a problem in large corporations because they have the finances to pay individuals to focus on individual tasks. For those of you running small to medium-sized companies, this is a luxury you may not be able to afford. 

To solve this problem, many of these companies turn to freelancers to do work that’s vital to the success of the business but can be done in less than 40 hours per week. For more security for both the business and the freelancer, retainer invoices are often drawn up.

Similarly, if your small business offers services to other businesses, you may want to use retainer invoices for any products or services that you provide your clients on an ongoing or recurring basis.

What Is a Retainer?

‌A retainer is a payment agreement between the business and the service provider. In this contract, the business agrees to pay a predetermined amount and the service provider agrees to a certain number of hours worked or specific tasks to complete.

The length of the retainer itself is usually open-ended, but retainer invoices are usually paid on a monthly basis with the assumption that the service provider will complete the agreed-on work within that same period.

Take, for example, a digital agency. If your business needs regular SEO maintenance done, you may consider putting them on retainer for 10 hours per week. At the beginning of the month, your business would pay them for 40 hours of work with the assumption that they’ll be available to do at least that much work for you.

What Is a Retainer Invoice?

A retainer invoice is little more than a bill that is drawn up for services to be rendered. It is sent from the independent contractor to the business. It should contain all the necessary information for the business that receives it. This is so that the business knows exactly what they are paying for and to whom, and any other information necessary to pay the bill. The information should include: 

  • Contact information for the payee and payer — this should include name, address, email, and phone numbers
  • Contact information for the payee as well as the name, address, and contact numbers of the company — this should include the specific name of the person or department that will be handling the invoice
  • Invoice number - useful for keeping a paper trail and a must-have as your company scales 
  • Relevant dates — this should include the date of the invoice and the date payment is expected
  • In-depth details - Specific services to be provided or goods to be delivered
  • Amount owed — this should include any unpaid balances from past invoices and any taxes that may be applicable
  • Accepted forms of payment — if these include online payments, be sure to list specific apps that can be used, or if the invoice is delivered electronically, be sure to provide links to acceptable forms of payment.

Thankfully, there are platforms and software that can make all of this much easier on you.

Automated invoicing is helpful to many small business owners. This is the process by which you input all the information at once, and the system automatically sends out the retainer invoices to the appropriate people at the appropriate time.

This will enable you to focus on actually running your business instead of wasting time chasing down payments from different clients.

How Do You Create a Retainer Invoice?

While you could, of course, manually create a retainer invoice every month, that would waste your time and your business’s money. It’s so much easier to make use of the available software and templates to create your invoice once and let the platform carry it from there.

Of course, things change and you need to be able to easily make adjustments to your existing retainer invoices should the need arise.

Here are the steps for creating a retainer invoice using Accelo’s module:

  1. Click on Create Invoice 
  2. Choose a template
  3. Choose a title — this allows you to organize and quickly find information if you have multiple invoices
  4. Choose an owner — this is the person in your business responsible for this invoice.
  5. Choose who the bill is sent to — this can be a person within the billed company or the company itself, and you’ll be able to configure it so that an email can be sent directly to the appropriate person
  6. Choose the raised date — this is the date that the invoice will be processed and sent
  7. Choose the due date — this is the date that payment is expected
  8. Provide external notes — this space will be seen by the customer and can be used to add a description of services or goods the invoice covers
  9. Provide internal notes — this space will not be seen by the customer and can be used to set reminders for yourself or others in your company
  10. Input amounts due — this space is used to input the amount due for all provided goods or services and any applicable taxes

Once you have completed these steps, you can choose whether to make the invoice automatic or manual. Since most aspects of a retainer invoice will likely stay the same month to month, this automated invoicing may be a wise choice.

Here’s how to automate your invoice using Accelo’s module: 

  1. Open the retainer you choose to automate
  2. Click on edit
  3. Choose edit retainer from the dropbox
  4. Check the auto-renew periods option
  5. Choose the pre-paid billing option
  6. Now you may choose to have your invoice created automatically

Conclusion

Running a business takes a lot of time and energy. Most of this time and energy is used doing paperwork. Anything you can do to streamline the paperwork and free up time is an asset to your business. Retainers can be a great way to generate reliable income for your business, but generating monthly retainer invoices is a hassle.

Now, you see that there's a better way to get this done. Automated retainer invoices can help you regulate and increase your revenue flow. The less time you spend doing paperwork, the more time you will have to do the countless other things needed to keep your business running smoothly.

To learn more about how automated retainer invoicing can help you or to sign up for a free trial, visit Accelo.com today.‌

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