I'm brand new to this business & planning my rates/billing structure, so get ready for a really naive question. It's been eye-opening to read all the wonderful advice in this forum, but I'm confused about the difference between billing hourly and pay as you go. I'd really appreciate clarification of the two and opinions on which situations each would be best utilized.

Thanks in advance,
Teri

It seems to me that billing hourly and pay as you go are the same thing?!?

I offer a combination of hourly (billed in 15 minute increments) and pre-paid blocks of time (5, 10, 15 hours at a 5% discount).

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

One has to with billing, the other with payment.

Billing hourly is just that. Charge an hourly rate for an hour's worth of work. Beyond that is billing within that hour in 15 minute increments, every 6 minutes, or by the minute or whatever you choose to do.

Pay-as-you-go is how someone is paid. Work a week, bill for that week, get paid for that week (or whatever time frame you and your client have chosen).

Some VAs work on retainer, which is a pay up-front for a set amount of dollars for a specified amount of time worked. Then you draw from that money as you complete the work.

Hope that helps.

Janine

__________________
WRITE FAB RFP PROPOSALS & land THE VA job. WinningRFP unveils soon! SignUp www.WinningRFP.com

Janine & Lily-
You all are awesome with your quick answers. I knew there would be a simple explanation. Thanks!

Janine - thanks for the explanation. I KNEW I was missing something!

I bill monthly on the 1st, due no later than the 15th; then I start charging interest (which is built into my contract so they can't argue). No late payments from anyone so far.

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

Does anyone have any recommendations for the minimum number of hours to require for retainer fees? I was thinking about 5, but I am not sure if that is asking to much or if it may be to low. Any suggestions would greatly be appreciated.

__________________
Lynn's VA Biz
www.lynnsvabiz.com

I require a minimum of 5 'cuz less than that is not worth my time...

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

From what I have read through my research, the norm is a minimum of 10 hours per months when you're working with a retainer plan, that is the client signs a contract that stipulates that he/she will pay up front the agreed amount. If the client requires more time than what was agreed upon, then your hourly rate comes in and you can bill that whenever you determine in your contract. You need to keep track of the hours you work for each client.

You can determine what your hours for retainers are going to be, but you'll find that maybe 5 hour per month is not enough to really make an impact on the client's needs.

The other increments of time you can use is 20 hours per month, 30 hours per month, etc. As an incentive for the client to retain you for more time, you may want to consider offering a discounted rate the more hours they sign up with.

The unused hours don't rollover to the following month, and this too you need to spell out in your contract.

There's always the one-time project rate for which you can charge your full fee per hour.

If I remember correctly there is a thread in this forum that addresses this question, you may want to look.

Good luck and best wishes.

__________________
Rosa Jones
Jones Executive Management Support

Thanks everyone for all of your thoughts. This is a big help.

I did look for this information in the forum before I posted. I must have over looked it.

Thanks again!

__________________
Lynn's VA Biz
www.lynnsvabiz.com

This information is very helpful! I am glad someone had already asked the question!

__________________
Wendy
www.virtualbusinessassociate.com