What is a Monthly Retainer?
A monthly retainer is an agreed contract with your customer where your business charges a fixed monthly amount in return for certain services. At the end of each month, you may be required to list the work that was performed against the retainer and charge an additional amount for any overage or rollover of the remaining funds if the amount of the delivered service is less than the paid retainer amount.
Here is our suggested approach on how to manage this in Avaza.
Step 1: Create a project for the first month and set the Budget Method as Fixed Fees and set the amount equal to the monthly retainer amount. Set the Timesheet Billable Method for the project equal to Not Billable given the tracked time is not going to be added to the invoice.
Add all the required team members to the project and configure the cost rate for each member equal to the rate you will like to use for the consumption of the retainer to the customer.
Step 2: Add a task for each agreed deliverable so your team can track time against it and these details can be shared with the customer.
Step 3: Create the first retainer invoice and link the line items to the project created in step 1. Send the invoice for payment and once the payment is received the retainer is deemed active.
Step 4: Your team should track time and expenses on the retainer project while delivering services. You can configure the Expense Category Budget as well if you will like to track expenses against that budget.
Step 5. Use the Project Summary or Project Dashboard report to check how the retainer is performing. The report will provide the total cost tracked against the retainer and if there is any amount remaining or overage.
Step 6: For a given retainer create a project category that is associated with all the monthly projects for a specific retainer. This will allow you to run the Project Dashboard report by project category so all the projects for a specific retainer can be listed together.
Step 7: You can use the Timesheet Details or Task List report to share the services that were provided for a particular retainer to your customer and also add the overage charges to the next month's invoice or update the total budget amount for the next month to a higher amount if there is leftover amount.
If you would like to always invoice the same fixed amount to your customer regardless of over or under utilisation of the retainer then you can configure a recurring invoice to automate the invoicing process.
Here is an alternative suggestion on how to collect advance payments from your client.