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Ask HN: How do you handle billing by the day?
5 points by rquantz on Dec 22, 2012 | hide | past | web | favorite | 4 comments
Several prominent members of the HN community advocate billing at least by the day for freelancers/consultants. This is extremely appealing to me, and I've begun discussing changing to this billing structure with some of my existing clients.

That being said, I'm still not totally sure how this works. I believe I recall tpacek saying that any client who has any problems or bats an eye at this type of arrangement is pathological and should be avoided. I will acknowledge this is the case, but some of my apparently pathological clients have questions that I don't have really good answers for yet:

  Will you charge me for a day if I have a ten minute phone call/question for you?

  What about 1 hour?

  How will you handle emergencies if you're scheduled to work for someone else that day?

It seems that when a client pays by the day they have a reasonable expectation that you can guarantee that they have your complete attention for the entire day. Earlier this week I actually had my first "by the day" billing engagement on a new project for an existing client. They were scheduled for Monday, and on Monday morning I sat down at my desk to start work for them, only to find a frantic email from a client whose webserver had apparently been hacked. I spent the morning cleaning up that mess, and it was close to noon by the time I got to start working on my supposedly only task for the day. Should I have charged my emergency client for a day's work (assuming I had negotiated that with them, which I hadn't yet) and then charge the client I had scheduled that day for a day's work as well? Or should I have called it a day when I had finished the cleanup, and told the originally scheduled client I would work on their stuff when I had another day free -- in this case, probably not until the new year?

Billing by the day sounds great, but there are a lot of edge cases that I'm not sure how to handle yet. Most of my clients at this point are pretty reasonable to work with, but they are small businesses with non-unlimited budgets.

Good question. I'm new at it as well. My policy, which I am admittedly experimenting with, is to count a 4+ hour day as one day. I also add up partials and count them as a day when they hit four hours. So:

Monday: 2 hours.

Tuesday: 15 minutes.

Wednesday: 9 hours.

Thursday: 5 hours.

Friday: 3 hours.

adds up to three days plus 1.25 hours accruing. It still has issues like: should this be explained to a client because it's confusing? What do I do about accruals that never reach four? Does it encourage me to work close to four hours per day, which is not the point of it?

Another method I've thought of, which I read on some company's blog, is to assign people to ongoing projects who bill daily, and to also have a sweeper who bills hourly on questions, emergencies and miscellany. I'm not sure if clients would accept such a person's hourly exceeding the daily rate without setting that expectation upfront.

It's hard to fit because the daily method is best for a developer who works to a spec, turns the site over to someone else when done, and always leaves gaps between projects to avoid any overlap due to deployment issues and other problems like that.

And meanwhile, some freelancers I know are saying that weekly is all the rage...

the 4+hour model is awesome. thanks for sharing

Maybe not all types of contracting work for per day billing.

For me I think it works as I'm paid to deliver a functioning product prototype that then goes to QA. Getting pulled into something urgent that required immediate attention is rare, very rare. So I can pretty easily predict how many hours I can devote a month out.

But in your case, do you have to declare which days you allocate to a customer? I suppose if its sysadmin type stuff you may have a queue that the customer expects you to get to on or by a certain day.

I have a friend who bills by the day, because it gives _more_ flexibility and not less. His explanation: sometimes you have days where you only put in 2 hours, other times you have days where you put in 12. He chops a project up into how many "days" he thinks it will take and runs with it.

Really the "days" becomes an arbitrary unit of measurement at that point, which is really what "hours" are too but it's hard to sell that to clients sometimes.

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