Glossary · Invoices and billing
Retainer
A retainer is a fee a client pays in advance or on a fixed schedule to secure a supplier’s time or availability.
Retainers take two common forms. A paid-in-advance retainer is a deposit held against future work and drawn down as hours are billed. A monthly retainer is a fixed fee for an agreed scope or block of hours, invoiced on a schedule.
Billing retainers in advance reverses the usual credit risk: the client pays before the work, so a missed payment pauses the work rather than adding to a debt. That is why agencies, law firms and consultancies favour them.
In the accounts, money received in advance is not yet revenue. It is held as deferred revenue — or as client money, for law firms under trust-account rules — until the work is delivered.
Example
A marketing agency invoices €5,000 on the 1st of each month for that month’s work. When a client misses a payment, the agency sends a reminder before any further work starts.