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How Is Retainer Billing Revenue Recognized and Reported?

Retainer Billing

Retainer Billing uses accrual-based revenue recognition — retainer payments are not counted as revenue until work is applied to the Retainer Bill.

Why it matters: How Canopy handles revenue for Retainer Bills affects what appears in your Aged Receivables and Revenue and Profitability reports — understanding this prevents confusion when a paid retainer doesn't show up where you'd expect it.


Required: Time and Billing Permissions.
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⚠️ Beta Feature: Retainer Bills are currently in Beta and must be enabled before use. Go to Settings > Experimental Features and toggle on Retainer Billing.



Table of Contents



How Revenue Recognition Works

When a client pays a retainer invoice, that payment is held — not recognized as revenue — until work is applied to the Retainer Bill. This mirrors how traditional invoices work: revenue reflects completed work, not money collected upfront.

What this means in practice:

  • Paying a retainer invoice does not generate revenue in your reports

  • Revenue appears as WIP is applied to the Retainer Bill

  • If a retainer is never drawn against, it does not appear as income
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Aged Receivables Report

The Aged Receivables report treats Retainer Bill retainer invoices like unpaid standard invoices until payment is received.

  • Unpaid retainer invoices appear in the Aged Receivables report

  • Paid retainer invoices are removed from the report
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Revenue and Profitability Report

The Revenue and Profitability report reflects work applied to a Retainer Bill — not the retainer invoice amount itself.

  • Applied WIP appears as recognized revenue in the report

  • The retainer invoice amount is not reflected as revenue until work is applied

  • This matches standard invoice behavior, where revenue is based on completed work
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Summary

Retainer Billing follows standard accrual revenue recognition: collecting a retainer doesn't generate revenue until work is applied against it. Use Aged Receivables to monitor unpaid retainers and Revenue and Profitability to track work-based revenue across your Retainer Bills.
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