Repeating invoices for HR retainer clients with Xero

Employer clients on a monthly retainer each need an invoice raised and chased every month. If you have 25 retainer clients and raising and chasing each takes 10 minutes, that's 250 minutes, 4.2 hours a month.

In Xero you set up each retainer as a repeating invoice that is created on its date, with automated invoice reminders for late payers. Ignite is limited to 20 invoices a month, so 25 clients needs Grow at £39 excluding VAT. This is for your office account only. Client money must be handled through your client account and accounting records as the SRA Accounts Rules require.

A small employment firm in Bristol has 25 employer clients on a monthly HR advice retainer. The practice manager sets each up as a repeating invoice in Xero and turns on payment reminders.

About 2.9 hours a month saved (7 minutes x 25 clients = 175 minutes), worth around £88 if staff time is worth £30 an hour, against £39 for Grow. That pays back by about £49 a month, before VAT and before counting faster payment. It is only worth it if you do not already have an accounting system.

1. 1Check with your COFA that retainer income is office money and how it is recorded.
2. 2Start a Xero plan. Ignite at £18 covers up to 20 invoices; check that 20-invoice limit applies per month, and for 25 clients take Grow.
3. 3Set up each retainer client as a repeating invoice with its amount and day of the month.
4. 4Turn on invoice reminders and check the wording before it goes out.
5. 5Review the first month's invoices against your engagement letters.

• Ignite is limited to 20 invoices and 10 bills a month, so this firm needs Grow. Check the limits before you pick a plan.
• Xero is not a legal accounting system for client money. Keep that in your SRA-compliant client account system.
• Prices exclude VAT, and a promotional discount for new customers does not last.
• A repeating invoice keeps billing after the retainer ends. Cancel it when the engagement does.