BootStrap

After spending way too much time explaining and clarifying in meetings, discussions, casual talks, I decided to expand the topic into an adequate post. So if you would like a deeper look into the melee of hourly billing, you’ve visited the right blog. Here are 7 reasons I avoid hourly billing like the plague.

One – It’s Time Consuming

The reason I want to point out first is something I’ve had a lot of fellow designers and developers agreed upon, which is constantly starting and stopping timers (Even with the automation…) is an annoying and time consuming practice, plus it would also fit here to say it’s quite counter-productive. Imagine (heaven forbid) that you forget to start the timer or forget about “time” altogether, you’ll end up with a compounded time-consuming mess, which nobody can afford in this business. Flat-rate billing helps you steer clear from this problem completely.

Two – It Makes the Clients…Shaky

You’d be surprised how much more comfortable your clients will be if they know what exact amount are they going to spend. Open-ended hourly billing, makes buyers nervous. Flat-rate billing will make them feel secure even if they know they’ll end up paying more.

Three – It Encourages Lower Productivity

This one is rather simple. There is no incentive to work faster or smarter, so you end up working slow. And the slower your work, the more you get paid, which can be most of the cases out there right now. Flat-rate billing encourages you to work efficiently.

Four – Tedious Website Update Work

Some might disagree on this, as some of the designers I’ve had the discussion with have, but I hate doing updates on ugly sites I didn’t design. Charging by the hour lends itself to this kind of…situation. I’m one of those designers who want to spend their time designing new sites and helping long-time clients. Flat-rate billing helps you do more of what you like to do.

Five – Won’t Stop Feature Creep

A universal misconception about hourly billing is that it puts an end to feature creep. In fact, it will just frustrate the client. In their mind, every time they ask for something that should’ve been included in your original time estimate, they’re being charged extra. Flat-rate billing can be started off with plenty of padding for feature creep, and this will rarely happen.

Six – Severely Crippling the Billing Potential

Imagine giving an $2000 estimate for a basic website. Let’s say you’ve been doing this for awhile and you’re getting pretty fast. You know it will take you about 8 full hours of work to get the project finished. Billing by the hour, puts your rate at $250, now if you put it like that, it sounds outrageous. And they have no idea how much work and effort it’s taken to hone your skills to their current level. That same project may have taken you fifty hours when you started off designing websites. Flat-rate billing allows you to charge what your services are worth.

Seven – It Encourages Clients to Abuse You

The clients tend to argue, grumble and complain about every little change, every little detail even if it doesn’t matter because they can see every little charge on the invoice. When clients feel that you’re messing around with them by not working fast enough, they can get really annoying and pissed off. Flat-rate billing keeps everybody happy.

Personally, I’ve had great success with flat-rate billing and will continue to stand by it. It’s not slightly better than hourly billing; it’s night and day. It won’t solve every billing problem that you may have, but it will solve a lot of them.

This entry was posted on Tuesday, June 22nd, 2010 at 12:38 pm

and is filed under Articles .
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.