Managing retainer agreements

A retainer is an agreement between a company and its client wherein the client pays a fixed fee on a regular basis, typically monthly, in exchange for a range of services.

Retainer agreements create a predictable revenue stream for the company while making forecasting resource utilization easier. The company will know exactly how much time and talent they need to book exclusively for that client for the agreed period. In turn, the client can be sure that the company will have the capacity to service them as needed. 

You can conveniently run retainer projects in Scoro and manage each period as a mini-project, getting complete visibility into every billing period. Track and adjust monthly budgets on the go, roll over hours where needed, schedule automated invoices, and streamline the payment process with online payment options.

This article will guide you through everything you need to know about managing retainer projects in Scoro.

1. Creating a retainer project

There are two ways you can create a retainer project in Scoro:

• From a quote – you can use a quote as the basis for your contract to establish the terms with the client, such as the monthly scope in hours or money.
  • The quoted amounts will serve as a budget for a single billing period.
  • If you don’t know yet which services will be needed, you can simply quote a fixed fee or a bucket of hours.
  • Use the quote's comment section, custom fields, or service description boxes to outline any additional terms and conditions.
    
  • Using the average labor rate, you can also fill out the Cost and provider info column for internal cost estimation.
  • Once the client agrees to the terms, use the Create project button to turn the same quote into a project.
    
• From scratch – from the project list, click the + New button to create a new project. Alternatively, you can use the Quick actions button on your site’s menu and choose New project.
  

Whichever approach you take, you will end up in the project modify view. Select the retainer type for your project and set up the project details in the Project settings and Budget settings tabs. Let’s walk through the details you can set in each tab!

1.1. Project settings

The Project settings tab is home to all general project settings and data.

If you’re creating your retainer project from scratch, you can also start by using a project template – simply select the necessary template from the Use project template dropdown field. Selecting a template overrides any previously entered details, so always start by choosing the template and then modify the details.

Project members and Customer Portal users can be added after the project is created. If you’ve created the project from the quote and the quote lines had specific team members assigned, they’ll be automatically added to the project. 

Enable the Members only toggle if the project should not be accessible to anyone outside of the project members. If you don’t tick that box, the project can be accessed by all users with the right to view other projects. This right can be granted or limited by the site administrator with the help of permission sets.

Define the total length of the contract by setting up the following:

• Billing period duration – set the duration of a single billing period. The duration of the billing period can be set to days, weeks, or months.
• No. of periods – enter the total number of billing periods that the retainer contract will cover.
  • For example, if you have an annual contract, you can set up 12 periods with a duration of 1 month. If the duration of the retainer agreement is not fixed, start by adding an approximate number of periods and then adjust the number as needed later. You can return to this view at any point to update the number of billing periods. You can also easily add or delete billing periods in the project view.

The billing periods are counted from the project start date. You can adjust the project start and end dates by selecting the correct dates in the calendar.

If you update the number of periods, Scoro will automatically recalculate the project due date accordingly after saving. Scoro will always keep the project due date in sync with billing periods until you overwrite it manually.

Select the Client you want to link the project to. You can click the Add a new contact option in the dropdown field to add a new client while creating your one-off project.

If your site has multiple entities and you want to share the project between them, expand the Entities section and enable the toggles for the entities you want to share the project with.

If project tags are used on your site, you can expand the Project tags section below the project start and due date pickers and tick the necessary tag(s) for your internal project.

Next, go to the Budget settings tab to fill out the budget details. 

1.2. Budget settings

The Budget settings tab lets you set the budget for your retainer project.

For retainer projects, you can choose between the following budget-setting methods:

• Setting the budget manually – if you’re creating the retainer project from scratch, you need to click the Set manually button and provide the following information:
  • Hours per period – set how many hours worth of work you will do for the client in each retainer period. This is your time budget. It lets you monitor logged hours against the time budget as the project progresses, so you can avoid overservicing and negotiate more hours with the client when needed.
  • Budget per period – this is the retainer fee, i.e., your monetary budget, that serves two purposes. Firstly, t shows you the sum to be invoiced each period. Secondly, it sets the target – defining budget lets you monitor budget burn internally as the project progresses. By tracking this, you can easily report to the client how much money they still have left to spend in the given period. It is especially relevant if you price different services with different rates or if you have external costs, which should burn the budget as well. If you are outsourcing some services and would like to deduct the external costs from the budget as well, enable the Deduct bills and expenses toggle.
    
• Using the quoted amounts – if you created the project from a quote, Scoro will fill in the budget details under the Use quoted amounts based on the quote and the billing periods you’ve selected. You can still choose to set the budget manually if you don’t want to use the quoted values.
  

Once you’ve set the budget, you can select which price list to use.

Then, you can select what selling prices to use to calculate the monetary budget burn in real-time as the project progresses:

• If you’re creating the project from a quote, this section is already pre-filled based on your quote data.
• If you’re creating a project from scratch, you need to select either of the following prices:
  • Role prices – logged hours are multiplied by the selling price set for the user role to which the team member who performed the work is assigned. Opt for role prices if your hourly selling price depends on who delivers the work.
    • For example: a Senior Copywriter logs 10 hours of work. The selling price of a Senior Copywriter is 120 EUR/hour. The resulting revenue/budget burn is 10 x 120 = 1200 EUR.
  • Service prices – the logged hours are multiplied by the service's selling price linked with the activity type. Opt for service prices if your hourly selling price depends on the service, not the person who delivers the work.
    • For example: a Senior Copywriter logs 10 hours of work. The selling price of the copywriting service is 100 EUR/hour. The resulting revenue/budget burn is 10 x 100 = 1000 EUR.

If you’ve set a monetary budget for your retainer, accumulated revenue will be deducted from your monetary budget to indicate budget burn. This helps you track how much work you still owe to the client for the money they’ve already paid.

If you have not set a monetary budget for your retainer, the revenue calculation method will help you monitor how much revenue you have already earned. This helps you track how much the client owes you for the work you’ve already completed.

Once you’ve set up all the budget details as needed, you can also set the quote as “Confirmed” by enabling the toggle above the Budget settings tab.

When ready, click the Create project button to finish creating your new retainer project. You can then add project members, plan out the retainer activities, and more. 

2. Managing retainer periods

After you’ve saved your project, you can start running each billing period as a mini-project in Scoro. The default view always shows you the current period.

Only the project progress bar in the top right corner and the Gantt chart track the progress of the entire retainer, not a specific period. Everything else in the project view relates to the filtered period, eliminating unnecessary noise and allowing you to focus on what’s currently at hand.

You can read more about the project view.

To navigate between the periods, click on the past or future months. Click the All periods button to see an overview of the retainer agreement.

To access a list view of all the periods, click the View periods button in the top-right corner. You can click on the period name to see its details.

2.1.  Planning activities

You can plan out the activities for a retainer project in three ways:

• By creating tasks from the quote
• By using a task bundle
• By adding tasks one by one

Option 1 - creating tasks from the quote

1. Click the Create tasks from quote button
2. Select the team members responsible for the tasks, remove the quoted services you don’t want to create a task for by clicking the X button, and adjust the task duration and other details as needed.
3. Keep the Create tasks for upcoming periods toggle enabled to add the selected quote items as tasks for all upcoming billing periods, or disable it to add them only to the selected period. 
   
   When enabled, the created task start and end dates will correspond to the start and end dates of each billing period. The billing period name will be added to the task titles automatically.

Option 2 - using a task bundle (useful if you provide similar services each month)

1. Set up your task bundle first (if not done already).
2. Add the task bundle to your billing period by clicking the three-dot icon, selecting Use a task bundle, and choosing your bundle.

Option 3 - adding tasks one by one

Click the New task button to add a new task.

You don’t need to link tasks with periods manually - Scoro will automatically show the task under the correct period based on the task start and end date. The task is displayed under every period that overlaps with the task time frame.

If you do not set start and end dates, the task is displayed under each billing period. Phases are also linked with billing periods based on their start and end dates.

Make use of the Gantt chart to plan and schedule tasks for each period. By default, the Gantt chart shows period markers, so it’s visually easier to grasp where one billing period ends and another one begins. If you do not wish to see these markers, you can untick the Billing periods box from the View options.

2.2. Tracking budget burn

The summary bar at the top of the project view provides an instant overview of how much time and money you have already used for the filtered period.

Read more about the summary bar for retainer projects.

2.3. Modifying billing periods and rolling over the budget

You can modify billing periods by clicking the View periods button on the right-hand side and opening the Modify view.

In this view, you can easily add and delete periods or give them custom names.

If you need to roll over any hours or increase or decrease the budget for a specific period, simply type in the new value.

Scoro will keep track of the changes and highlight the difference between the previously saved total and the new total, so it’s easy to detect how much you’re over or under after the changes. The metrics on the project summary bar will be recalculated accordingly.

2.4. Streamlining invoicing and payments

You can create an invoice for each billing period from scratch, but as you are likely to invoice the same fixed amount each month, you can consider automating the invoicing process. Below you can find a few suggestions on how to streamline the invoicing process for retainers.

Set up scheduled invoices

You can reduce manual work and automate invoicing by setting up scheduled invoices for retainers. Note that scheduled invoices are included only in the highest subscription plan but can be purchased as a separate add-on as well.

Head to Invoices > Scheduled invoices. Create a new invoice, link it with the relevant retainer project, and set the issue interval accordingly.

For example, if your billing period duration is one month, set the issue interval to Every month. Scoro will generate the invoice automatically each month. You can then review it and send it out.

Alternatively, you can have the invoice sent out automatically each month by ticking the respective box. If you agree to any extra work, you can invoice that separately on an as-needed basis.

Use easy time-billing

If you’re invoicing your client based on the actual work done, you can use the Scoro time-billing function for easier invoicing.

Open the period you wish to invoice, navigate to the Time tab, and tick all the activities you want to invoice.

Click the Create invoice button to transfer the selected activities to the invoice with a single click. This helps you ensure you don’t leave any activities unbilled, as Scoro keeps track of what’s not yet invoiced.

Create invoices from the quote

If you created your retainer project from a quote, you can use the same quote as the basis for your invoice each month.

Open the quote and use the Create invoice button to turn the quote into an invoice.

Leverage instant payment options

If you want to encourage instant payments to collect the money faster, integrate Scoro with Stripe and add a Pay now button to your invoices.

This allows your clients to pay the invoice immediately via a link. As soon as the client makes the payment, it’s marked as paid in Scoro, so you always have a real-time overview of your cash flow.

2.5. Tracking profitability

The Profit tracker in the Budget section helps you track the actual numbers against the budgeted ones and monitor profit as the retainer progresses. It shows you data about the currently filtered period. If you want to see the totals for the whole retainer, filter out All periods.

The exact columns in the Profit tracker depend on how you’ve set up your retainer. You need to have the monetary budget defined to see the Budgeted/Quoted column. 

Invoices are linked with billing periods based on the issue date. Bills and expenses fall into periods based on the recognition date. If you don’t have the recognition date field enabled for your site, Scoro uses the issue date to decide which period the cost document belongs to.

The Profit line indicates how much money you will have left over once you deduct bills, expenses and internal labor costs from the invoiced total. You can track and compare this number across periods to detect what affects your profit margins – overserviced hours, more expensive resources, higher outsourced costs, etc.

3. Frequently asked questions

Can retainers be shared between entities?

Yes, you can share a retainer project between multiple entities. When modifying your project, tick the Shared between entities checkbox and select the entities you want to share it with.

Can I link multiple projects to a single monthly retainer agreement?

No, there can only be a single project linked to a retainer agreement (quote). It is not possible to link multiple retainer projects to a single quote. 

Can I convert a one-off project shared between multiple entities into a retainer?

Once a project is created, you can no longer change its type. If you need to turn a one-off project into a retainer, you will need to create a new retainer project accordingly and move the tasks from the one-off project to your new retainer project.

How is the retainer budget set when working with several quotes?

If you link multiple confirmed quotes with the same retainer, Scoro will add up the hours and sums on the quotes to create the budget.

Here's an example:

• Let's say you have the following two quotes:
  • 10 hours and 1000 EUR on Quote no. 1
  • 20 hours and 3000 EUR on Quote no 2
• Scoro will calculate the budget as follows:
  10+20 = 30 hours per period and 1000 + 3000 = 4000 EUR per period.

If you modify your original quote or add another one after some billing periods have passed, Scoro will recalculate the budget only for current and future periods. Passed periods remain untouched.

If you’ve already manually updated the budget of a specific billing period, these manual updates will not be overwritten by the changes you make to linked quote(s). Scoro will update only the fields that still use the default quoted values.

How are tasks distributed across the billing periods when using task bundles?

If you add a task bundle in a single-period view, the days for the tasks are counted from the beginning of that period to ensure easier task management. If you add a task bundle while all periods are filtered out, the days for the added tasks are counted from the project start date. 

If the start date of the current period or the project is in the past, the days will be counted from today.

What hours are considered when using time-billing?

If you’re using time-billing, only completed billable hours are considered in all the budget-related calculations.