Should you invoice in advance or in arrears for the support you provide?
Do you invoice in advance or arrears when working with clients? It’s a question many Virtual Assistants have, especially when they’re just starting out. But the answer isn’t as simple as giving a yes or no response.
You need to consider several things before you decide on the best invoicing system for you and your clients. You’ll have your personal preferences, but ultimately, the answer depends on how you’re packaging up your time and services.
It depends on how you’re working with that client
The way you work with your clients will broadly fall into three different camps – retainer, billing per hour or charging a set package price. I’d recommend VAs have a combination of all three for their business. (There are other pricing methods but these are the most common!)
Each one of these will be invoiced differently. Retainers, package pricing and day rates, for example, are usually all invoiced in advance.
However, when it comes to billing per hour, you’re limited to invoicing after you’ve worked the hours. This is a good option if you’re working on a project that’s difficult to assess the time needed before beginning the work. You may also find yourself needing to charge an hourly rate for those clients that go over on their retainer hours – just make sure you set these at the hourly retainer rate.
It’s not unusual to invoice in advance
It’s also important to remind yourself that invoicing in advance is not unusual. Though, the idea of it can bring up your fears and worries around charging your worth and invoicing clients, etc. You may worry the client will think it’s cheeky to ask for money upfront. You may have a fear of them haggling and questioning time spent if you invoice for hours worked.
The critical point to remember is that any work carried out before payment is made will carry a tiny element of risk. If the client questions your hours or the end bill, they may refuse to pay you for the work completed.
Retainers are a great way forward
Retainers are an excellent solution for those fears and worries. You both know where you’re at, as the price is already set and paid upfront. You can allocate your time; they have a fixed price to budget for and set aside each month to pay you.
You also know how much you’re getting paid each month. Retainers enable you to accurately forecast your income projection. If a client goes under those hours, they still pay you the same – you simply carry the remaining hours over to the next month should that be a term and condition in your contract.
Retainers are also invoiced in advance (generally at the beginning of the month). You can monitor the time used and, as clients get close to their hours, you can let them know and check how they want to proceed. You can then decide if you want them to pay for additional hours in advance or arrears.
Naturally, you may have been wondering whether to invoice in advance or arrears for the support you provide. However, the answer depends on how you’re pricing your services. As seen above, retainers are the best way forward, as they give you both stability and predictability.
If you’ve been wondering how to make those payments, check out: Virtual Assistant payment options: how to get paid! But no matter how you take payment, look to automate your onboarding process. It will help minimise the risk of anything being forgotten and enables you to set up an automated payment method right from the outset.
Pricing and how to get paid doesn’t have to be confusing or stressful; across our training courses we have training webinars and resources designed to help you set your pricing and how to invoice your clients. In particular, as part of the VA Membership we have a whole module designed to get you thinking about your pricing methods including how to increase your pricing.
The VA Membership is the only UK VA business accelerator that’s designed specifically to help you build and grow your VA business, to help you create recurring revenue and consistent growth through regular and consistent action. With over 100+ hours of courses, weekly co-working sessions, weekly group coaching calls, a private support group and the ability to pay as you go – when you’re ready to grow or scale your business online come and join us in the VA Membership.
The VA Membership has the option to upgrade to more one to one coaching and mentoring support – this is perfect if you are looking to really scale your business. If you would like to see / learn more about our one to one coaching and mentoring then you need to check out the new One to One Mentoring page.