Topic

Messages

Retainers

Our agency currently does not bill any of our clients a retainer, but we are considering it. We would bill outside services at cost, and the retainer would cover everything else. I would like to know how other agencies are handling retainers. Do you do monthly, quarterly, or annual evaluations for the client of the retainer amount vs. actual time spent? Do you offer the the client a refund if not as much time as anticipated was spent, or is it just taken into account when it comes time to renegotiate the fee for the next year? Same question if time is far more than anticipated? Thanks for any insight.

Chris Kirk
Controller
Kircher Marketing Communications | Advertising & Design | Interactive Media

We bill our retainer clients on a monthly basis and keep careful track of all staff hours. At the end of each quarter we evaluate where we are against the retainer. (The retainer amount per month is based on an agreed upon hourly rate). We give the client 10% in either direction. If they exceed budgeted hours by 10% we don't charge them more. If they are under by 10% they don't get a credit. If the hours are over/under by more than 10% we either credit the hours to the next quarter or they pay us for the additional hours expended. Quarterly accounting works well, but you could also do it semi-annually. If at the end of a year the hours/retainer equation is very out of whack we take that into account in determining the following year's retainer amount.

Madelyne Kirch
Sun & Moon Marketing

We bill retainer clients on a monthly basis (based on an annual contract). Any job that falls in the scope of the original retainer agreement is billed against the retainer. Anything outside the scope of the retainer contract is billed separately to the client. Our retainer contracts are reviewed annually; and, a new contract done based on usage from the year before. We've not had a situation where we've had to refund since our annual contracts are usually renewed. We have, on a couple of occasions, had situations where the client has gone over his retainer to a point that we've had to request additional payments. But that doesn't happen often.

Nell Stewart
Tillman Allen Greer

"Back-in-the-day..." we had retainer relationships with most of our clients. What worked best was entering into a 12-month agreement at a specified amount per month. We determined the amount by drafting a 12-month straw-dog strategy proposal and execution plan. The retainer would then be applied to billings as jobs/projects were completed. We generally applied the retainer to design and strategy, and would bill net-30 any outside costs incurred. It was a rare month to have retainer money unapplied, as the account team was encouraged to "always have something in the hopper" for those accounts. If no work was done for the month, we would examine the relationship, and revisit the agreement. Today, the economy has pushed us to project based relationships, and happy to get the work!

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

We analyze monthly the amount of retainer billed versus actual billable cost incurred and yes we use that analysis as a basis for how to renegotiate renewed contracts.

Mike Thomas CPA
Fuse Advertising Inc.

A slightly different variation from Second Wind's recommendation.

Terri Strobel
Sands Costner & Associates

Yep, us too!

Barry Owens
Controller
MAI Sports, Inc.