Retainers are a core part of many agencies' workflows. This article will explain how to set up and manage a "robust" retainer in Function Point.
Robust retainers involve:
- Billing a client a set amount each month
- Predetermined and recurring services
- The option to provide additional deliverables upon request
Following the steps outlined in this article will allow you to streamline the billing process, keep track of progress on retainer services, manage ad hod deliverables, and monitor profitability.
Setting up a robust retainer involves creating Projects, Estimates and Jobs. If you aren't familiar with those processes, please review the following articles before continuing:
Step 1: Create a Project
From the "Add Project" page, fill in the relevant information. A key element when creating a Project for a retainer is the budget. This amount should be the total value of the retainer. This sample retainer is an annual contract, with a budget for the year of $120,000.
Step 2: Create a Monthly Billing Job
The monthly billing job will include a single Service Group and Service that will appear on your Invoices. It is common to have a Service in FP called "Retainer Services" for this purpose. The estimated hours and value will be what you will bill each month. In this case, since the annual budget is $120,000, the monthly amount to be billed is $10,000.
You can also include the predetermined services that you will perform over the duration of the retainer on this Job, with no estimated hours. Alternatively, continue to Step 3 and create a separate job to keep track of monthly services.
Step 3: Create a Monthly Services Job
This Job will include all the Services that you've agreed to provide on a monthly basis, with no estimated hours or value. This is because the billing Job already shows the hours and value per month. To manage the hours of this Job, we recommend using a Schedule and estimating hours for specific tasks. To learn how to do this, check out this article: Creating a Schedule from the Estimate or Job
Step 4: Create Jobs for Ad Hoc Deliverables
As your client requests additional deliverables, create new Jobs under the same Project. As with the monthly services Job, remember not to set hours or value for the Services of these Jobs. Use Schedules to manage time instead.
Each month, create an Invoice for the Monthly Billing Job, using the estimated amount. To do so, follow the steps in this article: Create an Invoice Using Estimated Values
You can also create an Invoice for the Monthly Billing Job as part of a batch Invoice. If you are unfamiliar with batch invoicing, check out this article: Creating a Batch of Invoices
To keep track of the overall performance of your retainer, navigate to the Job Financials tab of the Project. You'll be able to see Actual values for each Job, as well as the totals for the entire retainer. The information by default will be for all time. To monitor progress for a specific month, we recommend using the date filters.
Here's how to interpret the Totals row:
Est. Qty: Number of hours estimated per month. Will not change with date filters.
Estimate: Amount you charge your client each month. Will not change with date filters.
Act Qty: Number of hours logged on Jobs related to this retainer during the specified dates.
Cost: The internal cost to your agency of the hours logged on Jobs related to this retainer during the specified dates.
Actual: The value of the total hours logged during the specified dates.
Variance: The difference between the Estimate and Actual values for the specified dates. A positive amount means the Estimate is higher than Actuals. A negative amount (in parentheses) indicates that the Actuals exceed the Estimate.
Invoice: Total amount invoiced during the specified dates.
+/-: The different between the Actual value and the Invoiced amount for the specified date. A positive value means that the Invoiced amount is higher than the Actuals. A negative amount (in parentheses) indicates that the Actuals exceed the Invoiced amount.
We hope this article was helpful! For more step-by-step articles, videos, and webinars, check out the rest of our Help Centre. You can also contact us at firstname.lastname@example.org with any questions, concerns, or comments. We're happy to help.