I'd love to know the how and why of those of you who work on retainers when it comes to unused hours.

If your client pays for 10 hours in a month and uses only 5, do you roll the hours over or not and why?

Thanks for letting me pick your brains! I have never offered a retainer option and this is my biggest sticking point so I am really grateful for your feedback/experience.

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I don't have any clients on retainer that haven't used their hours, thus far, so I haven't had to actually enforce it. No, I don't rollover. Mainly, I've allotted them that amount of time based on a combo of their needs, and my responsibilities and time commitments to other clients. If they were to suddenly need their rollover hours, it would have a significant impact on my time, and therefore my other clients. It's not so much you think they will... It's more a potential issue, and so I just want to snip that right out. I definitely have it clear in my contract that rollovers do not happen.

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Michele Wilcox
Vineyard Virtual Services

Nope, no rollover allowed! I encourage clients to start small - maybe 5 hours or 10 hours/month and, if after a couple of months it is obvious that they will be using more hours on a monthly basis, I ask them to up their retainer hours so I can plan my workload accordingly. I bill addt'l monthly hours at the same discounted hourly rate as the retainer. Clients save 10% off of my standard hourly rate if they pre-pay me for a block of time.

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

My thoughts exactly Lily. Thats the way I do it to.

Fiona

Thanks for the feedback - and can you clarify for me how you handle clients who go over their hours? Is the hourly rate less for the retainer hours and more for any overages, or? How does that work?

Thanks for taking the time to answer!

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For me, personally, I've only had a couple clients go over their hours. When they did, I billed them my usual hourly rate (also stipulated in the contract.) And when they did, it was only a little bit. Like Lily said - if it were an ongoing issue, they obviously need to retain for more hours to reflect their true needs. Also, as an aside, when we're getting close to their retained hours, I give them a head's up. I ask permission to go over and bill them. That way they don't get socked with an invoice they weren't expecting.

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Michele Wilcox
Vineyard Virtual Services

Hi

Great points! I too really encourage my clients not to roll-over. Because then the next month I've got more work. Also, one of the things I notice is then they end up getting lazy and not sending me the work (it's PR so it's easy to put on the back burner). I'm probably more flexible though because if they need to do it, I will without penalty. I know that's not the greatest policy and think you're probably better off not doing it that way, it's just the way I've been doing it.

When I sign up clients I try and get them for the most hours I can. I love the 30 hour retainers. That means I have less hours to fill. So I give a substantial break. I usually go down in prices ... like 1 - 8 hours is this amount, 8 - 20 is $5.00 less per hour / 20-30 $5.00 less and over $30 $5 less. So it does add up. Plus, they know that if they book me, I'll be available those hours.

I too like the idea here though of starting low and then added up as you work with them. I think for me if I have a client that doesn't want to go with the larger retainer, I'll try that. ... Why don't we start here and go up. That's a really good lead-in.

Hope this helps!

Diana Ennen / VirtualWordPublishing.com

I do roll over my hours. My policy is that if you buy the hours, you get the hours. However, I do tell clients that for the clients who consistently use their hours each month, they have priority over clients who may only use a few hours each month. This means that if a client buys 10 hours, they get 10 hours even if it takes them three months to use them but, they are informed that their projects are not priority if they choose to go that route. Their projects will be fit in with my other on-going tasks for clients who use all of their hours each month.

So far, all my clients have understood this policy and have been fine with it. They enjoy the flexibility of knowing they aren't shelling out a bunch of money and then wasting it in 30 days.

If a client goes over their hours in a 30 day period, I bill them at the retainer hourly rate.

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Kimberly
Facebook Marketing Magic!