Jul 9, 2009 Posted by John MacIntyre

2 Rules for a Happy Client while Billing Hourly

Some of my projects are a fixed rate and some are hourly. If the scope of the project is small enough to accurately estimate, risks are minimal, and nailing down requirements is practical, I may propose a fixed price. Working on fixed price projects are a piece of cake, I go home, work on it, provide periodic updates via email, phone, or in person. When I finish it I install it and give them a CD with all the binaries, documentation, and source code. However, I’ve found working on an hourly rate to be a little different than doing all the above while just counting my hours. There is a lot of distrust with hourly professionals which is only compounded with a mysterious process like software development. After all how do they know you aren’t home watching soap operas, working on your own projects, the project of another client, or even sitting on the beach? How can they tell they aren’t being over charged? The problem with trust, is even if you are honest, a false perception can still destroy the relationship. I know this too well. Once in the late 1990s I was working from home, charging hourly, and I got a call from one of the newer partners of my biggest client (only client at that point). While talking I rebooted to clean out my system* and when the system came back up it played the 20th Century Fox theme, a configuration change I thought was very cool, and he said ‘Are you watching TV?’ I said ‘No. Why?’ … Seriously, I didn’t even making the connection. Two days later I was called in for an unscheduled meeting where my invoices were questioned, I heard a lot of “we’re not accusing your of inflating your hours…”, and the next day, feeling insulted and unappreciated, I resigned. I didn’t make the obvious connection until much later. It doesn’t matter that I was under charging both in terms of my rate and what I charged for, and would never inflate my hours! It doesn’t matter, because the perception was corrupted. It was a tragic misunderstanding since I loved working there and provided a competent, yet naively discounted service. That’s when I came up with rule # 1 1. Work at the client site when charging hourly. While following this rule gave my clients assurance that I was actually working, it still left them in the dark as to my... read more