As a freelancer (or even a small and medium-sized business), your number one priority should be getting more client work and a constant stream of income. You shouldn’t spend much of your time creating invoices and chasing payments. You should learn how to automate the whole process of invoicing and accept recurring payments so that you can use that time to focus on your work and growing your business.
This can be done by using cloud accounting software like Freshbooks and setting up retainers. Using Freshbooks retainers, you can accept recurring payments, keep track of the number of hours you have worked against the allotted time, and work more efficiently.
What is a retainer
Retainers help you bill your clients for a fixed amount upfront every month for any work you might have to do for them. In exchange, you will have to allocate a fixed amount of time for them and any work they might assign you. This helps you create a constant income stream and you will be paid even if you aren’t working (when there’s no work).
For example, let’s assume your client has you on a retainer and pays you $800 upfront every month for eight hours of work. Now, even if the work they have assigned you doesn’t take much time or you aren’t assigned any work at all, you can keep the money. It’s the cost of having you on their retainer. You will be available to them when they want.
Now, suppose you are assigned a project and it takes more than twenty hours of work that month and you are working overtime, Freshbooks retainer will automatically account for those extra hours of work and will bill them with a one time invoice.
Benefits of retainers over recurring invoices
Accepting payments using retainers definitely has got more advantages than accepting payments using recurring invoices. With retainers, you can easily track your income, allotted time and the workload. Also, you needn’t waste your time sifting through endless email threads looking for information on what tasks were assigned to you and how much time it took for you to get back to them with the results each time.
Apart from saving time, it can help your business become profitable by bringing in a steady flow of income. Moreover, you needn’t worry about invoicing them each month and calculating the cost of working extra hours. With retainers, you can easily predict how much money you can make each month and plan your expenses accordingly. That’s the power of retainers over traditional recurring invoices.
How to accept recurring payments using Freshbooks retainers
Accepting recurring payments is a breeze when you use Freshbooks, the best accounting and invoicing software on the web.
Time needed: 15 minutes.
With that said, let’s see how you can accept recurring payments from your clients using retainers.
- Create a new retainer
Once you have logged in to your Freshbooks account, navigate to the ‘Retainers’ tab under the ‘Invoices’ section and click on the ‘New Retainer’ button.
- Fill in the details
Now, fill in all the required information such as the client and retainer details, your overtime charges, and whether or not you want to send the invoice automatically.
- Verify the information
You will now be presented with a sample retainer invoice. This is how your retainer invoice will look when sent out to your client each month. If you are not satisfied with it, you can ways edit it by clicking on the ‘Edit Terms’ button. You can further customize it using the options present on the settings menu in the right.
- View retainer dashboard
Here is how your retainer will look once it is up and running.
- View retainer summary
You can also view your retainer summary report to keep track of your time and work entries. You can use this to track your work personally or send it to your client to let them know your progress.
That’s it, you have now successfully created a retainer invoice to charge your clients automatically upfront every month.
Thus I hope you learned how to bill your clients automatically each month and accept recurring payments through Freshbooks retainers. Remember that retainers are more profitable than one-off projects or deals. Retainers can save you more time and help you bring in a steady stream of income.
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