Even the best clients expect you to underbill a little, or at least be judicious in your invoices. Here are four tips Ken Hardin finds useful in massaging his monthly billings.
Retainers are a great way to establish a core gig in your client portfolio, if you can find a client who needs flexibility in her resource allocation and with which you enjoy a sense of trust.
As I mentioned last week, trust is an essential component of a successful retainer relationship. You have to trust that your client won't attempt to wring a week's worth of free labor from you, and your client has to trust that you will bill hours honestly.
Or, mostly honestly. Truth is, even the best clients expect you to underbill a bit -- or at least be judicious about what you include as a billable effort. As a business analyst, I often do my best problem-solving in the shower, but that's never going to show up on my monthly invoice. More materially, most clients expect to be able to cancel a status meeting or bump back a spec review by an hour without paying for that "dead" time.
At first blush (at least from the contractor's perspective), this sounds a bit askew. Hourly means hourly, after all. But remember that waste is a built-in part of any system; most American companies are used to wasting some of their employees' time (and vice versa), and the grease for those wheels is a few extra hours here and there to complete tasks. The premise of freelancing is pay-as-you-go, but companies are always going to view the ultimate value of your engagement by the deliverables they recognize.
All client relationships boil down to give and take -- if it's just not worth it to you to eat a few hours a month in exchange for steady work from a happy client, most of us freelancers are jealous. Depending on the value you assign to a client, you may just want to go ahead and send in overage billing monthly, and let the chips fall where they may.
But for the rest of us who need the work, here are a few tips I have found useful in massaging my monthly billings. Most are common sense, but then again most good business is.
- Discount your monthly hourly total by 5 percent to 10 percent. As I said earlier, waste is part of any system, and that includes my own time management. I give myself credit for being quick and good at what I do, but I also understand that checking college basketball scores is not what my client is buying. It's just a gesture of good faith.
- Build your work schedule in billable half-hour increments, and if you don't spend a half-hour on something, don't bill for it. At first blush, this tip sounds awfully generous -- in a haphazard work environment, you could end up billing only for 60 percent of the real time you devote to a client. The trick here is the scheduling part of the equation. Don't jump on every email and minor task for a client as though each one is a crisis. Block out windows of time to address your client's requests, and you'll find yourself making much more efficient use of your time. The occasional quick phone call or text that can't be addressed in this schedule falls into the make-your-client happy pot.
- Meet with your client as soon as you see a heavy billing month coming. Even though you have successfully ducked the deliverable-based SOW bullet, most consultants know roughly how long it will take to complete a biz req or a few mock-ups. Meet with your main client contact and let him know in advance that their requests are going to push you into extra billable hours, and give them a credible range of additional hours they can expect. Again, a huge upside of being on a retainer is not having to discretely quote every deliverable -- no reason to undercut yourself there. Just keep the lines of communication open.
- Look for ways to farm work back to in-house staff, if need be. I know this seems like taking money from your own pocket, but always remember that there is a budget line somewhere with your invoice attached, and blowing budget lines is never welcome in a business environment. If part of your project analysis is some basic Excel pivot table construction, explore the possibility of a client team member taking those hours off your plate. If it turns out that they simply can't, then you've just set a clear justification for your unusually large bill for the month, and you've shown good faith in the relationship, which is worth more than a few additional billable hours.