Hello All,

Just wondering if somebody can offer some advice regarding what to do if the client doesn't use up all the hours that they have paid for on a monthly retainer? Do you roll them onto the next month? What about a refund policy? Just wondering what others do - what is to stop somebody booking and paying for, say, 20 hours at your current rate, and then not using them until later on when your rates have gone up? From a cash flow perspective I wouldn't want this money just sitting in my account in case I have to pay it back later on.

Any advice on getting a policy together? Anything I haven't considered?

Thanks,
Angela

You will find a lot of different opinions on this, and ultimately you will have to do what's best for you and your business.

For me, I do not roll over unused hours at all. The way I see it, my clients pay to reserve those hours for me to be available and it's up to them to use them. It can be likened to a gym membership: you pay to reserve your spot and it's up to you to use what's made available to you.

Now, having said that, I make sure that during our weekly calls I remind my clients of the hours they have left and together we come up with a plan on how to use those hours.

I agree with Carol, clients are "reserving your time" for that month, time that would be used for other clients if it wasn't set aside for the client who paid for it. Also if you let them roll their hours over there should be a limit on both the number of hours that can be rolled over per month as well as how many months those hours can be carried for. You don't want to be in a position where your schedule is full and have a client come to you with the expectation that you will work 40 hours for them because it is their busy season and they have been carrying hours over every month.
Just some things to think about, if special circumstances arise there can be exceptions.

Thank you Carol and Sharon for the quick response. You have given me some food for thought and brought up somethings I hadn't thought of before.

Cheers
Angela

Hello Angela,

I am just now in the process of setting up my company. I have researched this subject on here quite a bit and have come to the conclusion that I will not roll over any unused time. You are reserving time to work on their projects and if they do not use the time and it carries over then this is less time you have for other clients the next month. Not to mention tracking the time that is being carried over to the next month, etc.

I am going to have this written into my terms and conditions so that there isn't any misunderstanding. I agree with Carol that during your weekly meeting with your client that you should let them know the amount of time remaining. If you see that there is a chance that they are going to have some unused hours be prepared to throw some ideas out there in order to take things off their plate in order to use up some of their remaining time. You may also need to let them know that they are about to go over their allotted hours and see if they want to purchase additional retainer hours at your reduced cost.

Take care!

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Amy
TAG Virtual Office, LLC

Angela,

I agree with the posts here. I do not roll over unused monthly retainer hours because I am available during that month for that client so I need to be compensated for that time AND, in all honesty, the accounting of that might become a job unto itself.

The only suggestion I have is to make sure that this is very clear in your contract and if you wish, place that on your site under 'rates' or 'terms and conditions'.

I like to have it in two places so the terms are clear from the start.

Some VAs roll over the hours but whatever you decide it should be in the contract and perhaps some place else for good measure.

Janine
Have you joined the blog challenge group? See this month's blog challenge question due by January 31st. (plug)

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Hi,

I don't make it a policy to roll over hours, but it also depends on my relationship with the client and sometimes I will bend the rules (when it works for me) to accommodate certain tasks or projects that maybe on the horizon.

Renee

I agree with Amy. It is a good idea to let your clients know if they are getting close to going over their hours to see if they want to stop working or pay for more time.

However, for me, I do not discount my rates either - ever. The value I bring to my clients doesn't diminish because they want more hours. And, in my mind, discounting my rates puts the emphasis on hours, not value. So, what I do, is add "bonuses" in the way of more services offered for more hours they use.

For example, if you look on my success plans page, I have three retainer packages available. My hourly rate stays the same for each, but the number of services I offer and my availability increases.

I also do not roll-over or return retainer hours. Generally a client is receiving a VA's services at a discounted rate while on a monthly retainer. By paying a retainer a client is reserving your time for a minimum number of hours each month. If your hours are reserved for a particular client each month, (whether you actually worked these hours or not) this restricts the number of hours remaining in the month that you can draw on to service new clients. In other words, you are losing money which could have been billed to another client, if you return or roll-over unused hours.

Additionally, you should be contacting a retainer client towards the end of every month to advise them on the status of their service hours. This allows them the opportunity to pull back on their projects if they are approaching the limits of their retainer, or increase their work load if they have an excess of time remaining.

Another avenue you could take is to bill strictly on an hourly rate (no retainers), but discount a clients bill based on the number of hours billed each month. For example, if a client billed 10-15 hours that month they would receive a 10% discount, 16-20 hours receives a 15% discount, 21-35 hours receives a 20% discount. This method, however, does not generate a consistent monthly income to your business and it makes scheduling your time a bit more difficult.

Ultimately it is your decision. This is a personal preference issue and you need to be comfortable with your business model.

Hope this helps.

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Julie | Virtual Resource Services, Inc (VRSI)
http://www.vrsioffice.com

Thank you again for your valuable input. Julie, a great suggestion about no retainer but discounts based on the numbers of hours billed each month. Something I will definately be considering.

Cheers,
Angela