I have used Freshbooks invoicing loyally for nearly a decade now and they are always improving their platform and truly focused on customer service. They recently released another great new tool. Retainer billing.
Recurring Invoices vs. Retainers
Now, I have always used recurring invoices. I have these set these up to automatically invoice clients for hours worked over the last month. It’s been so simple and saves me time trying to track down all of my unbilled hours. I set it up once and, like magic, it collects all of my unbilled time and expenses for a specific client and project and generates an invoice. You can set it up to automatically send it as well, but I like to have it saved as a draft so I can double check I didn’t forget anything.
Retainers work a little bit differently. You would collect payment from your client up front and bill against those hours. When you have your client pay in advance you can better anticipate income, avoid scope creep and set hard and fast expectations. And if you work more than the allotted hours Freshbooks will alert you and let you create a one-time invoice to cover the overage.
What are the benefits to billing with Retainers?
- Freshbooks Retainers connect your billing, time tracking and reporting into one tool. No downloading additional apps or searching through emails.
- Retainers help keep your business profitable by keeping the client conversation focused on the project rather than collecting payments. Retainers ensure that you’re being diligent about your billing and not leaving money on the table.
- Switching to Retainers will allow you to transition to a steadier source of income and give you valuable insights into project trends, time tracking and help you forecast future profitability.
How do Retainers work?
Let’s imagine that your client has you on Retainer for $1,000, working 10 hours per month. In January you tracked 17 hours. Freshbooks will notify you that you’re 7 hours over. You’ll get the option to create a one-time invoice to cover the extra time.
What if you don’t work 10 hours? Maybe you only tracked 8 hours in February. Rather than adding those 2 hours to the March Retainer, Freshbooks will restart your Retainer with 10 hours again.
I’ve committed to creating an easy way to convert my existing clients to this Retainer model as well as make it a more normal practice for new clients as well.
Want to find out if Freshbooks can simplify your invoicing? Create your first invoice here.
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