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Charge by hour

How does this charge by hour thing work for freelancers and consultants? Suppose, as a consultant I tell the client that I charge $75 per hour. How would the client be able to check how much time actually goes in the task and if I'm not overcharging them ... u know? I can work on the project for just 3 hours but bill them the next day for 6 hours of work.

Ruth
Monday, September 08, 2003

If your three hours was worth six, in their estimation, then you'd likely get away with that but done consistently you'll get found out.

For the times when I have to bill hourly then there's a minimum billable which is half a day.  Also time spent actively doing isn't just the only time you spend on working.  You also have to bill thinking time somehow.

I largely bill fixed price even for small jobs and all of that is factored in.

Simon Lucy
Monday, September 08, 2003

charging by the hour works mostly for onsite,

Prakash S
Monday, September 08, 2003

I usually send the client a timesheet, something like:

09:00-10:00 Worked on the algorithm for task X, and finished it.

10:00-10:30 Wrote the interface of control C. Also wrote the constructor and destructor, and a rough first implementation of the paint method.

So, the client knows exactly where the time went, and I bill according to the timesheet.

Most of the time I give some work for free - for example, if it is an 100 hour project, I show the client the full timesheet for 100 hours, but then only bill 94 hours, and tell the client that I offer them 6 hours of work for free.

I strive to perform better than the clients expect, and to charge a little less than clients expect, and it's generally ok.

John K.
Monday, September 08, 2003

Hm.
Clients are not as dumb as you think they are! ;)

If you overcharge on some ocassion, they might not notice but keep doing that and you are going to loose a valuable client + get bad mouth in return.

I have worked on hour basis for good amount of time, and I always logged my effort correctly. Client really appreciated it and I got good referrals.

Honesty is the best Policy! :)
JD
http://jdk.phpkid.org

JD
Monday, September 08, 2003

The prior posts were "on the money." You can get away with lying.  Whether you are on or off site the bigger issue is what you produce.  I know an off-site developer who will respond 24x7.  Call her and she will do anything for you.  I have also seen on-site developers spend 6 hours a day doing "research" on the internet. 

The biggest factor as you break the $60/hour mark is value add.  While we (contractors & consultants) like to talk about paying our own expenses, in the end the client looks at the bill and compares you to their employees.  If you are not a better deal, you are on the short list to the door. 

Mike Gamerland
Monday, September 08, 2003

Be as expensive as you can. If you are cheap, your client first will think he has taken advantage of you, but then will believe you're a complete idiot, which renders your work useless. If you are in the middle, your client will suspect your work is on average, whereas he expected you to work above average. But if you are expensive, the client will believe he got some genius working for him, even if the code looks silly. "There's more to this code than meets the eye."

Johnny Bravo
Monday, September 08, 2003

A lot of my projects are fixed-cost, but for those that pay by the hour, there's no point in trying to bill more hours than you've actually worked.

In the long term, it is bound to work out bad, one way or the other.

I always round to the nearest 15 minutes, but I have known contractors who divide their hourly rate by sixty, then bill by the minute. This seems a bit silly and I suspect most clients would think it ridiculous to receive an invoice for 4 hours, 37 minutes.

Steve Jones (UK)
Monday, September 08, 2003

Especially in this market, I would go for underbilling.

If you or or skills are all that, you can get away with charging the client for prep time, for travel, for reading their emails etc.

More likely it makes sense to show the client that you have put in more than you are charging them. Show them the prep time if you must, but bill them fair, and they will not only keep you for as long as possible, but will refer you to other customers.

Charge them silly for for stupid things, and you will be the first one they let go, with no referrals of course.

Tapiwa
Monday, September 08, 2003

To the original poster, it works on trust and results, and managing that is part of being a consultant. As others have pointed out, an essential part of that is providing some sort of work summary so they, and their managers too, can see what you're doing for the day or week.

I always charged by the day or week and never had any serious complaints.

It is important that you defend your right to be paid.


Monday, September 08, 2003

I'm told lawyers charge by the hour, but I don't know anybody who takes it seriously. As a client I look at the work done, reckon how long it would have taken, and then work out what seems to be a fair cost.

On every occasion but one my estimation has worked out the same as the lawyers bill, and I'm talking three different lawyers in two different countries.

Stephen Jones
Monday, September 08, 2003

There are lawyers whose business is examining and disputing billing by big law firms.


Monday, September 08, 2003

My lawyer bills by the hour, and gives me itemized invoices.

It truly sucks seeing charges like "SENT FAX: $47.50"

rz
Monday, September 08, 2003

Worse is when you query the bill, and they send you a gormless reply with an invoice for $47.50 for replying to you.

If you've hired a lawyer like that you've probably only got yourself to blame, but the worst is when you get the bills from the lawyer of the guy who's suing you!

Stephen Jones
Monday, September 08, 2003

My wife works for a law firm so snooty, they refuse to itemize.  They just send you a bill for the full dollar amount, no description.  Their clients seem to think it is so important to have a top rated law firm, they grin and bare it.  I'm sure that one of these days they are going to completely undermine their reputation, and the firm will decend into chaos.  I honestly doubt they overbill or anything so directly sinister, but they aren't so well managed that you aren't often paying $150+ an hour for some recent Harvard or Columbia law grad to stay up all night sorting through piles of paper and stack them by some useless set of categories.  Meanwhile the government (for once outpacing the private sector) has learned to scan in every last document in a case and google the damn thing when they are looking for something. (But then congress finds a way to make the government settle the case on far better terms than the government's opponent deserves, and I'm not referring only to DOJ vs. MS)

Keith Wright
Monday, September 08, 2003

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