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Monday, April 10, 2006

IT Service and Prepaid Time Block Management

A prepaid time block is not the same thing as an IT service agreement. The agreement will give specific details about things you will accomplish for a client such as maintenance, upgrades and others, whereas the prepaid time block is nothing more than time. One example of this is a customer that knows your normal hourly rate is $100 per hour, and that in return for prepaying for 20 hours, they will get a $10 per hour discount.


You might want to have an agreement about having a single contact person, software licensing and confidentiality agreements. In general, all you will have to say is what you normally charge, and in return for the customer paying a certain amount for a specific number of hours, he will get a certain discount. Then all you have to do is put the accounting in place and when the time comes create a renewal notice once clients are close to using up the time for which they paid.

The advantage in IT service to prepaid time blocks is that the cash flow comes upfront, and you don’t have to get stuck waiting for payment at the end of the job. The problem with this type of set-up is that it is not necessarily recurring; you are selling a fixed price that has a definite beginning and end rather than a contract that offers long-term potential.


No matter what, you need to set clients up on a regimented program that keeps you in touch with them regularly and abreast of their security needs. You need to make sure their backup is running correctly and that you are keeping track of small things that might need fixing.

You can’t allow the prepaid time block to push you into a one-shot deal with IT service for companies. You want to try to set things up with clients in a way that will foster long-term relationships.

Added By: Computer Consulting 101 Professional Kit