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I'm writing a proposal to do some recurring work for a client. I'll be selling them services, packaged into a unit, and they may need none, or several of these units in any given month.

The question is: how should I charge for these units, given that the amount I'll sell to the client each month is variable?

Ideas I can think of (some better than others):

  • simply bill up-front at order time for each unit (or 50%, or etc.), which could result in an invoice per week if things heat up - lots of paperwork
  • charge a fixed retainer, then charge the balance at the end of the month (or refund the retainer), which balances risk somewhat and ensures I get at least a little bit of pay no matter what
  • bill at the end of the month, assuming all risk myself

What's a common way to handle this pattern? Are there others I haven't thought of?

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Without you providing more details I would say the most common way is to bill at the end of a period (month,week etc.)

Exceptions:

  • If you have considerable external costs.

  • The customer or the market often has problems with unpaid bills.

(encountered the latter with call centers, where the network providers used to offer prepaid contracts due to a high number of bankruptcies in the market)

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