Overview

This article contains the instructions and recommended cadence for managing recurring retainers within Parallax Active Projects. 

Project Financial Settings - Setup:

1. Blue - As a fixed retainer project, the way you record revenue is not through hours like T&M projects, but through “Service Revenue”.  The frequency of these service revenue entries will depend on the Red dotted settings.
2. Red - The period in which the retainer renews 
3. Yellow - Is the total number of hours planned which is used in the cost calculation in the shaper.

Recording Service Revenue:

1. While in Pre-Sale, click the +Service Revenue button, you will get a modal to add a recurring revenue event for the period you have.  
2. You can add as many as you like, but Parallax’s recommendation is to add Service Revenue with the frequency of the retainer’s budget reset.
   • Scenario #1:  Imagine you have a monthly recurring retainer, you could record your revenue monthly at the start of each month.
   • Scenario #2:  You could also record all your revenue for a contract (say, 12 months) at one time if you would like, as 12 separate service revenues.  The Operational reminders here are to make sure your organization gets ahead of the contract renewal, or removes the revenue should the contract end early.

Recording Sold Cost for Margin comparison:

If you would like to add a sold cost to generate a margin against the revenue entered, follow these steps:

1. While in “Awaiting Start,” add "Other Costs" as a total of the anticipated costs for the project to establish the % Sold Margin
2. Set the project to "In Progress"
3. Remove the "Other Costs" you added, as Actual costs will be generated by the hours put against the project, which will then be used to compare Sold Margin to Actual Margin
4. In this process, if you want Projected Costs, you would need to add planned work to each retainer, but it's not necessary to change the way that's currently happening.

Revenue & Costs tracked in the Shaper:

1. Blue - As a fixed retainer project, your Service Revenue events will now total to create the Projected Revenue for the Service Offerings.
2. Yellow - Is the total hours (projected) multiplied by the role & peoples’ cost rates.

Forecasting Recurring Retainers:

1. The intent is to shape and resource the project to the project needs, so the Project or Program Manager is usually best suited to shape and forecast allocations.
2. Planned Work versus Unplanned Work
   • Planned work - means that in a given Period, a team is working against a known backlog of work or using a methodology like Agile to execute work.  This should be shaped like any other project and shaped to the Period of the retainer.
   • Unplanned work - could be emergency or support work that is on-call.  Unplanned work is always difficult to forecast.  But with Parallax, using the prior Periods, we recommend you shape your projects informed by historical patterns.  By using the shaper, you can average the number of hours each role used per Period and average out those hours over the upcoming Period.
     • It’s important to check in and use unplanned requests to quickly reshape your plan.  By its nature, it’s reactive but it will allow other departments or leadership to quickly reallocate and support the request and the team responsible for handling it
     • Best practice for requests that may create overages from the original set of hours is to have up to 3 additional service offerings:
       1. Non Billable for overhead management and write offs
       2. Depending on the contract, a T&M overage offering
       3. Depending on the contract, a “Jump to the front of the line” emergency rate and service offering

Ongoing Checklist:

Weekly:

Project/Resource Manager: 

• Follow Resourcing & Shaping best practices - ensuring you consider resourcing during the retainer period & that you are accounting for Planned or Unplanned work.
• Report on actual hours used & remaining planned hours available for the retainer period.
  • If under utilized - follow company standards
  • If over utilized - alert leadership & consider change order or use of future retainer hours if possible.

Monthly:

Project/Resource Manager:

• Check Service Revenue is up to date for retainer
  • Add additional Service Revenue as needed
  • Review Actuals versus Planned - based on Resourcing best practices
  • Recommend that if the retainer is in the last 3 months of contract, alert leadership to begin contract renewal & upsell.

Department/Delivery Leads:

• Review department team member Planned versus Actuals
  • Discuss with Project/Resource Manager adjustments to team members as needed to support the project or ensure margin goals.