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Hourly, Daily or Weekly billing?


(Jan Jones) #1

When doing client work do you guys bill hourly, daily or weekly?

If the answer is weekly then how do you deal with sick days, vacation days etc.

Cheers

Jan.


(Chad Pytel) #2

We pretty much only bill weekly.

We also only work 4 days a week on client work, reserving 1 day per week as investment day (open source, learning, new product development). This extra day provides a good amount of flexibility around sick days. If someone is sick one day, we still have the same billing that week for them.

If there is more than a one day absence, we either adjust billing in advance (if it’s anticipated) or otherwise adjust the invoice or issue a credit if it was unanticipated.

In that way, it is possible to be billed for a partial week, and so technically, it may be considered that we actually bill daily… but on a weekly basis, and our default unit is 4 days.

I hope thats all clear and helpful, please let me know if I can clarify further. Thanks!


(Jan Jones) #3

Many many thanks for the detailed response Chad :slight_smile:

Cheers

Jan.


(David Paquet) #4

Hi Chad, I also have a question in the same vein :

Do this mean you only bill for time and never by feature / project?


(Chad Pytel) #5

Yes, that is absolutely correct. Thanks.


(Brian Dear) #6

If I may, @davidpaquet, billing by the feature or product is a very dangerous thing. Your client will always have “one more thing” and the mission creep can be maddening. If you’re billing by time instead of feature, then the client will have a much bigger incentive to not keep moving the goalposts. I’m obviously love clients very much! But reality is that feature-based billing leads to your actual income being less than the same feature built with time-based payment, with pretty much the same outcome for the client, however much more time is wasted. Since software is subjective (like it or not,) it’s hard to call something “finished” if the client doesn’t agree. That is, of course the value of acceptance testing, but then again, “I like this but can you just do ____” means that features that should be “done” aren’t really done until the client finishes their back and forth over minute details that can really eat your time without you actually getting paid for it. If you’re billing by time, the client can be however indecisive they want and it’s all good – you and your team are getting paid, and I’ve found you come to resent “extras” much less when your team is on the clock. Time billing keeps everyone happy I think.

Maybe I’m being a little cynical about the clients, but before my current position, I was doing a lot of client work for relatively tech-illiterate customers, so “something simple” to them can be a week’s work for me. In the interests of making my clients amazed, I’d do that “something simple” however, I couldn’t fairly charge them more since, within the context of what I was hired to do, there request was reasonable. Here’s an example: “build a website so I can sell xyz, it has to have feature x, y, x” I’d charge them a rate, then when the product was completed and delivered, I get this call, “Can you make this work on IE6?” “Sure, let me just rewrite the app really quick.” I didn’t think ahead about not supporting IE6, so I couldn’t fairly say no, however, if I was billing by time, I would have been paid for that massive pain in the backside. I could have explicitly excluded IE6 in the contract, but then you have to worry about someone wanting it to work on IE5 or some other technology you didn’t think anyone would ever want to use ever again. The simple solution, bill by time. Then your answer to your client can be a cheerful, “I’d love to add x to the app!” Instead of a resentful, “ok, I guess if you REALLY want it that way.”

Long winded answer, but hopefully that adds something to the discussion.


(David Paquet) #7

Thanks to both of you for your insights. I totally agree with you on this when you creating something that don’t exist yet.

But I’m also finding out that some kind of projects can be though of as a product with some customization included in the price instead of a hire-per-x-time project.

For example, a lot of clients want simple Facebook Contests, we decided to create our own platform for this and charge a fix amount. In this way, we benefit from our automation and we can strive to deliver the same features in less time which mean more money in our pocket. It’s an incentive that you don’t have when charging per hour.