Hourly, Monthly or By Project?

If you’ve been asked how you charge for a project and aren’t sure how to answer the question, here’s a crash course on the different ways you can bill a client, as well as their benefits.

Charge By the Hour
Projects can often be difficult to estimate in terms of how many hours they’ll take to complete, so charging by the hour can often be beneficial to you. From the client’s side, however, he’ll probably want at least an estimate of how many hours you expect it to take. He, of course, doesn’t want to give you free reign to rack up hundreds of hours on his dime!

If you’ve done a similar project before, start with a sketch of what you think this project will take. Outline the scope that is involved in completing the project. Make it clear that any work outside of this scope will be billed at your hourly rate, and may cause the project to go beyond the original estimate.

Monthly Retainer
If you perform a set of the same services each month, it may be easiest to charge a retainer. With a retainer, you agree that you will perform A, B and C on a monthly basis. Again, anything beyond this scope should be charged additionally.

How do you determine your retainer price? Estimate how much time the activities take and multiply that times your hourly rate. Typically if you sign on a client for an extended contract, say six to 12 months, you can discount this rate a bit.

Bill by the Project
Many clients will want a flat fee so that they can know what to expect for a given project. You can easily charge a fee based on the work you expect to do on a project. But if you’re unsure of how long it will take you, you might prefer to charge by the hour.

The more projects you take on, the easier it will be to come up with a fair fee for a similar project down the road.

Rules to Charge By
We can’t say it enough, clearly define your responsibilities so that there is no question of what the client is paying you to do. If, for example, you’re building a 4-page website, your client should expect to pay more if he adds on additional pages to the project.

For any work beyond the defined scope, charge your hourly rate. So if you opt for the monthly retainer or the project fee, anything you do that falls beyond what you agreed on should be billed hourly. This keeps you from doing extra work without being paid for it.

Depending on what field you’re in, you may end up charging different clients in different ways. You may bill hourly, by project and by retainer, based on the client’s individual needs.

No matter how you bill your clients, Quote Roller can help you through the process with our unique proposal software. Get started using it today.

Photo credit: miguelb