It can be difficult to know what is “proper” billing when you first start freelancing.
Obliviously you know to bill for the time you’re using your skill.
But what about phone calls with the client about the project?
In-person meetings?
Travel?
Thinking time?
What if you lost time going down the wrong path and have to rework something?
There are a dozen more examples I’m sure you can think of. But they all point to one underlying question.
Will my client be upset if I billed them for this?
It’s an interesting question. And one that I have an interesting answer to (at least for me). But first, let’s examine this in more detail.
Will your client be upset if you billed them. Much of this relies on what your agreement with your client is.
Did you agree to develop a piece of software in exchange for money? Or did you agree to exchange your time as a skilled software developer for money?
There is a big difference between the two. It’s subtle, but it’s big.
By agreeing to develop a piece of software, then anything that is involved in that development should be part of the exchange. Thus, billable. Activities that are directly involved are easy. Activities like writing code, creating a user interface, etc.
The hard part is the activities that are indirectly involved with the development. The status meetings, the user training, travel on-site. These indirect activities are where the hesitation stems from with billing.
As a contrast, the second way is pretty clear. If the client is paying you for your time and they use that time, it should be billed. Frankly speaking, if they want to use your time on something that isn’t the best use of your time (e.g. meetings, travel)… Well, then that’s their problem.
(Don’t get me wrong. Meetings and travel time can be the best use of your time. But the vast majority of the time they aren’t.)
I have had clients tell me that they understand something isn’t a good use of my time but they still wanted me to do it in order to make them feel better. (Notice that they were paying for a better feeling, not necessarily a better thingy).
My Only Deciding Factor
Whenever there is any confusion about if my time is billable or not I have a simple test.
Was the activity done with the intention of increasing the value to my client?
That’s it.
The big keyword here is intention. Not the direct results. Not the actual creation of value.
The intention of creating value
While I always try to create value, there are times when it doesn’t happen. Maybe the prototype failed. An experiment proved that the old way was better. Maybe a butterfly in Africa flapped its wings which caused a cascading failure in the project (Butterfly effect).
As long as I made an attempt to create value. An honest attempt. At the best of my ability.
This makes it easy to decide if I should charge for something or not.
- Phone call to plan the next version? Billable. Value intention: clear plan and decisions on where to focus.
- Travel to their office for in-person talks? Billable. Value intention: They get to communicate with me in a medium they prefer.
- Debugging a bug I accidentally introduced? Billable. Value intention: Knowledge about how the bug occurred which is feed back into planning and estimating.
- Estimating features? Billable. Value intention: A clear idea about how much work is needed and several solutions on how to proceed.
- Pre-conference call chat about family? Not billable. Value intention: There is very little value to the project itself. Most of the value is in creating a stronger relationship with your client (which arguably helps you more than them).
You can see how easy this one rule of thumb can be used to make decisions. I recommend either stealing it from me or creating a similar one for your freelance business.
Oh and most of all, communicate your billing rules to your client upfront. It’s much easier to set expectations up-front than to argue about billing details later on.
Eric Davis
P.S. Since I’ve started freelancing in 2007, I’ve never had a client question my billable hours. Clarity is important.