Should You Charge By the Hour Or By the Project?
Ways to Charge Clients
Businesses can charge clients either by the hours spent on a project or by a set amount towards the entire project or tasks of the project. A web based time tracking system is invaluable for billing clients accurately by the hour. And a reliable system to track clients and work-history is important when you’re charging by the project. A time tracking system like Timesheets.com keeps track of both clients and projects, plus the time spent working on them, either for freelancers or for entire an workforce.
Charging by the hour
It’s not always easy to guess how much time you and your team put into a project, especially if you work odd hours. Keeping track of the time spent on and off your projects helps you be sure that the amount you’re billing is reasonable and accurate.
Charging by the project
You may be quite certain that your prices are fair and competitive, and are comfortable charging a set price for the project. If so, this makes billing easy for you! You can simply add projects against clients and then invoice!
Estimating a Project’s Value
Before quoting a client, you must determine a fair price, but depending on the type of work you do and your experience in the industry this may be a challenge. Whether you charge by the hour or by the project, there are tools and strategies you can use to help figure out what to charge your clients.
You can ask colleagues for advice about how they charge their clients. If you don’t know too many people personally, ask around on LinkedIn or try doing some salary research using industry websites. If you have some experience, base the charges on similar past projects you’ve done. You can always guesstimate the first time around both for an hourly rate or a project rate and see if it sounds fair to your client.
Be careful to get your billing right. Quoting a high price can cause your clients to look elsewhere for cheaper work, while undercharging can mean a heavy workload for very little pay. In most cases, once you’ve made the quote, you’re committed to doing the work for that price.
After you’ve tracked your hours and projects you’ll need to create the invoice. A system that automatically calculates totals for each project at the end of the billing period ensures that you are accurately reporting and invoicing the client.
With a system like Timesheets.com you can be certain that the reporting process is simple and accurate. You will be able to run reports by client, project, or employee and you can bill for all projects under a specific client or you can bill for just one project under a client. Either way, your report will display totals exactly as you and your clients need to see them. For further customization you can download them into excel and edit the columns.
Importance of documentation
By showing clients that you have tracked hours meticulously and by providing your project time cards, clients will be more likely to pay you for your time and to believe in the accuracy of what you report. If, however, you send an invoice with such a simple break down as project names and total hours, you will be much less likely to get what you are asking for or to be offered more work.
A printout of a real project time card will earn you trust, get you paid, and help secure more work.