Retainer vs Deposit Invoicing: How To Choose the Best Workflow

Many firms use the words “retainer” and “deposit” to mean the same thing, but BigTime sets them up differently. In BigTime, a retainer is the same fee billed every billing cycle, and a deposit is an upfront payment that time burns down against. It helps to confirm which one fits how you bill before setting anything up.

Good to know: If you collect payment up front and work it down over time, what you may call a retainer, BigTime calls a deposit.

Common symptoms of a mismatched setup include:

• A deposit balance isn't burning down on your invoices
• Time pulls onto the deposit invoice
• A retainer keeps billing after the budget has been reached
• Hours bill on top of the retainer
• The invoice shows a single Retainer line when you expected other items alongside it
• Deposit calculators don't appear in the calculator gallery

How Retainers and Deposits Compare

Which Fits Your Firm: Retainer or Deposit?

Answering these questions helps your team pick the right setup the first time.

• Do you collect payment from your clients before work starts? If yes, you're likely using a deposit.
• Do you bill the same amount every billing cycle? If yes, you're likely using a retainer.
• Does the time your team works draw down against that payment? If yes, it's a deposit. If the fee stays the same no matter the hours, it's a retainer.
• When do you apply the payment? On the next invoices, or held until the final invoice? Holding it until the end uses a slightly different deposit workflow (see Apply the Deposit at the End below).
• What happens when work goes over? Do you bill the extra time, add a separate overage charge, or write it down?
• Do clients ever top up the payment? If so, BigTime can prompt a new deposit when the balance runs low.
• Is it a set number of payments? For example, six equal installments. These are often best set up as milestones rather than a retainer.
• Where does the payment post in your accounting system? Customer deposit, deferred revenue, or a revenue account. This determines how your accounting integration is set up.

• Should expenses count against the payment? By default, deposits draw down against time only.

   

How BigTime Reads Common Terms

Which Setup to Use

Pick the scenario that matches how your firm bills.

Resolution Steps: Retainer Workflow

A retainer bills the same value every time you invoice, until you stop it. There is no automation: invoices are always created manually (individually or in bulk), and nothing stops the retainer from billing once the budget is reached.

Option A: Retainer Calculator (Single Line Item)

Best when the retainer is the only thing on the invoice. The invoice shows one line called “Retainer”, with time detail available as backup.

• Step 1:  Turn on the calculator: GEAR ICON> INVOICE SETTINGS > CALCULATORS > CHECK OUT BIGTIME'S GALLERY OF SPECIALIZED CALCULATORS > RETAINER. SAVE.
• Step 2:  On the project, go to DETAILS and enter the per-cycle amount in the RETAINER field (for example, $1,500). SAVE.
• Step 3:  Optional but recommended: on the project's TASKS/TO-DOS > EDITOR, enter the total contract amount as the budget (for example, $109,000) so VITALS > BUDGET STATUS shows when you've billed it all.
• Step 4:  Team members track time to the project's tasks as usual.
• Step 5:  To bill, go to INVOICING & PAYMENTS > WORK IN PROGRESS, check the project, select CREATE SELECTED INVOICE, and choose the RETAINER calculator. If there's no time yet, use CREATE INVOICE from the Invoicing Overview instead.
• Step 6:  Set the date range to the billing period so the right time clears from WIP. Rename the line if needed (for example, “November Retainer”).
• Step 7:  For an overage, add a manual line (for example, “Overage at $150/hour”) and enter the amount. If you're integrated with an accounting system, link that line to the right item under ITEM LINKS.
• Step 8:  Finalize. The time in the date range clears from WIP automatically.
• Step 9:  Before each cycle, check VITALS > BUDGET STATUS. When the budget hits 100%, stop billing and close the project or task.

The line always reads “Retainer”. To show something different, change the calculator configuration so it displays another label consistently on every invoice (for example, “Quarterly Fee”), or override the line item name on each invoice after the retainer is generated. Keep “Retainer” as the calculator type either way, or the Retainer field won't link to it.

Option B: Item Based with a Retainer Billing Fee Type

Use Option B when the recurring fee bills on top of other fees on the same invoice, such as time & materials or milestones. The Retainer Billing task adds the same amount every cycle, while the project's other tasks bill by their own fee types, all on one invoice. Option A can't do this, because its invoice is only the single Retainer line.

Option B also controls what the retainer displays as on the invoice. The line item takes the retainer item's task name, so naming the task (for example, “Monthly Support Retainer”) sets that label on every invoice automatically, with no override at billing time.

Because the Retainer Billing task keeps billing until it's closed, it's for an ongoing fee, not a series of one-time payments.

Example: A recurring site inspection fee set to Retainer Billing at $125 per cycle, with the project's other tasks billed as T&M.

• Step 1:  Turn on ITEM BASED under GEAR WIDGET > INVOICE SETTINGS > CALCULATORS.
• Step 2:  On the project's task EDITOR, open the gear widget, add the FEE TYPE and RETAINER fields, select APPLY, then refresh the page.
• Step 3:  On the recurring task, set FEE TYPE = RETAINER BILLING.
• Step 4:  Enter the per-cycle amount in the task's RETAINER field. Use the FEES field for the total (for example, retainer $100,000 and fees $700,000 for seven cycles).
• Step 5:  Set the tasks that time is tracked to underneath the retainer item to FEE TYPE = NON-BILLABLE. This keeps the hours off the client invoice while still clearing them from WIP. The time stays billable in reporting; it is not treated like PTO.
• Step 6:  Set every other task to its own fee type (Time & Materials, Milestone, or Percent Complete).
• Step 7:  To bill, create the invoice with the ITEM BASED calculator. The retainer line appears on every invoice until you close that task.
• Step 8:  Track progress in VITALS > BUDGET STATUS and close the retainer task when it's done.

If you're actually billing a set of one-time amounts rather than an ongoing fee, use Milestone instead (see the next section).

When the Payments Are a Fixed Number of Installments

Use ITEM BASED with one task per installment and FEE TYPE = MILESTONE. Each milestone auto-closes once it's billed, so it can't be billed twice. A Retainer Billing task keeps adding the same amount every time, so someone has to watch the budget.

Resolution Steps: Deposit Workflow

The rule that matters most: Create the deposit invoice first, before any time is tracked, and the deposit only burns down on invoices built with a “with Deposit” calculator. Deposit calculators are available on the Advanced and Premier packages; they don't show up on Essentials.

Setup

• Step 1:  Go to GEAR WIDGET > INVOICE SETTINGS > CALCULATORS > CHECK OUT BIGTIME'S GALLERY OF SPECIALIZED CALCULATORS.
• Step 2:  Turn on the deposit calculator that matches how the project bills:

• T&M WITH DEPOSIT for hourly work (most common)
• FIXED FEE WITH DEPOSIT for fixed fee or percent complete projects
• ITEM BASED WITH DEPOSIT when items use mixed fee types

• Step 3:  SAVE and close. Turning one on adds DEPOSIT AMOUNT and DEPOSIT MINIMUM fields to every project's Details tab.

Part 1: Record the Deposit on the Project

• Step 1:  Open the project and go to DETAILS.
• Step 2:  Scroll to the bottom and enter the upfront amount in DEPOSIT AMOUNT (for example, $5,000). It's a dollar value, not a percentage.
• Step 3:  Leave DEPOSIT MINIMUM blank unless the client re-ups the deposit when it runs low (see Deposit Minimum below).
• Step 4:  SAVE.

[Insert Screenshot: Project Details tab showing Deposit Amount and Deposit Minimum]

If you're moving an existing project into BigTime, enter the remaining deposit balance as of go-live, not the original deposit.

Part 2: Create and Send the Deposit Invoice

The WIP screen only shows unbilled time and expenses, so with no time on the project, build this invoice another way:

• Step 1:  Go to INVOICING & PAYMENTS > INVOICING OVERVIEW > CREATE INVOICE (or the project's THREE DOTS > BILLING HISTORY > ADD INVOICE).
• Step 2:  Select the project, then NEXT.
• Step 3:  Choose the matching WITH DEPOSIT calculator, then NEXT.
• Step 4:  Finalize. The invoice shows the deposit amount. Send it to the client.

If time already exists on the project, set the invoice date range to a period with no time in it. Otherwise the time pulls onto the deposit invoice.

Part 3: Burn Down Against the Deposit

• Step 1:  Team members track time to the project as usual.
• Step 2:  At billing time, go to WORK IN PROGRESS, check the project, and select CREATE INVOICE.
• Step 3:  Choose the same WITH DEPOSIT calculator. Using a standard calculator here skips the burn-down.
• Step 4:  Finalize. While time is below the remaining balance, the invoice total is $0 and shows the prior balance and the amount used. Once time exceeds the balance, the invoice bills only the difference.
• Step 5:  Use a template that shows the line item table (for example, DETAILED MULTI-PAGE) so the client sees the $0 line and the time backup. The deposit note lands in the item description field, not the invoice notes memo, so the template needs to display item descriptions.
• Step 6:  Keep using the with Deposit calculator on every invoice until the balance is $0. After that, switch to the standard calculator (or keep using the with Deposit one; both work).

Variant: Apply the Deposit at the End

If you hold the deposit until the final invoice:

• Step 1:  Record the Deposit Amount and send the deposit invoice (Parts 1 and 2).
• Step 2:  Bill interim invoices with standard calculators (T&M, Fixed Fee, Item Based, or Retainer). These don't touch the deposit.
• Step 3:  On the final invoice, switch back to the WITH DEPOSIT calculator to apply the balance.

Deposit Minimum (Recurring Deposits)

Deposit Minimum is a threshold that triggers a re-up. For example, with a $5,000 deposit and a $2,000 minimum, once the balance drops to $2,000 you send a new deposit invoice for the original amount. Most firms don't need it.

Reporting on Deposits

Build a project-level deposit report so your team can see who has a balance:

• Step 1:  Go to ANALYTICS > REPORT CENTER > PROJECT REPORTS > OVERALL MARGIN BY PROJECT > CUSTOMIZE.
• Step 2:  Add the system fields DEPOSIT AMOUNT, DEPOSIT CREDITS (relabel as “Deposit Used”), and DEPOSIT BALANCE. Use the budget fields, not custom fields.
• Step 3:  Rename the report (for example, “Deposit Report”) and publish.

This matters because nothing flags which projects need a with Deposit calculator; the report is how your billing team keeps track.

Resolution Steps: Hybrid Scenarios

These additional scenarios combine parts of the retainer and deposit workflows above.

Scheduled Progress Bills Plus a Prepayment Applied at the End

The client pays a $10,000 prepayment, then is billed $27,500 on a set schedule, and the prepayment is credited on the final invoice.

• Step 1:  Set up the project's tasks as one Milestone task per scheduled bill (for example, March, April, May, and June at $27,500 each).
• Step 2:  Enter $10,000 in DEPOSIT AMOUNT and leave Retainer blank.
• Step 3:  Invoice 1: ITEM BASED WITH DEPOSIT to bill the $10,000.
• Step 4:  Interim invoices: plain ITEM BASED, billing the next milestone. The deposit is held.
• Step 5:  Final invoice: ITEM BASED WITH DEPOSIT, billing the last milestone with the $10,000 applied.

Recurring Fee with Occasional Overages

Use the Retainer calculator for the flat fee. In months with overage, add a manual “Overage” line for the difference between time value and the retainer. Link it to the right item in the accounting system.

Retainer Cap with Revenue Posted by Person

The Retainer calculator posts one “Retainer” line, which doesn't work when revenue has to post to the accounting system by individual. In this case, use T&M for everything, with write-downs on months over the cap.

Deposit on a Percent Complete Project

Use Item Based with Deposit or Fixed Fee with Deposit. Percent complete is set by the task fee type, so Item Based with Deposit carries it through. If you want a “Deposit Received” label, change the line description on the burn-down invoice.

Mixed Months on One Project

A project isn't locked to one calculator. You can bill T&M one month and a retainer the next. Just remember the deposit only burns down on a with Deposit calculator.

Best Practices

Deposits

• Remember that you can't choose a partial amount to apply. Each burn-down invoice applies the lesser of the invoice's time value or the remaining balance. A manual negative line can reduce the invoice, but it does not reduce the Deposit Balance.
• Expect expenses not to burn down by default. T&M with Deposit only counts time; including expenses means changing the calculator formula.
• Create the deposit invoice before time is tracked, or narrow its date range to exclude existing time.
• Run the deposit report so your team knows which projects need a with Deposit calculator, since nothing flags a deposit project at billing time.
• Confirm your BigTime package before setting up deposit billing. Deposit calculators are available on Advanced or Premier only and don't show up on Essentials.

Retainers

• Plan for no automation. BigTime won't generate retainer invoices on a schedule, and start dates on tasks don't trigger billing.
• Plan for no automatic stop. A Retainer Billing task keeps billing every time until someone closes it, so train project managers to check VITALS > BUDGET STATUS before every invoice.
• Keep in mind that turning on the Retainer calculator adds a Retainer field to every project. You can disable the calculator, but the field stays.
• Set child tasks under a Retainer Billing item to Non-Billable, or the hours bill on top of the retainer.
• Remember that fee types only drive billing with the Item Based calculator. With any other calculator they act as labels.

Expected Outcome

Once your setup matches how your firm bills, retainer invoices bill the same amount every cycle until you close the retainer, and deposit invoices burn down against the remaining balance until it reaches $0, then bill only the overage. Your team can see which projects carry a deposit balance through the deposit report.