Is your agency retainer paying for more work than you priced?

A retainer can reserve availability, buy a set number of hours, cover defined deliverables, or fund work drawn down against a balance. Those arrangements create different operating questions. Start the review with the signed scope, carryover rules, exclusions, and approval process for extra work.

Ask the account lead to identify promises made outside the original agreement. A recurring extra meeting or a new reporting requirement can consume time without appearing as a formal project. Record the agreed change before treating it as either billable overage or work the agency must absorb.

Collect time and contractor costs by account, including revisions, account management, and internal review. Keep actual delivery effort separate from hours invoiced. For a fixed-fee retainer, the absence of an hourly invoice does not make the time cost irrelevant.

In an illustrative month, a $6,000 retainer uses 90 delivery hours at an internal cost of $45 per hour plus $600 of outside support. The defined direct cost is $4,650, leaving $1,350 before overhead and other excluded costs. If next month's promised work requires 120 hours at the same rates, the remaining contribution falls to zero under these assumptions.

Inspect several completed periods and explain unusual effort. An onboarding project may justify a one-time overrun, while repeated unpriced revisions suggest the ongoing scope has changed. Do not hide persistent extra work by moving time to an internal nonbillable project.

Check remaining commitments and unused allowances. An account can look profitable this month because promised work was postponed, leaving delivery costs for later. Have the accountant assess revenue timing separately where prepayments or unperformed obligations matter; a management margin worksheet is not a substitute for the accounting policy.

Choose what needs to change: the fee, deliverables, response expectations, revision allowance, or staffing mix. Show the client the agreed service and the proposed change without exposing other clients' information or internal compensation details.

After renewal, update project codes and the account budget so the delivery team can follow the revised scope. Review the first month against the new agreement. A higher fee will not repair the margin if the team continues accepting the same unpriced additions without approval.