Incremental hours?

[exverizon]

For a few years now, I've billed a "first hour" rate, and then 1/2 hr increments that are different. My customer paid it without a word. Now, the client says, for simplicity, they would prefer a flat $X/hr. So now, if a job runs 75 minutes, instead of billing 1.5 hours, I'm billing 2 hours...the extra 15 minutes are a full second hour.

Wouldn't that be your understanding of $X/hr? They are trying to pay fractions of an hour, claiming the time should be calculated as the flat hourly rate times the actual time on the job. I say no, they wanted flat hourly rate, and they're getting that. I can bill increments again, but at a separate incremental rate.

What is fair?

 

[MrDataGuy]

What is "Fair" and what they are expecting may be two different things. They are asking for $x/Hour, but I think they are really asking/expecting is $x/60/hr, or $y/Min.

So lets use some easy number: You and they agree to $60 per hour, which is $1 per min. So a 75 min job would be billed $75.00

Now you and they can agree to anything that you want, but you had better both agree to it first. For example you could agree to a minimum of 15 mins, or 1 hour, or whatever you want. You can also agree to rounding to the nearest (or always round up/down) 15 mins, or 10 mins, or to the hour or....

To answer your core question: "So now, if a job runs 75 minutes, instead of billing 1.5 hours, I'm billing 2 hours...the extra 15 minutes are a full second hour. Wouldn't that be your understanding of $X/hr? "

I would be very unhappy that you decided to round up the time to a full 2 hours. If there was to be rounding it should be to the nearest hour, e.g. 1 hour (BTW 75 mins is 1.25 hours not 1.5 hours. To be 1.5 it would be 90 mins) I would have no issues with $x * 1.25 hours.

BTW I might pay the 2 hour bill once but I would most likely never use that person again because I would feel ripped off and never trust them again.

Now of course this is one person's opinon, but you asked.


Lion Crest Software Services
Anthony L. Testi
President

http://www.LionCrestSoftwareServices.com

 

[MrDataGuy]

Let me add this, which I think would make my point about rounding up to the next unit of time clearer.

Instead of a X$/hr rate we agree to a Z$ per day rate. Lets say $100 per day (Easy numbers). I contact you for some programming and say I need you to make a change in this program and bill me for doing it. The programing change is easy, a 10 min fix and you are done. In fact I get the change sent to me within 15 mins of sending you the change request, and the bill is sent for the coding. I read the bill" 10 minutes of programming billed @ $100 per day, total owed $100.00.

What do you think my reaction would be??? If you guessed not pleased you would be right.

Can you bill $100 for 10 mins of work, sure but make sure everyone knows that you have a minimum of 1 full day billing per project. I actually do that with a client, he liked to give me work in drips and dribbles which drove me nuts, told them that I would be billing at a minimum of 2 hours per project so it was in their best interest to give me 2+ hours of changes at a time, or if they wanted I would wait until I collected 2+ hours of changes before I begin. Some times the client would say no we really need this change done now, and I understand the 2 hour minimum but go ahead and do it. e.g. all parties knew what was happening.

Bottom line try to stop any suprises!

Lion Crest Software Services
Anthony L. Testi
President

http://www.LionCrestSoftwareServices.com

 

[Mountainbear]

I agree with both of the previous posts. I think what the customer is saying is they are not happy paying more for the first hour than your regular rate. I could be wrong about that, customers very rarely tell you exactly what they think of your pay structure.
It is common to charge more for the first hr to compensate for travel, check in with reception or whatever.
What I do is charge in 15 min increments with a MINIMUM of one hour. Your minimum can be anything (2hrs, 1 day etc).
If I fix something and it takes 10 mins I either send them a bill for $0/no charge (to remind them that I am a nice guy and they should tell every one to call me), or I send them a bill for 1 service charge which happens to be the same as 1hr. I don't think I would be happy to get a bill for 2hrs if you were there for 1hr 35min, but some people would like by the minutes and that's not going to happen.
The main thing for me is that my billing is straight forward and fair. Whether the customer thinks my rates are reasonable or not is up to them.

 

[PDQBach]

Take your first hour rate and use it for all your hours. They're coming to you because of your ability and your knowledge of the existing system.

If you get pushback (you shouldn't) then drop it by 10%.