You can collect a retainer monthly by direct debit in two ways: bill the year's retainer once and collect it in monthly instalments, or send a fixed retainer invoice each month and collect each one on its due date. Ad hoc work is usually better kept off the direct debit unless the client has agreed in writing that it can go on there, so send it as its own invoice with a payment link.
In this article
The short version
- Bill the year once and collect it in monthly instalments, or invoice the retainer each month.
- Fees received before a bill is delivered are client money under the SRA Accounts Rules, so bill before you collect.
- Keep ad hoc work off the direct debit unless the client agreed to it in writing beforehand.
- Send ad hoc work as its own invoice with a payment link.
- One mandate can cover varying amounts, with advance notice of each collection.
Two ways to set up a monthly retainer
Whether it's an ongoing advisory line, commercial support or company secretarial work, many clients on a retainer would rather pay a set amount each month than one large bill, and direct debit takes the remembering out of it on both sides.
If the fee is fixed for the year and the scope is stable, you can deliver one bill for the full year at the start and agree that it's paid in twelve monthly instalments, each collected by direct debit on a set date.
If the retainer is more likely to change, or either side can end it at short notice, a monthly invoice tends to suit better. You send an invoice for each month's fixed fee and collect it by direct debit on its due date. Each month stands on its own, so a new fee after a review is simply a different amount on the next invoice, and the client gets the monthly invoice their own finance team may want anyway.
Whichever you choose, bill before you collect. Under the SRA Accounts Rules, money you receive for fees before you've delivered a bill for them is client money and has to be held as such, while a payment against a bill you've already delivered is the firm's own money. A monthly collection with no bill behind it would be money on account, so talk through your set-up with your COFA before the first collection goes out.
Why ad hoc work needs its own route
Say a client pays £1,200 a month for a commercial retainer and asks you to handle a one-off lease review in March, which you bill at £850. It's tempting to add the £850 to March's collection and save everyone a step.
The client would still be told the new amount before the collection, because direct debit rules require advance notice of each amount and date. But a notice isn't the same as agreeing to it. If the client thinks a collection was taken in error, they can ask their bank for a full and immediate refund under the Direct Debit Guarantee, and that covers the whole payment, retainer included. You'd then be chasing £2,050 instead of £850, and the client may start to wonder what else could turn up on their direct debit.
Even without a refund, an unexpected larger collection is likely to prompt a call asking what it is. Clients choose a retainer partly because it's predictable, and a steady monthly amount keeps it that way.
A separate invoice for the ad hoc work avoids all of that. The client sees the bill on its own, can query it before paying, and can pay it from a link by card or bank payment.
What to agree in the engagement letter
Some firms do want certain extra work on the direct debit, such as a set fee for each extra board minute. That's fine if the client has agreed to it before the work starts. Cover these points in the engagement letter or retainer terms:
- The retainer amount, what it covers and the date it's collected each month.
- Whether the year is billed once and paid monthly, or invoiced month by month.
- Which extra work, if any, can be collected by direct debit, and an amount above which you'll send a separate invoice instead.
- Who at the client receives invoices and reminders.
- What happens if a collection fails, and how much notice you'll give before the retainer changes at renewal.
How to run it without collecting by hand
With Adfin, whatever you've invoiced is what the direct debit collects, on the invoice's due date. A monthly retainer, an annual bill split into instalments and a one-off invoice can all sit under the same mandate without the client signing again, and the client is told the amount and date at least three working days before each collection. For ad hoc work, you can send the invoice with a payment link by email, SMS or WhatsApp, and the client can pay by card, Apple Pay, Google Pay or pay by bank.
If a collection fails, it's retried free of charge, and after that the client can be asked to pay by a saved card or a payment link. The missed month isn't added to the next collection. That invoice stays open and is chased like any other unpaid invoice by Adfin's collection agents, within rules your firm approves, and payments are marked paid in Xero or QuickBooks if you use either.
Payouts go to one account in your firm's name, your office account. Adfin isn't a client account, so use it for fees you've already billed, not for money on account.
Common questions
Can a law firm collect its fees by direct debit? Yes. Once you've delivered a bill, you can collect it by direct debit in one payment or in instalments, as long as the client has signed a mandate and gets advance notice of each amount and date.
Is a monthly retainer payment client money? If you receive it before you've delivered a bill for those fees, it's client money under the SRA Accounts Rules. If it's paid against a bill you've already delivered, it isn't.
Can I change the retainer amount without a new direct debit mandate? Yes. The client doesn't need to sign again, but they must be told the new amount and collection date in advance, and the change should follow whatever your retainer terms say about reviews.
Who should get the reminders, the finance contact or the instructing contact? Send invoices and reminders to whoever pays them, which is usually the finance team. It can help to copy the instructing contact once an invoice is overdue, since they're often the person who can get it approved.
What happens if the client cancels the direct debit partway through the year? Cancelling the mandate doesn't cancel the bill. Whatever's left under your retainer terms is still owed, so agree another way to pay, such as a payment link for each remaining instalment.
Can ad hoc work ever go on the direct debit? Yes, if the client has agreed in writing which work can be collected that way, before the work is done. They still need advance notice of each amount and date.
Sources
- SRA - SRA Accounts Rules (accurate as of November 2026) https://www.sra.org.uk/solicitors/standards-regulations/accounts-rules/
- Pay.UK - The Direct Debit Guarantee (accurate as of November 2026) https://www.directdebit.co.uk/direct-debit-explained/direct-debit-guarantee/
- Adfin Help Centre - Create and manage instalment plans (accurate as of November 2026) https://support.adfin.com/en/articles/12590049-create-and-manage-instalment-plans
- Adfin - Direct debit payments (accurate as of November 2026) https://www.adfin.com/direct-debit-payments
