How to track agency timesheets against retainers

To track timesheets against retainers, turn each retainer's scope into a monthly budget of hours, close timesheets every week, not every month, and compare hours with budget in the middle of the month, while the account director can still do something about it. A retainer that goes over is almost never a surprise in the work, only in the paperwork, because the hours arrived after the month ended. An AI worker can do the chasing and the comparing. What to do about an overrun is the account director's decision.

Why is over-servicing found at the invoice run?

A retainer is a fixed monthly fee for an agreed scope, or a block of hours, so every hour beyond the scope comes out of the agency's margin. The job of setting hours against scope should start on the first of each month and run through it. In most agencies it starts at the invoice run, when a studio manager or project manager chases the month's timesheets, the totals are added up, and somebody notices that one client was over-serviced, with half as many hours again as their fee covers. By then the work is done and delivered, and the only options left are to write it off or to send a bill the client was never warned of.

From scope to month end: the steps today

1. State the scope in hours. Give each retainer a monthly figure, split by discipline if the fee was built that way. Today it sits in the proposal, in the account director's head, or nowhere.

2. Set the retainer up in the time system. One project per retainer, with a budget in hours, gives time one place to go.

3. Log the time. Each person logs against the right client and task, often from memory, the following week.

4. Chase what is missing. The studio manager chases, weekly in theory and before the invoice run in practice.

5. Compare. Set the hours used against the month's budget for each retainer, with the days left. This is the step that is skipped.

6. Decide. The account director chooses whether to absorb it, slow the work, bill the extra or reopen the scope.

7. Close the month. Put the final hours beside the scope and keep them for the next review of the fee.

How can you see a retainer is over-serviced before month end?

• Use the monthly budget your time system already has. Harvest, for one, lets a project's budget reset on the first day of every month, so that the spend shown starts again from nothing, and can email an alert when a project reaches a percentage of its budget that you choose.

• Remember what an alert cannot see. It counts only hours that have been logged. A retainer whose team is two weeks behind on timesheets shows as comfortably under budget. That is why the chase comes before the comparison, and why it has to be weekly.

• Hold a ten-minute check mid-month. Put every retainer on one sheet with its budget, hours to date and the share of the month gone. Anything where the hours are running ahead of the calendar gets a name and an action.

• Agree a place for work outside the scope. The extra round of amends and the "quick" request by email each need a task of their own so they can be counted. Otherwise they hide inside the retainer and the client never learns what they asked for.

• Decide the threshold now. At what share of the budget is the account manager told, at what share the account director, and at what share the client?

What an AI worker can do each week

On this job it can work from your weekly cut-off and your record of who is on leave, find whose hours are missing each week, and remind each person of the days they have not logged until they are in. It can query entries that break your rules, such as time against a client with no task, or against a retainer that has ended. Each week it can set every retainer's hours beside its monthly budget and the days remaining, and tell the account manager when one passes the level you chose, with the tasks the time went on. At month end it gives the studio manager the complete set and the list of exceptions. The chasing is specified on our page for timesheet chasing, and the weekly sheet is a small case of management reporting.

What waits for a person, and why

Each person enters and corrects their own hours, because only they know what they worked on. The worker reminds and queries, and leaves every entry as it found it. The scope and the budget are set by the account director, because they follow from the fee agreed with the client. Whether to absorb an overrun, bill it or renegotiate is theirs too, and so is the conversation with the client, which decides whether the retainer is renewed. Write-offs and what goes on the invoice stay with whoever runs the agency's finances.

What to have ready before starting

• Each retainer's scope, in hours per month.

• The projects and tasks as they are named in your time system.

• The weekly cut-off, the invoice run date and where leave is recorded.

• The thresholds, and who is told at each.

• Three months of hours against scope for every retainer, however rough, which shows which clients to watch first.

Timesheets sit beside the monthly client report and the contact reports among the jobs on our page for marketing, creative and digital agencies. The effect on how many accounts each person can carry is set out in how to scale a marketing agency without hiring more staff.

The worker would get the hours in every week and show which retainers are running over, and what to do about each one would be for your account directors. Over-servicing found at the invoice run is found a month late. Talk to our agent.