Retainer
An advance payment for ongoing services.
A retainer is an upfront fee paid to secure ongoing access to a professional's services, common in legal, consulting, marketing, and creative fields. Retainer models include prepaid (hours deducted as used, with unused hours expiring or rolling over) and recurring (a fixed monthly fee for a defined scope of work). Retainers provide predictable income for the provider and guaranteed availability for the client.
Example
A small business pays its accountant a $1,500 monthly retainer for bookkeeping, payroll processing, and quarterly tax preparation, ensuring consistent service without per-transaction billing.
Why It Matters for Your Business
Retainers create predictable recurring revenue and deepen client relationships, but clearly defining scope and unused-hour policies prevents disputes.
Practical Tips
- •Define exactly what the retainer includes and excludes in writing.
- •Set clear policies for unused hours—do they roll over, expire, or reduce the next month's fee?
Related Terms
More Invoicing Terms
AR Aging
A report categorizing outstanding invoices by age.
Billing Cycle
The recurring period between billing statements.
Credit Memo
A document reducing the amount owed by a customer.
Days Sales Outstanding
Average days to collect payment after a sale.
Invoice
A document requesting payment for goods or services.
Related Financial Guides & Resources
Automate Your Finances with AI
FiscalInsights uses AI to automate bookkeeping, track expenses, and forecast cash flow — so you can focus on your business.
Start Free Trial