- What are retainers?
- Setting up a retainer
- Managing retainer periods
- Things to keep in mind
What are retainers?
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 also making it easier to forecast resource utilization as 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-type projects in Scoro and manage each period as a mini-project, getting full visibility into every single billing period. You can 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.
Setting up a retainer
Step one: create a quote (optional)
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 comment section, custom fields, or the service description boxes on the quote to outline any additional terms and conditions.
You can also fill out the Cost and provider info column for internal cost estimation using the average labor rate.
Once the client agrees to the terms, use the Use the data on quote… button to turn the same quote into a project.
Step two: set up a retainer
When creating a new project, switch to the Retainer mode. This will change the project modify view accordingly, so you can set up periods and period-based budgets.
The billing period section helps you define the total length of the contract.
- Billing period duration – set the duration of a single billing period. You can determine its span either in 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 easily add or delete billing periods in the project view as well.
The total duration row shows you the exact span of the contract based on the data you’ve entered. The billing periods are counted from the project start date. 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.
The budget section lets you define the budget for a single billing period.
If you created the project from a quote, Scoro will fill in the budget fields based on the quote. If you don’t want to use the quoted values, you can override them by setting the budget manually instead.
If you create the project from scratch, you have to set the budget manually. You can track either time or money or both simultaneously. If you don’t want to track both, simply leave the irrelevant field empty.
- 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. It serves two purposes:
1) Shows you the sum to be invoiced each period.
2) Sets the target – defining the 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.
You can also define the cost budget for each retainer period by enabling the Add estimated costs toggle. This way, you can also track your actual internal and external costs against the estimates to see if you manage to stick to the expected profit margins.
In the pricing section, you can decide which selling prices to use to calculate the monetary budget burn in real time as the project progresses.
If you created the project from the quote, this section is already prefilled based on the data on the quote.
- Role prices – logged hours are multiplied by the selling price set for the user role that the team member who performed the work is assigned to. Opt for role prices if your hourly selling price depends on who delivers the work.
- For example: a Senior Copywriter logs 10 hours or 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 selling price of the service 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. Meaning it 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 can already recognize. Meaning it helps you track how much the client owes you for the work you’ve already completed.
We’ll dive deeper into those metrics and where you can monitor them as the project progresses in the Tracking budget burn section.
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. Everything you see in the project view relates to that filtered period – the metrics on the summary bar, the activity list, the linked financial documents. This helps to eliminate unnecessary noise so you can focus fully on what’s currently at hand. 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. You can read more about the project view from here.
You can easily navigate between the periods with the arrows or click the All periods button to get a full overview of the whole retainer agreement.
You can access a list view of all the periods from the View periods button in the right-hand corner. Clicking on the period name will open it in the detailed view.
You can plan out the activities by creating a list of new tasks at the start of each period. If you provide similar services each month, consider setting up task bundles to save yourself time and streamline task creation.
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.
Tracking budget burn
The summary bar at the top of the project view gives you an instant overview of how much time and money you have already used up for the filtered period. The exact trackers you see depend on whether you’ve filled out only the Hours per period (your time budget) or the Budget per period (your monetary budget), or both. All the calculations take into account only time entries that are marked as done.
Time budget trackers:
- Used hours – indicates how many hours you have already serviced the client during this period.
- Used hours (%) – indicates what percentage of the budgeted hours you have already used for the filtered period. Completed hours are divided by the budgeted hours.
- Remaining hours – shows you how many hours there are left to use for the filtered period. Completed hours are subtracted from the total hours budgeted for the period. A negative value indicates you’ve exceeded your time budget.
Monetary budget trackers:
- Used budget – indicates how much work you have already delivered to the client money-wise in the filtered period. Completed hours are multiplied by the selling price. If you’ve enabled the 'Deduct bills and expenses' toggle, then any bills and expenses linked to the period are also included in the calculations.
- Used budget (%) – indicates what percentage of the monetary budget you have already depleted for the filtered period. Completed hours are multiplied by the selling price and then divided by the period budget. If you’ve enabled the Deduct bills and expenses toggle, then any bills and expenses linked to the period are also included in the calculations.
- Remaining budget – shows you how much money the client still has left to use for the filtered period. The used budget is subtracted from the total period budget. A negative value indicates you’ve already delivered more than the client has paid for.
- Recognizable revenue – if you have not set a monetary budget, Scoro will not track budget burn on the summary bar. Instead, it tracks how much revenue you could already recognize based on the work you’ve done. Completed hours are multiplied by the selling price. If you’ve enabled the 'Deduct bills and expenses' toggle, then any bills and expenses linked to the period are also included in the recognizable revenue calculation.
- Remaining days – shows you how many work days are left in the filtered period. Compare it with the used hours and the used budget to evaluate progress. Note! If your site also includes weekends in the workweek, the remaining days counter will take weekend days into account as well.
- Overdue tasks – shows you how many tasks are overdue in the filtered period as of today, so you can take action to ensure these get completed and won't cause delays.
Modifying 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/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.
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 the invoicing process 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, scroll to the Past activities section 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 Use data on quote to… 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.
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 Budget section 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.
Things to keep in mind
Working with multiple entities
Retainers cannot be shared between entities. If you want to convert a one-off project into a retainer, you have to untick the Shared between entities box first.
Working with several quotes
If you link multiple confirmed quotes with the same retainer, Scoro will add up the hours and the sums on the quotes to come up with the budget.
For example: you’ve quoted 10 hours and 1000 EUR on Quote no.1 and 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 quote after some billing periods have already passed, Scoro will recalculate the budget only for the current and future periods. Passed periods remain untouched.
- If you’ve already updated the budget of a specific billing period manually, 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.
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.
NB! If the start date of the current period or the project is in the past, the days will be counted from today.
The project summary bar and the Budget section show the monetary metrics in the Display currency that the user has set in their profile. Each user can change it under Settings > My setting > Preferences.
If you’re using time-billing, then only completed billable hours are taken into account in all the budget-realted calculations.