How To Collect Money for Virtual Assistant Services
November 1, 2008 by Reba
Filed under Blog, Hot Topics, Virtual Assistant
Internet Business Model Series
Service Business / Charge by Hour or Project
When setting up the structure of a virtual assistant business, the owner must decide how he or she will collect the money earned for the services performed. There are several ways to set up the payment process and each individual virtual assistant will need to decide what is best for their business.
Traditional Invoicing/Net 30 Days – If the virtual assistant does a lot of work for larger corporate clients, she may find that her clients will only do business with her if she extends Net 30 Day terms. With this arrangement, the virtual assistant will issue an invoice at the specified time periods or at the end of a project, whatever is agreed to prior to starting the project.
Speaking from experience, large corporations normally do not pay invoices within the 30 terms, it’s normally at least 45-60 days before the check is cut plus time for it to arrive in the mail. Virtual assistants who extend Net 30 Day terms should be aware and prepared for the late payment, however, these large corporate client accounts can be quite lucrative and may be worth the trouble. Issuing a Purchase Order or signed contract/agreement prior to accepting the job will help with companies that cause collection problems.
Traditional Invoicing/Due Upon Receipt – Issuing the purchase order or having an agreement where the terms are Due Upon Receipt will help the virtual assistant to get paid much quicker. Just like Net 30 Day terms, the virtual assistant will send an invoice at specified times or at the end of the project and wait for the company to send a check.
Credit Card Payment – The virtual assistant can set-up a merchant account and collect payment from the client using a credit card. An invoice will usually still need to be given to the client, but payment can be processed immediately at specified times. The virtual assistant can keep the client’s credit card number on file and charge it as soon as a project is completed and the invoice is approved. Credit card payments can also be processed through PayPal without setting-up a merchant account.
Retainer – Many virtual assistants collect a retainer from their clients. Often a discount is given when the client agrees to a certain number of hours of work per month charged if it is used or not. Since the client has already paid, they will most likely use the time, however, this is a nice way for the VA to estimate how much he or she will work in a month because the client as already committed to a certain number of hours.
The virtual assistant who decides to use credit cards can set-up a secure page on their website to collect and process the credit card information. This will make it easy for the client to pay on their own, especially for those who use the retainer method. The VA should be sure the flow of the website leads the customer to sign (virtually or by scan or fax) a contract or agreement.
This is the last article in the Virtual Assistant Series – Pay By Hour or Project. You can view all the articles in this series by clicking on this link – Internet Business Models/Virtual Assistant.
Our next series will be about setting up a business on the internet selling your own informational product.
Until next time…
Ciao!
Reba
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Reba,
I use a combination of methods for my clients. I have some that are project based, some are billed hourly after the fact and some are pre-paid (retainer). I also accept checks and credit cards. I know each VA has to do what works best for him/her, and this is what has worked for me.
Sherra, you’re right, most VA’s will probably use a combination of the the methods above depending on the client they’re working for. I didn’t even mention that! Thanks for the comment.
It is best to have as many payment options available to your clients. Everyone has different prefereces as to how they would like to pay so it is best to try and satify everyone!
Wow good stuff, thanks for the good read.
this is hard way to collect money on net and we want an eazyer on
Yes, I think expanded payment options are key. You want to try and make every customer happy.
Sherra, you’re right, most VA’s will probably use a combination of the the methods above depending on the client they’re working for. I didn’t even mention that! Thanks for the comment.