Mercury vs Relay: Banking for an HR Strategy Consultancy

A large project fee landing the same month as several retainer payments can make that month look unusually strong, and a founder planning next quarter's hiring off that blended number risks overcommitting once the project revenue doesn't repeat. Relay's free sub-accounts make the separation simple: route retainer income into an operating account that represents the firm's real recurring baseline, and hold project fees in a second account released to broader use on a planned schedule rather than the moment they clear.

Firms running compensation benchmarking studies sometimes handle sensitive client payroll data as part of the engagement, which is a data security and confidentiality question more than a banking one, but it's worth mentioning here because that same care should extend to how the study's own project fee and any pass-through data licensing costs are tracked. Keep those costs in a dedicated account tied to the specific engagement, both for your own margin visibility and so a client asking exactly what a benchmarking data license cost within a project can get a clean, specific answer.

A firm with a growing base of retainer clients often ends up holding more idle cash between billing cycles than a project-only consultancy would. That's worth automating: with the effective federal funds rate at 3.63%¹ right now, Mercury's Treasury sweep can capture yield near that level on cash above your working buffer instead of leaving it flat in a checking account. If your retainer base has grown to the point that a meaningful cushion sits idle each month, that's worth automating rather than leaving flat in a checking account.

A firm bridging a quiet stretch between project engagements with a line of credit is borrowing at a cost tied to the bank prime rate, currently 6.75%². Before leaning on credit regularly, check whether the retainer base alone covers baseline operating costs; a firm where retainers cover the floor and project work is genuinely upside doesn't need to finance quiet project stretches the way a firm depending on project fees to make payroll does.

A firm running dedicated practice management software to track engagements, deliverables and billing gets more from Mercury's API, pulling banking data directly into that system. A firm running project and retainer tracking out of a spreadsheet alongside QuickBooks or Xero can often start with Relay, whose accounting integrations and extra checking accounts on the free plan (up to 20 per business per its pricing page) may cover the need without custom integration work.

A consultancy that starts as a solo practitioner doing project work often adds retainer clients as it grows, which shifts the balance between lumpy and steady revenue over time. Revisit the account structure at least annually, since a setup built around mostly project work in year one may need real adjustment once retainers make up half the business by year three, and a founder who never revisits it is the one most likely to be caught flat-footed by a slow project quarter that a now-larger retainer base should have comfortably absorbed.

Bringing on associate consultants, whether as employees or subcontractors, is usually the point where a founder's informal habit of checking one balance before making a decision stops working. Set up the project and retainer separation described above before that first hire starts, not after, so payroll for a new associate is always funded from a clearly identified source rather than competing with whatever project fee happened to clear most recently. A founder who waits until after the first hire to build this structure usually ends up retrofitting it under more pressure than building it fresh would have taken.

Estimate what share of next year's revenue will be retainer versus project work, since that ratio drives how much of your cash position is predictable. Check whether your compensation study work involves handling sensitive client payroll data that deserves its own careful account tracking. And confirm with your bookkeeper which platform's export format they already use, since that familiarity saves real time over a full year of monthly closes.

Before you open an account, check these points:

• Estimate what share of next year's revenue will be retainer versus project work, because that ratio determines how predictable your cash position is.
• Confirm whether compensation study work involves sensitive client payroll data that deserves its own carefully controlled account structure.
• Decide how project fees and retainer income will stay separate, before a large project payment lands in the same month as several retainers.
• Match the bank to how you track engagements, weighing API access for practice management software against QuickBooks or Xero integration for spreadsheet tracking.