Retainer Billing
Retainer Billing lets firms collect an upfront retainer, apply completed work against that balance over time, and track billing Retainer for long-running engagements — all in one place in Canopy.
Why it matters: Most accounting engagements don't end cleanly with one invoice — work happens over months, cash flow suffers, and clients get surprised by large bills at the end. Retainer Billing gives firms a way to collect upfront, apply work as it's completed, and keep the engagement financially visible from start to finish.
Required: Access to Time & Billing Permissions
⚠️ Beta Feature: Retainer Bill Retainers are currently in Beta and must be enabled before use. Go to Settings > Experimental Features and toggle on Retainer Billing.
Table of Contents
How Retainer Billing Works
Retainer Billing centers on a retainer:
The firm sends a retainer invoice to the client to collect funds upfront. As work is logged in Canopy, time entries and expenses are applied against that retainer balance. The Retainer Bill tracks how much of the retainer has been used and how much remains.
Key things to know:
Revenue is recognized as work is applied — not when the retainer is paid
The retainer balance is visible at all times, including a red indicator if applied work exceeds what was collected
Retainer Bills appear differently from standard invoices in Billing > Invoices, identified by a unique Retainer Bill number
WIP applied to a Retainer Bill is removed from the WIP report
When to Use Retainer Billing
Retainer Billing works best for engagements where work spans weeks or months and a single end-of-project invoice would create cash flow problems or client friction. Common use cases:
Year-round advisory or tax planning — ongoing work billed against a recurring retainer
Bookkeeping engagements — monthly or quarterly work applied against a set retainer
Multi-year compliance projects — large-scope engagements where billing in phases reduces financial risk for both sides
New client onboarding — collect a deposit upfront before significant work begins
Retainer Billing is less useful for single-service work — like a standard 1040 return — where one invoice at completion is the norm.
Best Practices
✅ Set the retainer amount to reflect the full expected scope of work. A retainer that's too small will hit its limit early. Build in a modest buffer for scope changes or write-ups.
✅ Start adding WIP as soon as work begins. Don't let time entries accumulate against a Retainer Bill without review. Regular WIP reviews keep the retainer balance accurate and surface early warnings if an engagement is trending over.
✅ Communicate the retainer structure to clients before work begins. Clients who understand they're paying a retainer — and that work will be drawn against it — are less likely to have questions when the final balance differs from the retainer amount.
✅ Don't leave Retainer Bills in Draft status longer than necessary. WIP cannot be added to a Retainer Bill that hasn't been sent. Send the retainer invoice as soon as it's ready so work can start flowing.
✅ Monitor the balance in red. If applied work exceeds the retainer amount, the remaining balance displays in red on the Retainer Bill. This is your signal to discuss an additional retainer or adjust scope — before the final invoice.
Summary
Retainer Billing gives firms a structured way to collect upfront retainers, apply work over time, and stay financially visible throughout long-running engagements. Use the related articles below to create and manage Retainer Bills in Canopy.
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