I'm still a little confused by all of this.

I understand billing by the hour - that seems to be what most small or project type jobs use. For example, if I'm setting up a website or developing a power point presentation there would be an estimate of time up front but it would be charged by the hour of how long it actually took. Is this how other people do it?

But my big question is about this retainer thing and project clients. I've heard other VA's on here mention their retainer and project clients. I'm wondering, is a project client similar to what I described above (where you give a quote up front but still bill by the hour)?

As for a retainer client, the most I've been able to glean is that some clients buy a batch of hours per month and then... what? Do they just tell you what they need and so long as it fits within the retained hours, it gets done? Do you still give a quote? What if someone wants to hire you to do something (say write X blog posts per month) on an ongoing basis? Would this be a retainer client who is charged monthly?

I'm just trying to figure out all the different ways to bill a client.

Project clients are usually people that have only 1 job for you to do. Some of them will contact you occasionally for other projects but again it is usually 1 thing (or a batch of things all to be completed together). You may actually never hear from this client again. But if you do great service then when they have the odd thing they can't handle, you will be at the top of their list.

A retainer client is usually someone who wants to make sure you're available for them, or it could be a project client who has a really big project that they need done and they aren't sure how much work is needed, how long it will take or if it will even go through.

A retainer is really a down-payment or pre-payment to make sure the client has your time booked. If it's a retainer client then they pay X amount of $ to have you work for Y amount of hours (could be over a week, month or year).

A project client that has a retainer is; someone who makes a partial payment or down-payment on the project. It could be 1/4 to 1/2 of the estimate you give them. This usually happens if it's a big project that will take lots of your time. You may have to push back your other clients work in order to get this done and you need some kind of guarantee that when you hand over the work you get paid. Sometimes you may work on the big project and with a week left they call you and cancel it. You've just wasted all that time for nothing. With the retainer you at least are 100% sure of some money for your time. When you go to bill them figure out how much they owe you al together then take off any retainer they have already paid.

Same with a 'retainer client'. They book say... 5 hours of your time a month. You work on their stuff for 5 hours during the month. If you go over that time by 15 minutes or so, it's your choice to charge them more. Usually I will contact the client if it goes over a half hour and ask if I should charge them or count it towards their time next month. If it continually goes overtime every time then tell them and either scale back the work you do or, charge them more and increase the time they have booked.

Kim.

Tina,

With a retainer agreement, you guarantee that same amount of time reserved for them each month. It allows you to plan and organize your work more effectively knowing you have a set amount of hours for each client each month. The client is assured that you will have the availability each month for their work. The work itself may be specific items or vary.
The project work or pay as you go is for clients that aren't in need of regular minimum hours to be set up on retainer. The work and hours may vary considerably one month to the next. The down side from them not being on a retainer is if your practice gets filled up with retainer clients work it would become more difficult to schedule their project in.

If a retainer client goes over their hours say for April, When you bill them May's retainer you add the overage from April onto that. You may want to keep them informed as to how many hours they have utilized from time to time. If they consistently are going over each month, you may want to suggest raising the retainer hours, again this guarantees them that you will have the time scheduled for their work.

Linda

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Linda Faust
www.lmfva.com

Linda, Kim,

Thank you both for your responses. I think I'm getting a general idea of how this works now. Thanks.

I've always just had project or one-off clients, although I can see how having a retainer would have been a great way to find out that one of my previous clients wasn't planning on paying me and I didn't invoice until half-way through the project time frame (another story all together).

I'll have to mull over retainers a little more but this is a great help. Thanks again.

Tina,

For retainer clients bill them for the next month at end of the current month and make it a policy to not perform any services until payment has been received. For project work, ask for 50% of estimate prior to starting work and the balance when you have finished before releasing the work.

Just a couple of suggestions for getting paid and not taken!

Linda

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Linda Faust
www.lmfva.com

If one waits to receive payment before work is begun, what happens if I receive the payment but it doesn't clear the bank. Do I give the completed work to the client or do i hold onto the work and/or stop working on the project until the situation is dealt with?

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A L Camien
Manager Member

Hello,

I also wish to add that it is important to take a deposit for all types of clients....either 50% or 1-6 months in advance depending upon the work involved.

As for waiting for payment to clear...

I discourage the use of checks but I know other VAs take them. Whether being paid by check or electronically (PayPal), I work only when I am paid so I would suggest not working while you are waiting for a check to clear. What if it doesn't clear?

You might want to collect a larger deposit ahead of time to 'cover' the lag time in between check clearing.

Janine

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Hello,

I agree with Janine regarding waiting for the check to clear. In a perfect world we wouldn't need to be so concerned about this.

You can also call the bank that the check was written on and ask if that account has sufficient funds to clear the amount it has been written for. No guarantee when the check finally does get there that the funds will be there but if there isn't enough funds to cover the check when you receive it, you know to hold off doing any work until it does clear the bank.

If you have a client that has written a bad check in the past, you may want to have a conversation about how you want this handled going forward.

Linda

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Linda Faust
www.lmfva.com

So it's not unusual for a retainer client, for instance, to pay quite a hefty deposit? I can understand a 50% deposit, minimum, on one-time projects; but I hadn't given any thought to expecting substantial deposits from retainer clients. I would suppose that ensures a relatively secure working relationship? How should refunds on these deposits be handled, if the relationship doesn't work out?

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A L Camien
Manager Member

I would have loved to see the answers re how should refunds... -- I would say it would depend upon WHY the relationship did not work out... but just to deduct amount owed and pay them the balance -- any fees/charges should be covered in your contract.

ALSO -- what are ways you are paid - how do they get the $$ to you --I am thinking of introducing a new way since I am on the road now - Bank of America lets you transfer funds from other accounts... looking into that as another alternative.

What about feedback re PAYPAL? I have set up account but never used.

Comment re DEPOSIT -- necessary to protect but often wonder what is going through mind of potential client who has never had VA before - hard for them to trust too