I was wondering how most of you handle billing for hourly work?

Do you:

a) estimate hours worked and bill a percentage (for a deposit) prior to starting the work, and then bill the balance upon completion?

b) charge a standard deposit fee for all work? (exceptions being short assignments)

c) bill only after work has been completed?

Thanks for your input!
Natalie

I would do it a few different ways dependent on the situation...

Hourly client - I would ask for deposit prior to any work, once that deposit is used ask for another deposit and go on like that....

Retainer client - Pre-Pay at the beginning of the month for the set numbers hours each month. I have one small 5 hour client, and the remaining clients are 10 or 15 hours.

Small assignments would still pay at least a 50% deposit and then the remaining balance upon completion.

My 2 cents.

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Renee Shupe, Redhead Business Solutions & Ripple Action Marketing
Business Planning Workshop only $47 starts Feb 12th.

Hello,

I ask for one month's deposit for retainer clients in addition to the pre-paid retainer payment. I hold the deposits until the end of the contract term and apply that to the last month. I've tried using the deposit toward ongoing work but that becomes 'nightmare-ish accounting' for me. I have a 30-day notification of the termination of a contract so this has worked out well and then I just apply that deposit to the last month's work.

For hourly clients, which I have not had lately, I required a minimum of two hours per week so the hourly deposit is 8 hours minimum. Again, I require 30 day's notice so the deposit is applied to that last month.

I haven't done any small assignments lately because I rarely do any project work but when I have I ask for two hours deposit because even with project work I still have a two hour minimum.

Janine

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Thank you both for taking the time to reply.

Renee, do most of your clients prefer the retainer option?

Janine, I really like your idea for a 2 hour/week minimum.

There is to much risk in waiting until after billing to get paid. I waited a couple months for my first check. It was not a lot of money but I just thought if I was waiting for that money to pay all my bills- I would have been stressed. Retainer/Deposit also shows their level of commitment as a client.

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Thanks for your reply Alana. You're right, a deposit is the way to go.

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Natalie Butler
Little Miss Manage It - Virtual Business Solutions

Thank you everyone for this information. This is helping me untangle what I do. Up until now (I hate to admit this) I kinda had a different arrangement with every client. sigh.

Janine,

Quote:

I ask for one month's deposit for retainer clients in addition to the pre-paid retainer payment. I hold the deposits until the end of the contract term and apply that to the last month. I've tried using the deposit toward ongoing work but that becomes 'nightmare-ish accounting' for me. I have a 30-day notification of the termination of a contract so this has worked out well and then I just apply that deposit to the last month's work. For hourly clients, which I have not had lately, I required a minimum of two hours per week so the hourly deposit is 8 hours minimum. Again, I require 30 day's notice so the deposit is applied to that last month.

I LOVE your policy. I'm writing it into my Welcome packet now. It's easy to understand and implement. Thank you very much.

Julia