We’ve had tons of reader questions rolling in here at Millo and I absolutely love it!
Today’s question comes from Colleen who asks:
“Should I be charging for client meetings? [What about taking time to] learn or to learn more about a project…”
I think it’s a fantastic question.
Essentially, what kind of work should you bill for and what kind of work should you disregard as “overhead costs.”
Freelancing vs. Agency Work
I used to work at a design agency.
We had two different kinds of hours we could bill: client work and other.
It was that simple: either we were working on a client project or we were working on something else (meetings with potential clients, pitching future clients, learning the latest Illustrator technique, etc.).
These two kinds of billable hours essentially told my boss what expenses he could pass along to the client directly and which costs he could cover with the business’ profits and savings.
But that’s a hard model to scale down to a freelancing level, in my opinion.
Here’s why:
A freelancer trades hours for money, straight up.
If an agency designer spends one hour doing “other” work, there are still other designers in the building doing work that’s billable to a client.
But if a freelancer spends one hour doing “other” work (driving to a far-away client meeting, researching domain names, learning how to build a responsive site, etc), how do they recoup that money?
Here’s how:
How to pay for “other” tasks in your freelance business
Even if you’re not meeting with new/potential clients all the time, there are always “miscellaneous” tasks to be done when you’re building a business. You probably can’t, for example, bill clients for the time you take to buy paperclips and manilla folders from the office supply store.
So what do you do?
You can’t just eat those hours.
Your business (if you’re a freelancer) runs on an hour-for-dollar model.
If you waste an hour, you’ve lost an hour’s worth of money.
So, to make sure you still make the amount of money you need to make your business healthy and live the life you want, you have to account for the “other” work when you bid out your projects or determine your hourly rate.
So what’s the answer?
Alright already, so what’s the answer to Colleen’s question?
I would recommend not billing your client directly for tasks that might be deemed “other” work. Meaning, don’t list it as a line item on your invoice.
But you should include it in your billing model. Factor it into your project bid cost or your hourly rate.
So the answer is yes. You must compensate for every hour you spend at work. Not factoring that in can kill a freelance business.
But get creative. Maybe you can find ways to spread out a miscellaneous cost over multiple clients and projects.
I hope that helps.
Have something to add?
If you’ve got something to add, please leave a comment on this post. I’d love to hear your answer to Colleen’s question.
Keep the conversation going...
Over 10,000 of us are having daily conversations over in our free Facebook group and we'd love to see you there. Join us!
I contacted client with a referral and provided him with the contact info. I also asked if he had applied the training I gave him and he gave me a brief answer but was satisfied. I suggested a set up time for next training. He said not til next month (April) Then he asked me several questions and asked for a luncheon meeting for next day. How do I tell him it is a billable meeting or do I?
Should I receive a bill from a freelancer for the discovery time used to scope out our needs? I was looking for a bid for a project to update our website. The freelancer and I, whom I used before, then gave us a proposal which we thought was too high. We explained that the bid was too high at this time and would consider what we would like to do. We then get a bill for the hour of discovery time without having an agreed upon engagement. This left a sour taste in mouth. Would you consider this practice normal?
Bidding/pitching is still work as expertise is still being utilised and should always be paid for. Quite a few agencies and freelancers I’ve worked with make this mistake and it’s detrimental to our industry.
However, he absolutely should have made this clear beforehand (to which both parties should have agreed on), so I can totally understand why you’d be left with a sour taste. In a professional environment, bills should never be unexpected.
Good article tho. But I personally think the question shouldn’t like this, not “should you?”, but more like a “how”?(not how to billed but how to make client accept the final quote). I think bill these times definitely is a “have to” method. But once you add these into your quote, the final rate will increase, but based on my experience, that way many clients will think the quote is high(actually not, just they think , and of course they don’t know the time cost is billed ), so my problem is how to make client willing to go with the final rate(that including the billed time) ?
(sorry about my English =-)
Great article. What about a case where you communicate with your clients/client team daily using a chat program like Slack? That counts as corresponding, right? Sometimes the length of time of the correspondence can be 10 min, sometimes an hour plus. My opinion is that you should charge for this, as you are technically working, just like you would be if you were designing etc via design software…thoughts?
I think it’s clear we should charge for these kind of communication support because it is work.
The question is how do we do it in a tactful way so the client does not feel like they got nickel and dimed.
I am still trying to figure it out too. One thought is to add a X% admin fee to account for this type of support but what if you find out their communication needs are larger than previously thought?
Do we just eat it?
I have a client who wants to do a weekly phone meeting and constantly asks for my “expert” advice. This has turned into at least 3-4 hours a month and I am annoyed with not feeling able to bill them.
That is a big chunk of time to slip into other tasks I do for them. I have been doing this for a long time and this is the first time I have run into this problem.
Why are you not able to bill them? Why do you feel that a weekly phone call does not merit charging for your time? If you were to call a lawyer, accountant, or doctor on a weekly basis, would you not expect a bill in the mail?
You are a professional, and your time costs money. An occasional call from a good client doesn’t get charged, but for a weekly phone call or an email that requires a thoughtful, researched answer…you bet. It gets charged at my hourly rate.
Just have a chat with them stating that you can’t afford to donate your professional time and that you’re going to have to start charging to dispense “expert” advice. (More tactfully, though.) A weekly phone call will be charged for a minimum of 15 minutes of your time, which is billed at $X.
Either they’re willing to pay or they’ll stop calling. It’s a win-win for you.
Good luck!
You absolutely should charge for meeting time, be it in-person or phone. If you don’t clients will take advantage of you. I wouldn’t factor it into the initial estimate because you don’t know how much time they are going to take away from you with calls. I’m tired of designers not treating themselves like professionals. If you’re a professional you charge for the time. Period.
I like to charge by the hour that way clients don’t bombard me with long lists of ridiculous corrections because they know they’ll be charged for it. I use this great site timecardcalculatorgeek.com that helps me keep track of the amount of hours I worked and they pay that is due. This method always works for me!
I am a new at the freelance web design thing, so I have been billing per project. I have found that on a couple of occasions, I overestimated how much time I would spend on it, but I have also underestimated the time.
I just started using a timer app (“timed” in the windows store) that I have on my computer. Any time I do work for a client, I log it. If a client calls me when I’m not at my computer, I write it down and add it later (I should really look into finding an app that I can log time on my windows phone as well..) Over time I have gotten a much better idea on my time and have adjusted my project estimates accordingly.
I could be wrong, but I think the idea of charging per hour will scare off many small business owners. Has anyone here had trouble with that? I am curious.
I find that many clients are afraid of paying per hour because it benefits the designer to take as long as possible, they have no way of tracking how much time you’ve spent thus far, and they have no idea what the final price might be.
So I generally use time tracking to charge per project rather than charge per hour.
Thanks for sharing!
April
Great solution, that’s actually what I try to do. Like the saying goes, you’re running a business, not a charity. Whenever I feel bad about including those misc costs in my pricing model, I just tell myself, “this is what everyone else does; it’s normal and expected.”
Most of the time I bill for the entire project (after getting the brief from the client). This includes my on site work and also the time I spend with the client, communicating, explaining various things etc. So it gets included in my hourly rate, just as other costs from running a business get into that pricing model.
I feel that if a designer is going to bill clients for the time spent meeting with a client that is something that should be included in the contract. Because the time spent meeting with a client could be spent completing the project and etc.
Great article. It so hard to know how to handle clients in this way. Personally I try my hardest not to have unnecessary meetings (though clients seem to love them!). Sometimes the hardest word to say is “no”, but sometimes you have to if you want to be a success as a freelancer. But your right, indirectly charging the client by planning your expenses in advance IS the best way to go.
Hi Preston, thanks for the tips! These are really good advice 🙂
Very useful Preston.
Thank you.
To stay afloat it’s wise to build overhead (copies, faxes, post-its, postage, paper, ink, etc., etc., etc.) into your hourly rate. Yep, even a studio that’s totally digital output has overhead. I’ve also found it helpful to list items you’re not charging them for as a separate item and under the totals column – just say, “no charge”. You might even want to put value on it that’s appropriate. I don’t use the word free because nothing in business is really free. 😉
Great post! I was taught to factor those “misc” costs across the overall project total.
I agree, with one exception… if you have a regular client, or long-term project that requires weekly or monthly meetings in addition to reviews or project updates, I think it’s fair to identify this time in your bid AND bill the client for meetings above and beyond any agreed upon meetings. So you’re saying my bid is XX dollars which includes one meeting per week and three design reviews; and I charge XX per half hour for any additional meetings (phone, in person or online), so it’s clear that you expect your clients to be organized and you will be organized and ready for meetings in turn.
This is a really good subject and one that many starting freelancers need to address. First of all, I have found that meetings and phone calls need to be charged or clients will take advantage. Story: I had one client that was very “verbose”. I took him three or four times longer than anybody I have ever met, before or since, to verbalize anything. At one point he was concerned that billings were expensive and I simply told him that our phone meetings were exceptionally long and I had to bill for the time as it was taking me away from being able to generate billable hours. From that day forward he called me at lunch. Precisely at 12:00. I don’t know what his rational was but I was still billing him for the conversations and they still were long.
Second, during any meeting or conversation you are dispensing knowledge, ideas, observations and attending to all manner of job related subjects. These are your expertise. Bill for it. You need to bill for every action that you take on your client’s behalf in completing his project. It’s just that simple.
Third, you can’t bill for everything you do in a day because not everything you do in a day is for your client’s benefit. That is where your hourly charge/average-billable-hours-in-a-day comes in. Figure it this way: 1. Decide what you want to earn in a year (decide if you want paid vacations or not). Divide that by the number of productive weeks you want to work (50 if not paid vacation). Devide that by the numbers of days you want to work in a week (5) anfd then divide by the number of productive hours you can bill in a day (you can’t bill every hour as bookkeeping, software updates, housecleaning, computer maintenance, learning and other things will prevent you from doing that). That’s your raw billing hour. Why a “raw” billing hour? Because you need to account for your cost for healthcare, studio rent, business supplies that you don’t bill to the client and other out of pocket costs (software updates are a killer). How does that figure look now? Adjust as necessary. As you will probably realize, if you charge 35 bucks an hour you will be poverty stricken.
So you can see, your time is worth money. Charge for meetings and phone calls. Just like the lawyers do. Any worthwhile client who respects you as a professional and not as a necessary evil, will understand.
Thank you Steve,
Your advice confirms how I see things too. I even recognize the “verbose” client 🙂 It’s really good of you to share this. I think it might help me to put my foot down. It’s not easy with some clients that are very manipulative…
Greetings
Anna
Great advice Preston. There’s definitely way too much time I wish I could bill clients for, but couldn’t do it and not feel guilty. I usually just charge what I estimate it will take to finish a project, but I will definitely start factoring in all of those “non-billable” hours. Thanks!
Hi, very interesting topic. I’ve worked as a freelancer for 6 years in the UK and I’ve lost count the amount of hours/days I’ve lost to account managing, project admin, meetings etc
So now I add on a handling charge to all my quotes. This differs from 5% to 20% (of the total quote) depending on the client/project. For example, if its a project that requires a lot of hand holding/admin then I’ll charge the 20% rate. Im up front about it and describe what its for at the bottom of my quote. I’ve never had a client question it or refuse to pay it.
At the end of the day I’m a freelancer and you have to do everything yourself. And time costs money!
Works for me!
S
Hi Preston, this is one of those it depends on the client answers. I do guesstimate meeting time into my project cost–but it never seems to be enough! I don’t mind a longer meeting if I know we are solving issues, finding solutions, but what happens when you are sitting in the reception area and are kept waiting and waiting. I have found that a client respects your time more if they know they are paying for it. Depending on the client, I charge for meetings /travel time as a line item.
I believe the answer is much simpler: Bill the client for the value you deliver and not the time you spend producing that value.
Exactly!
I always include 1 hour free meeting after the agreement has been singed. This is for new clients. For returning ones, I am open to free meetings because they want more work.
I do something similar, consultation (meeting) is free if they end up using me.