Is Tracking Retainer Balances Making You Crazy?

If your professional services organization is like many others, you collect up-front fees, commonly called retainers, from customers for work that has yet to be performed. This may be in exchange for a discount rate for services, poor credit history, or as part of your overall business model. Once received, tracking retainer balances and reporting on them to the customer often involves multiple manual processes that challenge your billing department, confuse project managers, and lead to disagreements with the customer.

So imagine if you could tie retainer balance deductions to the delivery of the work at the proper billable rates based on the services performed. This balance management isn’t easily performed even by ERP (accounting) systems, as they’re not tied to a project management system, although some modern systems do enable you to manage, track, and share real-time retainer data across your organization. That way, stakeholders understand exactly how and when prepaid funds were consumed, which is especially important when a retainer balance is getting so low that there’s an increased likelihood of work being performed without having been pre-paid.

Replacing Cumbersome Processes

If any of these scenarios are occurring in your organization, it’s time to invest in a CRM-integrated professional services management (PSM) system. In such a system, the services work is customer specific and integrated with the sales (opportunity) information. Then, with ERP integration, your accounting system can receive the retainer funds and pass them to the PSM system.

Here’s today’s common nightmare:

  1. Your billing department sends out a project invoice for the prepayment to be applied to the work as it’s performed. When the funds are received, however, there’s no way to connect that money to the single or multiple projects that will use those funds.
  2. Your project managers regularly and manually review services performed, which are received on spreadsheets the timesheets showing the work performed. Up to this point in the process, the project managers don’t know how much money is still available and therefore cannot determine if work should continue. The spreadsheets are passed to the billing department to be re-keyed (duplicate entry) into the ERP, posted to the G/L, and trigger a report to indicate what’s still available; finance then sends the report back to the project manager. That’s a lot of time-consuming work that needs to be performed quickly and accurately to positively affect the ongoing work delivery.
  3. Another set of workflows is created to compare data from your project management system to identify balances and calculate whether other amounts should be billed to the customer, such as travel time (which is labor but rarely funded by a retainer). Or maybe there was non-billable work on the timesheet that should NOT pull from the retainer. This gets complicated fast.
  4. You have a “standalone” project management system that doesn’t track actual hours worked (only manages tasks and associated assigned resources), so it lacks the data necessary to compare work performed to balance available.

Retainer Tracking with Integrated PSM and CRM

When a project management system is integrated with the CRM system, as is the case with TimeLinx, retainer-related work can be tracked, reported, and invoiced in an automated fashion and driven by “single-point” data entry. That’s because the native system is designed to share data with the CRM module; the accounting application is only necessary for invoicing, vendor payments, staff reimbursements, and G/L updates, as the PSM system has already performed the necessary calculations for revenues and costs. The project manager can proactively control the financial performance of the project on a real-time basis, keeping the project “above water” at all times.

Unlike disconnected applications requiring multiple entries for projects, time, expenses, retainers, task management, work assignments, and scheduling, TimeLinx only requires a single data entry point that uses the comprehensive information stored within the CRM database about that customer. With the project data (including retainer consumption) tied to the customer record, your financial applications can automatically produce correct balance invoices on demand.

Beyond the accounting and billing accuracy improvements, the integration of PSM and CRM enables anyone with system access (which is permission-based) to understand how much of a retainer has been consumed, for what purposes, and when the work occurred. Customers and project managers are always in the loop regarding the retainer utilization so expectations can be set for upcoming work and required funds.

Estimated Time to Completion (ETC) & Estimated Cost to Completion (ECC)

With the combination of retainer management, task management, and the TimeLinx Revenue Optimization Engine™, TimeLinx can calculate ETC (estimated time to completion) and ECC (estimated cost to completion) values. By comparing those values to the real-time retainer balance, anyone in your organization can participate in the process of communicating with the customer about what the total project cost is likely to be and what additional funds will be necessary to complete the project.

Relationships are always better when you can communicate with your clients in advance so they can participate in the project’s success rather than being surprised at the end. Because the TimeLinx principle is always about enabling “relationships don’t end when the deal is won,” these types of capabilities allow you to deliver on that promise.


Could your organization benefit from better, faster, and easier retainer tracking? If so, we would be happy to show you all that is possible by leveraging an integrated CRM/PSM solution. To learn more, contact us today.

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About TimeLinx
TimeLinx delivers innovative project & service management software as a complete solution that perfects the sell-track-manage-support-bill cycle that services organizations must have to delight their customers; TimeLinx brings the cycle together in a single application that offers less frustration, better project management, complete reporting, and improved profitability – all specially designed for Infor and Sage.