How to track retainer and contract hours

This is a rough guide, not financial, tax or legal advice. Rules vary by country and situation, so ask an accountant or lawyer about yours.

On a retainer or an ongoing contract, a client usually pays for a set number of hours each week or month. Keeping track means knowing three things at any moment: how many hours you owe this period, whether you're behind from earlier, and how close you are to any limit. This guide explains each one, and how Tally's contracts keep count for you.

Every contract is different. What yours says about hours, rollover and limits is what counts, so check it, and ask a lawyer if you're unsure what it means.

Required hours

Start with the hours the contract asks for: say 10 hours a week, or 40 a month. If the contract starts or ends partway through a period, the hours are usually pro-rated by the work days that fall inside it. Agreed days off (holidays, time off) normally lower that period's hours rather than counting against you.

Makeup hours: when a week falls short

Some contracts say that hours you miss one week are made up later. Makeup hours are that running balance. Here's how it adds up with 10 required hours a week:

Whether extra hours "bank" toward future weeks, and whether the balance clears each month, depends on your agreement. Write down which rule you use, so you and your client count the same way.

Caps and budgets

A cap is a limit on hours or money: for the whole contract, or for each week or month. A budget is a similar ceiling you set for yourself or agree with a client, often for a project. Either way, you want a warning before you pass it, not after, so you can talk to your client while there's still room.

How Tally's contracts do it

In Tally, open Clients and choose + Contract on a client. Pick hourly, retainer or fixed price, then set the start and end dates, required hours per week or month, work days, a cap, rounding, overtime and notes. Contracts are on every plan, including Free.

• Required hours are pro-rated when the contract starts or ends inside a week or month, and days you add under Time off lower that week's requirement instead of counting as owed hours.
• Makeup hours: a short week carries the difference into the next one until it's made up. Extra hours pay owed hours down. Turn on banking to let extra hours lower future targets, or have the balance reset each month. Already behind when you started? Enter it as hours already owed at the start date.
• This week's target on your dashboard and in the iPhone and Mac apps includes any makeup hours, so you always see the number to aim for.
• Week by week under a contract shows every week's required hours, time off, owed hours coming in, hours worked, extra hours and what carried over. Premium can export it as a CSV.
• Caps in hours or dollars, for the contract or each week or month, warn you at 80% and 100%. Tally also warns you when a contract ends within two weeks.
• Rounding rounds each session up to the step you choose (6, 10, 15, 30 or 60 minutes), and overtime bills a week's hours past a threshold at a different rate.

Budgets with alerts

Separately from contracts, choose + Budget on a client to set a ceiling in hours or money, for the whole engagement or each billing period. Tally shows progress like "32 of 40 h, 80%" and sends an email and a push at 80% and at 100%. A budget works with or without a contract, and on a team client it counts every member's time.

Showing your client

A client report link can include contract progress next to your hours, so your client sees the same numbers you do. They open it in any browser without an account.

Frequently asked questions

What are makeup hours?

Hours you owe from a period where you worked less than the contract asked for. They carry into the next period until you make them up. Whether they do, and for how long, depends on your contract.

Do extra hours carry forward?

In Tally, extra hours always pay down hours you owe. They only build up ahead of time (lowering future targets) if you turn on banking for that contract, and you can choose to clear the balance each month.

What is the difference between a contract cap and a budget in Tally?

A contract says what you owe, and its cap warns you in Tally at 80% and 100%. A budget is a ceiling you don't want to pass, with an email and a push at 80% and 100%, and it works without a contract.