Questions and Answers about Retainer Agreements
What is a retainer agreement?
A retainer agreement is a pre-paid annual contract where software & hardware labor charges will be subtracted from the pre-paid amount. The customer receives software and hardware labor at a discount of 40%. In addition, we provide access to a 24 hour,7 days per week computer support line.
Retainer agreements do not lose value. If at the annual renewal date of the retainer, the customer has not used up the total value of the retainer, the customer can renew the retainer by replenishing only the amount used. A service contract must be completely repaid each year even on the renewal date even if the customer did not use any of the services. Service contracts are mainly for hardware replacement parts whereas this retainer agreement is for software and hardware labor.
Any small business that does not require a full time technical support person. With a Retainer Agreement, you can afford the same support as large corporations at a fraction of the price.
If the customer uses the entire retainer, he must replenish the original amount. The date of replenishment becomes the new yearly renewal date provided the original amount is replenished within 30 days of the last preformed service and before any new service is preformed.
This annual retainer agreement is automatically renewed on the anniversary date. The customer needs to replenish only the used portion of retained amount on the anniversary date, within 30 days or before any new service is preformed.
We invoice our customers after every service call and apply all pertinent information. Once a quarter or after any major invoice we send out with our invoices a retainer report. One of the best parts of this agreement I that it actually reduces the work for accounts payable.
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