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When it comes to retainer management software, understanding its features and aligning them with your goals is crucial.
Many platforms are available, but which ones match your process from start (client contracts and quotes) to finish (invoicing and payment collection)?
In this article, we’ll examine the key aspects of retainers and connect them to the features in retainer management software that will help streamline your team’s workflow.
If you’re new to the business world of working with retainers, you’re likely on the fence regarding whether or not this financial system is right for you.
It’s true that not every work situation needs a retainer.
Retainers are structured agreements where the client and business agree on a payment contract in return for a set of services. Most retainer invoices are advance payments, with any additional services performed outside the retainer’s scope billed later as ad hoc work.
Let’s look at how invoicing can be structured alongside a retainer to help you decide if it might be a beneficial move in your billing processes.
Since it’s your business, you can determine the structure of invoicing that’s right for your needs. If you’re thinking about using a retainer, you’ll have to choose between fixed-price (pre-paid) and on-demand (post-paid) options.
When doing so, it's crucial to understand their distinctions and consider both your client’s needs as well as what’s best for your business.
Pre-paid retainers are exactly what they sound like. Clients define the work they need done, and businesses assign a set fee to do it by a specific date. This work-fee ratio can be measured by deliverables or hours, making it the best way to handle projects where the tasks are easily defined.
With a fixed-price retainer, the client knows how to budget for the upcoming month, and the providing business has predictable income. The downside of this type of billing is that unused hours don’t overflow into the next month, and the initial agreement doesn’t account for scope creep.
Learn More: What Is Scope Creep — And How To Keep It From Extending Your Projects
Concerned about scope creep? Clients eagle-eyeing your line items?
On-demand retainers step in where fixed-prices don’t work.
With these post-paid invoices, clients pay a recurring fee to “hold a spot” with your company. When they need your expertise, you make yourself and your business’s resources available. Tasks are itemized, and services are rendered; then payment occurs.
On-demand retainers work well in industries where occasional needs happen and expertise is necessary. Legal services, consulting, accounting, and web development businesses often choose this type of retainer.
Clients are willing to pay a small monthly fee to ensure they receive support and services when they need them most, and the provider benefits from a consistent client pool and steady (although smaller) income.
Retainer fees are usually seen in various service-based industries, such as legal and accounting firms, IT support, and marketing agencies. To decide if retainers are right for your company, review the retainer types commonly used in your industry.
Consider these questions while you do your research:
If all of those answers seem to point to using a retainer system, the next step is to find a retainer management program.
Businesses that handle retainers require a special type of professional services automation (PSA) software to manage retainers effectively. Handling retainers adds a new level of administrative and financial burden, and not all PSAs are set up to handle these tasks.
Retainer management systems (RMSs), on the other hand, are specifically created to manage client retainers by streamlining the work involved. The right system can improve team efficiency by:
While various software programs do this, each differs in factors like customization, personalization, and level of detail offered.
Regardless of the platform you choose, your RMS should systematize how your team handles recurring payments, monitors services and progress on tasks, and tracks cash flow.
The goal is to reduce the overall burden of administrative tasks so that you and your team can focus more on client relationships.
While all RMS platforms are forms of professional service automation software (PSA), not all PSA programs work well for retainer-based businesses. The general PSA is designed to handle billing, but certain features are essential for repetitive invoicing and recurring payments.
As you look for an RMS that fits your business’s unique needs, watch for these non-negotiable features.
Spending crucial time switching from one tool to another is obsolete with the right RMS. Instead, everything you need to complete a client’s onboarding and invoice payment is included.
Specifically, look for systems that handle:
Some retainer management systems offer integration features that make it easy to connect your accounting software and other essential programs to your invoicing and credit card payment tools.
Keep Reading: Tool Consolidation Guide for Professional Service Firms
Keeping everyone happy is the key to a strong internal team and a great client retention rate.
Your sales-delivery handoff is the first connection between the sales and delivery teams. Everything must be seamless, and the project management tool you use helps make this transition happen.
How your RMS facilitates handoffs determines whether a positive client experience occurs. Clients who have to repeat information or reiterate their goals and needs can get frustrated and lose trust in your business. This results in customer churn, a hit to the business that causes a disconnect throughout the company.
When the whole team is in alignment, communication and collaboration make the transition to delivery smooth and unified. No misinterpretations happen, everyone knows what the client expects, and the confidence between the team and client is strong.
Do you know the progress of your team’s workload at any given time?
Resource planning is integral, especially with on-demand invoicing. If a client requests emergency work, do you have the capacity to handle it?
Your automated retainer management system should give you instant visibility into workflows, capacity planning, and real-time communication with your team and clients, including (but not limited to):
Through dashboard visibility, your business and the client can see and understand where the financial pieces of a project connect to the tasks and deliverables.
Just how profitable is each client? That’s a question to ask your software.
Retainer management software should include a report feature that gives insights into each client, where your budget is going, forecast issues and trends, and whether the work is delayed or early. Analyzing these reports lets you know whether to keep a client on retainer or if it’s time to “break up” with them.
Automation of recurring tasks is not just a time-saver; it’s an efficient use of resources and a boost to your bottom line.
Your automated retainer management system should be able to support everything from scheduling to task management, as well as invoicing your recurring clients’ monthly retainers.
Today’s artificial intelligence-filled world makes automation look different than what you might expect. Tasks that once seemed impossible to make repetitive are now easily automated.
The result? A removal of the old-school bottlenecks that required manual fixing, leading to enhanced speed and efficiency in your billing processes.
Automation also reduces human error for more accurate results. Since you create the standardized steps your RMS is to follow, the system adheres to your rules, and the output is always consistent.
The cost savings of this feature are visible in its reduced errors, meaning fewer mistakes to fix and better utilization of your resources. Employees who can engage in challenging and rewarding work, rather than repetitive tasks, tend to be more satisfied with their jobs.
Wondering where all those hours of work are going and which are billable?
Your system should tell you this, making it easy to track time through smart timesheets and integrated timers that help prevent double work and untracked/unassigned time, and ensure deliverables are met.
Time tracking is a necessary part of resource management in any successful business. It’s also a step that saves money: when you accurately track time, you make informed decisions about what works and what doesn’t.
Look for features in an RMS that increase the accuracy of time on task to reduce overpayments and administrative work. The more detailed the time tracking is, the better you’ll see where projects are over- or under-budget to plan future estimations.
Report features can help you identify underutilized resources, peak sales and productivity periods, and where teams may need to manage their time more efficiently.
Anything new has a learning curve, especially when it’s complex, like automated retainer management. Training features are a must-have to ensure you’re maximizing your investment.
High-quality, relevant training reduces frustration during a program transition. When your team feels less intimidated by the new software, they’re more open to learning it quickly. This mindset shift increases productivity and reduces time to become competent with the system. As a bonus, employees who feel well-trained are more confident in their skills, which boosts engagement, loyalty, and retention.
This feature also helps you with onboarding. Pre-created training (tweaked for your industry) gives new employees the specific information they need to do the job they were hired for without requiring another team member to share this knowledge.
This piece of onboarding saves your seasoned employees from repetitive work, giving them more time and energy to focus on more important ways to guide their new teammate into the workplace culture and position.
From integrating your other project management needs to insights on profitability, automated retainer management systems juggle all the team members and client work tasks that require time and repetition.
Streamline your retainer agreements with Accelo’s all-in-one platform that upgrades your CRM into something that eliminates repetitive work, letting you focus on what really pays the bills: handling your clients’ needs.
