Rates and Billing

Discuss setting rates and find billing resources and information.

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Old 06-23-2012
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Default Block Rates versus Retainer Rates
I have been convinced that block rate is the way to go; however, I have myself confused as to why a PC should go with block rates rather than retainer rates. I guess the problem is I don't see the difference between the two.

What think you?
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Old 06-23-2012
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Default Re: Block Rates versus Retainer Rates
Block rate - payment when job completed?
Retainer rate - payment in advance?

Oh, I don't know, I'm just guessing. Anyone know?
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Old 06-24-2012
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Default Re: Block Rates versus Retainer Rates
Block rate is where you charge by units and usually the model is that you would charge less the more blocks purchased. For instance - Block of 10 hours @ $500.00 (therefore $50/hour)..Block of 15 hours @ $700.00 (therefore $46.66/hour)...and so on.

Alicia would be correct in the fact that a retainer is payment in advance...but honestly - and others may do it differently - but I have not seen where people use the block rate model and not use it in conjunction with it being a retainer agreement. Not that people don't charge after the fact - but personally I sure wouldn't. Too much risk.
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Old 06-24-2012
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Default Re: Block Rates versus Retainer Rates
I've never used block rates. I only have two clients on retainer rates and that's only occurred in the past 18 months. Most of my clients are on a $$ per hour rate and get invoiced at the end of the month for the work that's been done. In the past I've done work for not-for-profits where I would be on an annual contract with a set monthly payment - a bit like a retainer.
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Old 06-24-2012
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Default Re: Block Rates versus Retainer Rates
I'm still trying to figure out if it is better to get full payment up front, after job completion, require a deposit, or partial payment in advance.

My concerns:

Full payment up front - May not want to pay before work is completed
After job completion - I may not get paid
Require a deposit - Some corporate companies may not want to pay a deposit
Partial payment in advance - Some corporate companies may not want to do partial payments

Right now I explained how I would like payments to work but I also want to work with the clients so I added "Unless other arrangements are made in writing." Hopefully this will cover anyone who is not willing to or can't follow my policies.
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Old 06-24-2012
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Default Re: Block Rates versus Retainer Rates
Alicia, if you have a working relationship with clients already it's much easier than starting afresh. But, of course, you have to start somewhere. When I began in 1994 there were no such things as retainers, contracts for Virtual Assistants or the Internet, so I just did what I could and I would bill clients on completion of jobs with payment cob or nett 7 days. I still pretty much do that. I only get a deposit if it's a large job, i.e. if it's going to be over $3-400. This is what works for me. It might not be the same for other VAs. If you're getting work from a corporate client - good on you! But be aware they often don't pay for 60-90 days and you need to remind them that you're a small business, this is your 'pay' and that need to be paid by xxx. I've only ever done work for a corporate client maybe 3 times in the past 18 years. All of my clients have been small business owners and not-for-profit organisations (who pay me monthly regular as clockwork). Hope that helps.
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Old 06-25-2012
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Default Re: Block Rates versus Retainer Rates
Thanks for the info. I feel quite uncomfortable asking for a month up front as well as a deposit that I plan to bank until it's needed because of the amount involved. On the other hand, I want to get paid.
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Old 07-06-2012
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Default Re: Block Rates versus Retainer Rates
With regard to paying up front versus after. I take payments after my work is complete. I find that it allows my clients to feel at ease and know that I'll do the work. I think it's much more risky for a small business owner who is already going out on a limb by doing social media (part of my niche), to also then go further out on the limb and trust someone they have no relationship with. With all that being said, I do use a system that puts the payment in escrow and releases it upon completion of the project. So it's win-win, I don't get paid til I finish, but as long as I finish I get paid. It's not based on quality so they can't say, Oh you finished but I don't like it.

But I'm new to the "Virtual" game, so I may get burned???

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Old 07-06-2012
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Default Re: Block Rates versus Retainer Rates
Originally Posted by RavenDelana View Post

With all that being said, I do use a system that puts the payment in escrow and releases it upon completion of the project.

Raven
Would you mind explaining how your system works? Is it answering the need to get paid?
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Old 07-07-2012
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Default Re: Block Rates versus Retainer Rates
I think the fear of getting 'burned' holds a lot of people back. The majority of people out there are decent, honest people. Clients are just as easily concerned they'll get taken for a ride and lose money as a result. Start off small with clients, invoice them on completion and ask for immediate payment. At least, that's what I do. Once they have developed a payment history I put them on a monthly invoice and they have 7 days to pay. Mind you, many of my clients are referred by existing reliable clients, so I often don't feel I need to do that and often just invoice them as I do my regular clients. But once-offs is payment on delivery.
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Old 07-07-2012
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Default Re: Block Rates versus Retainer Rates
On suggestion might be to do some market research on other VA websites. Look at their payment/pricing/FAQ pages, and see when and how they bill clients. You might even shoot them an email and ask them what has and hasn't worked for them.

You've got a great resource here at this site, so start checking out your fellow members pages!

http://www.eolasofficesolutions.com/pricing.html
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Old 07-07-2012
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Default Re: Block Rates versus Retainer Rates
Thanks Eola, I know we're not supposed to discuss exact rates, but it certainly helps to see what others charge. I feel I can raise my rates more confidently knowing that it's well within a certain standard. I also worry that if I charge too little (not knowing better) clients will undervalue my expertise.

Raven
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Old 07-08-2012
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Default Re: Block Rates versus Retainer Rates
No problem! Keep researching your competition! You also want to consider things such as your particular local market, your experience, etc.

I checked out your website, by the way, and I really liked it! Nice and clean and easy to read. I signed up for your newsletter as well. Looking forward to getting it :-)
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