Virtual Assistant Forums | Work from Home

My Office Zilla · #1 (**permalink**) 07-10-2008

I had a client pay me for 5 hours and plan to just draw against it. Great, no problem! I did some work for him and carried the hours for probably 45 days and now I'm doing a little more for him.

During a phone conversation with my DH he mentioned he thought I should set a deadline for use...like they do with gift certificates. My point back was I can see that; however, I think a customer who purchases a $2K certificate would get treated differently than one who purchase a $20 certificate. So, how do you create a correlation between the amount purchased and the deadline? Silence, of course. He has a knack for bringing up points for which he has no solution.

So, my question is, "Do your deposit hours have an expiration date?" If so, is it the same no matter how much the deposit is or does the date range vary based on the number of hours prepaid?

Is there anything else I should be thinking about for this unique (to me) client?

Make it a great day!

PS...maybe this would be better placed under client relations - I just couldn't decide!

AwesomeAssistant · #2 (**permalink**) 07-10-2008

Sundi,

This sounds to me like a retainer client. I usually have retainer clients sign a contract stating they will use XX hours per month and that unused hours do not roll over. So if they aren't used up in the month they were purchased, oh well; they have to purchase another block of hours the next month.

On the other hand, I can't say I'm a stickler about that. I usually do end up allowing clients to use the hours as we go and then bill them as we run out. This does make me consider putting in place some sort of policy about this.

My husband and I found that with our web design company we'd get a deposit from a client and then they would take forever getting changes to us so that it could drag on and on and we weren't getting the balance paid us at no fault of our own. We now have a 60-day window where a client needs to get us everything we requested. The contract states that at the end of 60 days we can bill for the balance. That way the client is motivated to get the work done in a timely manner. We just had to enforce this policy and it did get things moving.

So maybe we should consider stating the hours needs to be used within 60 days. I'm pondering...

Tess · #3 (**permalink**) 07-10-2008

It does sound like a retainer client of sorts, which, if I understand correctly, would generally mean 'hours do not roll over' each month...standard retainer clause.

We take deposits but not in the same way - each new client pays against six months of regularly paid invoices...as a way to build credit and of course as a bit of insurance for us as virtual freelancers. We refund the deposit to the client via their invoices that come up at the time. In the meantime, I deposit the funds and treat it as income.

I haven't ever taken a deposit against work to be done with the idea that the client could kind of 'dip in' whenever they feel like it. It seems like you could get stuck in a number of ways there - what if he doesn't use the hours for a year and you want to raise your rates? Etc.

Sue - as to websites - I absolutely know what you mean about clients dragging to get you the deliverables you need! We solve that issue by invoicing for a deposit which has to be paid before we'll start - and now, I don't even start on a project until I have everything I've asked for. The balance in invoiced as soon as the site launches. We bill straight hourly for just about everything, and never in advance - deposits are (for us) a way to allow a client hold space in our design/programming schedule, initiate a working relationship, build credit, etc. or all of these at once.

AwesomeAssistant · #4 (**permalink**) 07-10-2008

Tess,

Regarding websites, yes we require a 40% deposit up front, another 40% once the rough draft is approved. That leaves only 20% due while the client goes back and forth deciding what they want.

Modern Marketing Support · #5 (**permalink**) 07-10-2008

Originally Posted by Sundi

I had a client pay me for 5 hours and plan to just draw against it. Great, no problem! I did some work for him and carried the hours for probably 45 days and now I'm doing a little more for him.

During a phone conversation with my DH he mentioned he thought I should set a deadline for use...like they do with gift certificates. My point back was I can see that; however, I think a customer who purchases a $2K certificate would get treated differently than one who purchase a $20 certificate. So, how do you create a correlation between the amount purchased and the deadline? Silence, of course. He has a knack for bringing up points for which he has no solution.

So, my question is, "Do your deposit hours have an expiration date?" If so, is it the same no matter how much the deposit is or does the date range vary based on the number of hours prepaid?

Is there anything else I should be thinking about for this unique (to me) client?

Make it a great day!

PS...maybe this would be better placed under client relations - I just couldn't decide!

I have one client who purchases blocks of time. (he's the first client I ever had) I found it easier than just working hourly for him because his needs were sporadic. At the time, I encouraged him to buy blocks of time and he pays upfront. The hours don't expire though. They're gone when they're gone. He bought a block of hours in April and we're still working on them. (only 2 more hours left!) For this particular client, it works great. But, with my other clients, it wouldn't work as well. They have different needs.

I consider blocks of time to be different than a retainer because they don't expire. A retainer is meant to be paid each month in order to retain my services for that month. It ensures that my time is available for the client. If a client is going to purchase a set number of hours EVERY month then they get a discount on my hourly rate. I don't put clients on retainer unless we know for sure how many hours they'll need each month.

deannatroupe · #6 (**permalink**) 07-10-2008

Shari,
Just so I understand, you have people that either purchase a block of hours or get put on a retainer?
Do you charge the people that purchase the block of hours the same thing as a retainer client?

My Office Zilla · #7 (**permalink**) 07-11-2008

I don't treat him like a retainer client as he does not get extra consideration for turn around...my retainer clients get top priority. Also, I charged him the full hourly rate - not my retainer discounted rate. AND, he purchased with the understanding that he could draw on the hours as needed. Basically he doesn't use me that much, just to produce proposals in a certain format and didn't want to be paying me an hour to an hour and a half here and there.

I guess the specific question I'd like everyone's opinion on would be do you think the hours should expire say after 6 months or they should be good as long as a client wants them for this type of work (as appossed to project work)?

Of the 5 he paid for he has now used almost 2 and a half in 45 days so it isn't like I've been carrying them over for months. I'm wondering about the future clients who ask for the same type of service and if I should make changes in my contract.

Make it a great day!

AwesomeAssistant · #8 (**permalink**) 07-11-2008

Sounds like you've already got an agreement with him and you can't change it at this point. His hours shouldn't expire. For future clients of this type, I'd change the contract to state the hours expire with 90, 120 or however many days.

Modern Marketing Support · #9 (**permalink**) 07-11-2008

Originally Posted by deannatroupe

Shari,
Just so I understand, you have people that either purchase a block of hours or get put on a retainer?
Do you charge the people that purchase the block of hours the same thing as a retainer client?

I only have this one client that purchases in blocks of time. He's my first client and he has a low rate. His rate is much lower than my new clients and I don't know if I'd take on anymore block clients. It's not really my favorite way of doing things.

A block purchase is good for someone who only needs a few minutes at a time to get a project done and then doesn't need anything else for awhile. Billing someone for a job that takes 10 minutes or less every few weeks gets too bothersome so that's why I offered a block purchase.

My retainer clients get a discounted rate off my regular hourly rate because they reserve my time each month. Since a block client doesn't technically reserve my time each month I don't know that offering them a reduced rate would be a good idea for many reasons.

HTH