Professional Firms: Retainer Billing, Part Payments and Withholding Tax

A professional firm sells time and expertise, so its biggest financial risk is billing late and collecting slowly. Law firms, accounting practices, consultancies, agencies and engineering firms share the same pattern: a retainer and a project on the same client, part payments arriving without a reference, and follow-up that depends on whoever manages the relationship.

Bill retainers automatically

A monthly retainer should never depend on someone remembering. Set it up once to go out on the same day each month, with a way to pay on the invoice. Bill project work separately, at agreed milestones, so the client can see what each payment is for.

Expect withholding tax, and record it

Corporate clients commonly deduct withholding tax from professional fees, so the payment is less than the invoice. Record the deduction against the invoice, ask the client for the WHT credit note, and keep it, because it is a credit against your own tax. Keep your TIN on every invoice. See withholding tax.

Note too that professional services firms are excluded from the small company exemption in the Nigeria Tax Act 2025, however small they are. See the small company rules.

Take follow-up out of the relationship

Partners and account managers are reluctant to chase the clients they advise. Let reminders come from the system on a schedule, so the relationship stays warm and the invoice still gets paid.

Know which clients are worth it

• Treat each engagement as its own budget.
• Post contractor invoices, software, travel and other costs against the engagement that incurred them.
• Compare what each engagement cost with what it billed and collected.

How Billif helps

In Billif invoicing, recurring retainers go out on their own with a pay-link attached. Part payments, including those short by WHT, record against the invoice and leave a dated balance, and reminders chase on schedule. Engagements can run as projects, with contractor bills and expenses posted against them. See how professional firms use Billif.