For reasons to bill per project. Billing per project or per hours?

Some time ago we told you about the financial and market parameters you should look at when fixing your rate per hour of work.

But since billing for hours is not always the best in this article we list four reasons why you’d consider billing per project instead.

1. Experience is a plus

If you are seasoned in your job, experience is a plus. You know how long it takes you to complete a specific project and you can estimate how much your compensation should be.

Because of your experience you’re able to deliver more quality in less time. Billing per hour, in this case, can be counterproductive. This can also happen the other way around: of your customer is an expert in the field, he will be the one evaluating how much are you worth.

2. Divide long term projects into more easy-to-bite activities

If you’re working on a long term project it is better to divide it in stages or milestones. You could charge for each of these parts independently and this will also ensure you cash out your time as you go and don’t have any surprises, such as an unpaid invoice, at the end.

One way to divide these projects is to do it in three main phases: preparation, which will include documentation and supporting materials research, development, which consists of all the writing, coding or designing you need to do, and review, where you’ll include any changes needed after your first version is delivered or the control of results.

3. Make your client happy

Charging per project instead than charging per hours builds trust between you and your customers. Billing per project, your customer knows what he’ll have to pay from the very beginning and can see if the perceived value justifies that expense. Billing for a final deliverable also saves you both the need to track and report hours worked.

4. Make sure you keep things on scope

Many times projects grow over the initial demands and expectations. Our advice is that you spend as much time as you need in defining the project scope with your customers in the first days.

Most of these over the scope complications happen because the proposal was not clear enough. It is vital to clarify your customer’s needs to ensure that there are no misunderstandings.

Charging per project will make sure that your responsibilities are well defined from the start and that a one-week-project doesn’t end up being a one-month-project that your customer won’t pay because ‘that’s not what was agreed’.

How do you bill for your services? Which are your good and bad experiences with per hour and per project billing?

Photo credit: James F Clay (cc)