How to effectively manage your agency retainers using Synergist

 |  In: Product | Agency management | Project management

Retainers can bring a host of mutual benefits for both agencies and clients. Stability (a rare event in agency land), long-term partnerships and ease of budgeting, for starters. They help to ensure a consistent revenue stream and a more predictable workload (another big plus).

But... it can be tricky to manage hours and report activity on retained work. And with many agencies offering discounted rates or bundled services, it’s critical to make sure you’re not overservicing on an already-reduced fee.

Here’s how Synergist can help you effectively manage your retained work, keeping your reporting accurate and up to date.

What is an agency retainer?

An agency retainer is a fixed monthly, quarterly or annual fee paid by a client to an agency to secure an agreed number of hours or services. The fee is typically paid upfront, often discounted, and can vary based on the scope of the work.

There are two common types of retainer:

Hard (fixed): a fixed fee which secures a specific amount of work or services, with additional work or services billed separately. If you don’t use up the agreed number of hours, you can apply a ‘use-it-or-lose-it’ approach, or roll hours over to the next month.

Soft (variable): a more flexible agreement where the scope of work isn't fixed. The client can request work or services as needed, and the retainer fee is applied towards the cost of the work.

A typical retainer includes the following process:

  1. Agreement. You and your client agree on the scope of work, deliverables, fee and payment terms.
  2. Payment. Your client pays the retainer fee upfront, usually on a monthly or quarterly basis.
  3. Work requests. These are submitted to your agency to be approved, estimated and scheduled.
  4. Reporting. Your agency provides regular reports on work completed, number of hours worked and remaining retainer balance.
  5. Renewal. You’ll usually renew your agreement at the end of each period, making any necessary adjustments.
  6. Termination. Either the agency or client can terminate the retainer, with an agreed notice period.

Retainers: the agency challenge

On paper, retainers are great. And in reality they’re great... if they’re properly managed. But they do bring their own set of challenges, which need some careful management to avoid hitting your profits.

Here are some of the challenges you might need to tackle:

Scope creep. If the scope of work extends beyond your agreed amount, you need to find capacity to actually do the work, and make sure you’re billing for the extra hours.

Resourcing. Balancing retained work with other projects and priorities is key to avoid overcommitment or underutilisation of resources.

Reporting and accountability. This is one of the most time-consuming aspects of retained work, as you need accurate tracking and documentation to keep your client up to date with completed work and remaining balance.

Client expectations. Set out upfront what these are. Vague expectations can lead to problems further down the line if the client doesn’t think you’re meeting the scope of the work.

Ultimately, to make a retainer work for everyone, you need clear communication and accountability on both sides.

How Synergist can help you manage retainers

Using Synergist agency software can help to make your retained projects run smoothly. You can set up three types of retainers in the system:

Monthly method: a phase per month

This is the best approach if you’ve agreed a hard/fixed retainer with a monthly 'use-it-or-lose-it' model, with no hours carried over to the next month.

Using Synergist, you can set up one job for the year and add a phase per month. Add the agreed hours per team against a charge code to each phase, so you can track time spent versus estimated and avoid overservicing. If your client tends to use more hours in a specific month, you can allocate more to this and less to another, helping to accurately forecast capacity.

Team members then log time against the relevant month and charge code, and you can create a monthly sales invoice.

Top tip: Close each phase at the end of the month so team members can no longer log time. Remind them to log time on the new month/phase to keep timesheets and profit reporting accurate each month.

Top tip: Filter a list of all phases for a specific month to simplify invoicing. For example, you can list all the July phases across all jobs and use the 'batch draft invoice creation' feature to batch invoice.

Service model: a phase per service

If you have a hard retainer where hours can carry over, the service model can make timesheeting easier, as you use the same job/phases all year.

You can set up one job for the year with a phase per service or deliverable. For example, if you agree to 10 hours of SEO per month, create a phase with an annual estimate of 120 hours.

Team members can then timesheet against their type of work, and you can see how much time/cost you've spent vs estimated and how much time remains. If you look at the percentage used, you should be a twelfth in (approx 8.3%) after month one.

This method allows you to balance busier and quieter months. Plus, you can accurately forecast capacity, as it spread loads time across the year and re-spreads the time remaining each month. For example, if you spend 15 hours instead of 10 in month one, the remaining 105 hours will be recalculated, so across the 11 months so, 9.5 hours per month.

Top tip: if you're consistently spending more time on a specific deliverable, discuss with your client if they need to increase their budget or reduce activity moving forward.

Drawdown method: separate jobs per deliverable

This method is best for ‘soft’ retainers, where you invoice each month to create a pot of money/budget to be allocated to any job.

With Synergist, you can create a billing plan, with an annual job to invoice against each month. You then create a job for each deliverable.

Group jobs under a 'project' or create a filtered list to view and report on all jobs under that retainer. You can also use Synergist's revenue management module to accrue and defer revenue from the main invoicing job to the month it's spent.

Top tip: it’s still a good idea to estimate time and costs for each job, so your client knows how much of their retainer will be used. This also means you can calculate capacity and track time remaining on each job.

Using Synergist to report on retainers

Client reporting

You’ll need to provide regular reports to your client on the work completed, hours worked and remaining retainer balance. Download timesheet reports from Synergist, showing how time has been spent each month, into Excel, visual charts or PDFs.

Internal reporting

Progress reports
Reports the estimated, actual and remaining hours for each retainer by phase and the total for the year. Plus, you can see any overservicing on a monthly basis or by service/deliverable.

Invoiced vs actual
Using the data viewer, you can report on the retainer value vs the value of the time spent for the past month or year to date. This helps you to quickly check if you're under or overbudget.

Time remaining
Synergist allows you to create a retainer report showing the time remaining each month. The system spreads annual estimated hours over the days per month and removes any used hours so you can see how much time is left. If you have a rollover agreement, the remaining monthly hours will be reassigned over the remaining months.

Capacity forecasting
You can report the number of hours to be delivered each month by charge code, team or person and compare this to your team's capacity to make sure you have the right resources.

Retainers go a long way to adding some stability to the otherwise volatile nature of agency work. They are also a great way to ensure guaranteed income on a regular basis, which can relieve some financial pressures. But they do need some TLC. It can be easy to let retained work slip in favour of the usual rush jobs and instant deadlines. Using Synergist to view your data and produce accurate reporting can help you navigate each step of the retainer journey... and lead to a stronger likelihood of renewal.