Overtime and Billing
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- eryx
Hey all I thought I would bring up an idea of how to bill a client based on how we bill clients.
There are three ways we bill clients; Hourly, consumables charges and mileage. The mileage and consumables are pretty self explanatory and don’t really apply but what is interesting is how our hourly billing works.
Most of the time the jobs that we do are incredibly rushed (sound familiar). We charge one rate during the hours from 8am to 6pm on weekdays and then an increased after hours rate, about 30% more for all other hours and weekends.
This shows up on a bill as a separate charge so if your hourly rate was $60 you would have a overtime rate below of $20 and all hours charged at that rate would be added.
For example you work from 6am - 6pm you charge 12 reg hours and 2 overtime charges.
If the job is not a rushed job then the client will not bother having you work 24h to avoid paying extra. However if the project is critical they will have to be willing to pay you a premium in order for you to finish quickly.
What do you think?
- maquito-1
- fyoucher14
Stop charging hourly. Done.
- seriously. just stop.doesnotexist
- For a freelancer that may work, in a studio or agency, it really doesn't.ETM
- Hayoth0
What is going on in that brain of yours?
- formed0
Yeah, I don't charge hourly unless it's for small changes to an already completed project.
I also don't charge rush fees - it can either get done in the time or not. If it can, the shortcut is the "back/forth communication, changes, etc." that get cut from the process. In the end it might mean a few longer days, but overall the fee/hr is much higher, so it works itself out.
I've found clients like simple transparency, "how much is this going to cost, total". It also saves a ton of headache worrying about estimates and invoices.
I like simple, though. I should track a few things more accurately, but overall, I want to know how much is coming in and going out at the start of a project (I'll pay subs however they want, but I expect a "total" cost upfront, how they break it down is mostly irrelevant).
- doesnotexist1
what you get paid should be more than your time. are you providing value? make them fucking pay for it.
- I always feel like hourly devalues someone, or makes it look like they're gauging if its a HUGE hourly rate. Total cost you can get more for the value providedformed
- Depends what market and scale you work in.ETM
- Total cost is a trap if not based on solid calculations of fixed costs plus desired profit margin.ETM
- etm, yes. basing your pay on hours only is retarded. hourly does devalue. to arrive at a project rate you need to know a) your value b) your timedoesnotexist
- and c) multiply those together in whatever formula you like. do you like money? make it = a huge number. are you good? even bigger.doesnotexist
- ^+formed
- ETM0
Do any of you saying don't charge hourly, own or work in an agency or studio environment? Or are you freelancers and/or individual business for self?
- Both. We work at a project level with a scope of work.Hayoth
- I have my own consultancy. And I generally charge project rates but there is one client who only wants hourly, and it's fine by me.wordssssss
- I own my businessformed
- To Wss' point, for RFP's that require hourly, we'll just take the amount we want to charge and work backwards..people care about total costsformed
- Your business model is based on "the amount we want to charge" and not based on the solid costs plus profit plus contingency?ETM
- It's based on the value I bring and what the market will bear. If I could charge more, I would. You are thinking about it too much.formed
- It's not much thought. It's established values and basic math. It's actually quick and easy. To each their own.ETM
- yes i do. i consult on business operations and a number of other things that in the end, mean more money in my pocket and others'.doesnotexist
- nb1
I fuckin love billing by the hour.
- Continuity0
Billing by hour sucks, it really does ... but it's the reality of non-retainer cost estimates in advertising agencies.
Usually it will break down by team member, though, as opposed to a sort of overall agency hourly rate. So, as an example (figures are of my own educated invention):
Creative Director: 150€/hr
Art Director: 95€/hr
Copywriter: 95€/hr
Account Manager: 110€/hr
Junior Art Director: 65€/hr... and so on, and so forth.
Sucks, but there it is.
Whether or not those figures get doubled for rush jobs, I don't know, I've never been that close to the CE process in any of the agencies I've worked to be able to say one way or another.
- Continuity0
To the original question, though:
'However if the project is critical they will have to be willing to pay you a premium in order for you to finish quickly.'
Of course. The logic in charging more is that the client needs to — NOT should — pay for the time. Time taken away from work for other clients, time take away from team members' personal lives.
The nice thing to do, though, would be to also give aforementioned team members overtime pay, for the same reason about private lives stated above. :)
- doesnotexist1
a premium means not only a drastic increase in capital cost, but also a huge reduction in deliverables. what i usually mean when i'm doing this in reality is, i'm giving you this one option and you have to like it AND you have to pay me WAY more than you want to.
don't like it? find someone else to bend over for you.
- so, premiums are real things you should believe in and employ depending on many circumstances.doesnotexist
