billing for consulting work

[WM]

I haven't done any hourly work in years, but an opportunity just came my way that I think will work out well. But what is standard practice as to what time to bill for? Obviously time spent working on the project, and also meetings with the client, I assume. And email/phone time? What about driving time (they're about an hour away)? Do I ignore that and just claim mileage on my taxes? Anything else I'm forgetting?

[socca]

There are enough potential 'gotchas' associated with consulting/contracting that I recommend some recreational reading:

Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants

You also might find some useful info at amazon.com. Good luck!

[FinallyRetired]

I still do occasional consulting. I bill the time that I'm actually working on the project, be it my time, time speaking with clients, email/phone time, etc. But I don't bill driving time for meetings, since it's hard to justify that as time spent on the project, and if I were working that time would not be paid.

Flight time for travel to meetings is different, since that's time above and beyond what would be expected of an employee. However, I hold that to an absolute minimum and discourage that type of travel, if the same thing can be accomplished through telephone or other means. I just think it's silly to spend more time and money on travel than on the actual consulting.

One benefit of taking early social security is that I'm severly capped as to how many hours I can w--k, so my consulting time is minimal.

[Life_is_Good]

A local firm out here charges a flat "house call" charge of $35 and then hourly fee for IT consulting work.

[FurBall]

I have it spelled out in the contract. My current contract says that local travel is not reimbursed. I keep track of all mileage and deduct all travel except for first trip from home to office and last trip from final office to home. This only works because I generally work a full day for the customer.

If were going to short meetings, I would spell out that travel time was billable.

[Peter]

When I had to travel for consulting work, I charged full hourly rate during the normal business day. The position I would have taken, if challenged, was that I could have been billing time on other projects if I wasn't on the road. FWIW I was never challenged.

For long distance travel outside business hours, I generally didn't charge.

Peter

[Martha]

My experience is that clients hate being billed for travel, especially travel to get to them. But I don't know your industry.

[nphx]

Agree - a flight is different than a cross town drive. On one client i have there are two rates - off site consulting and on-site services. The on site rate covers the expense/inconvenience.

[target2019]

I used to bill one-half the hourly rate when I travelled to the client's site. If the drive time was 30 minutes, I'd charge a minimum of 2 hours plus 30 minutes for the drive. That would add up to $125.00.

Over the last five years or so, I changed that to a higher rate for the first hour. Now I charge $90 for the first hour, and $60 for subsequent time. A typical half-day outing will be $210, minimum.

In most cases you'll find that it does not help to reveal your hourly rate. Try to bill for the total work you accomplish. However, the company might set the rate, and then you have no choice. Always take money that is offered, unless there is a better task out there for you.

BTW, set a limit to how much credit you'll extend. There are many companies that will string you out for months, and continue to bring you in to do more work, always promising more work, never paying. Remember, you're not in the lending business. Your bills must be payed in less than thirty days, and you should get the same condition from the company.

[deserat]

What target2019 said - most of the reading I've done says to try and charge by project and not by hour - I've been able to do that for two of my customers so far, but everyone else wants hourly. Some of my prospective customers have said they like the idea of a fixed fee as they don't like the continual arguing over hours. Also, you are limited by the number of hours, not by the number of projects. The old adage of knowing from experience how to do something quickly being worth the charge.

As for travel, I'm charging half-rate for time during travel. But my travel is usually to another country right now.

[eridanus]

I use the laptop during the flight so there aren't any questions why I bill half time for plane travel. For local travel, I deduct the mileage. I do bill for phone and email time.

[WM]

Thanks for these responses, there's a lot of good advice here.

Regarding the travel time, we'll probably discuss it at our first meeting this week. After listening to you all, I'm inclined to say that if they want to meet more than every couple weeks I'd start billing half time, since it really does take a big chunk out of my day to get there and back. I doubt this will be an issue, though, since I don't think we'll need many in-person meetings.

My other projects have been a lump sum, but this was presented to me as hourly and that's fine since it's report writing and I don't have a good way to estimate how long it will take.

Making sure I get paid... I've heard that can be an issue. One website said to expect to write off about 10% of your work! So far I've only worked with people I trust, but I'm sure if it ever becomes an issue I'll be back for more advice