Does that get any pushback? My impression was that big companies especially are set up to pay contractors either by the hour or per-project, and don't really like alternative arrangements. The (admittedly few) people I know who try to bill by the day or week still convert it to an hourly rate for invoicing; they might verbally agree with the client on something taking "one week", but they submit an invoice for 40 hours to the client's payroll department, because those are the kinds of invoices they know how to pay.
If a client demands per-hour when you've delivered a per-week quote, tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day". You can do that with weeks, too: "sorry, the tempo of my work is in multi-week projects, and if I work only part of a week for you, I've ruined that week for any other client".
A client that demands a statement of work broken out into hours may be pathological (bear in mind that lots of F-500 companies have idiotic time-tracking software that bills their internal people by hour, and bear in mind that every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors, and you probably shouldn't blame your actual customer for their purchasing department --- just don't change your terms for them.)
It might just be a bit of software-pleasing dance, but (this is secondhand information, fwiw) the usual practice for doing "weekly" work seems to be to just agree on an hourly rate and then agree that you're going to bill them 40 hours for "one week of full-time work". So saying "I'm going to work on this full-time for the next 3 weeks" translates in invoice-speak to "I'm going to send an invoice for 120 hours of work at $agreed_rate", treating "40 hours" and "1 week" as just alternate units for the same quantity, rather than sending a detailed statement that you spent 2.5 hours on Task A and 4.5 on Task B. So I guess it's effectively weekly billing in a roundabout way. (This is mostly Lockheed-type companies that I hear about, which seem to treat single-person consultants as effectively "outside employees", and only like to negotiate custom terms with giant consulting firms like KBR.)
tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day"
You don't need to go through that whole song and dance. Simply make your hourly rate higher than your daily rate.
Alert clients will prefer to hire you by the day every time. As for the less alert clients, if you are in a kind mood you could tip them off to the savings they'd enjoy if they hired you by the day instead.
Modify your hourly rate upwards depending on just how averse you are to working more than an hour a day even for the least alert and/or deep-pocketed clients.
This is clever, but for me, if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c.
Incidentally, I'll happily work an hour for people I like (and it never bothers me when people ask). I just don't bill for it.
"if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c"
If they are paying at least your daily rate, why would you mind that your day is shot for your other clients? They are, effectively, hiring you for the entire day and paying what you've determined you deserve for it.
If they are inattentive/crazy enough to actually pay you more than your daily rate for an hour (or any number of hours up to the maximum number of hours you'd work in a day anyway), then that's just pure gravy. Same for the case when it takes you less than a day to do the work you're getting paid at least your daily rate for.
In your original post, you'd said "I can't effectively work for any other client that day, so my minimum billable increment is a person-day" so in recommending the raising of your hourly rate to more than your daily rate, I was going on the assumption that your daily rate would have been sufficient for you to accept the job in the first place.
Of course, if you can't afford to work a day for your new client because of other commitments, you'll either have to refuse the job or raise your rate to the point that it is worthwhile for you after all. Perhaps that's what you were referring to when you cited the 8x daily rate.
> every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors,
Lol, you just put several years of my life into a clear statement. Entirely the reason I don't do enterprise stuff as much unless I'm dealing with high enough decision makers who can clear the path for me (which is not often enough)
What do you think of offering an hour block purchased in advance, then billing that block in daily/weekly increments? Provided the customer is onboard. It may not work for the worst of the worst evil AP departments but might help with the edge cases.
Comments
Does that get any pushback? My impression was that big companies especially are set up to pay contractors either by the hour or per-project, and don't really like alternative arrangements. The (admittedly few) people I know who try to bill by the day or week still convert it to an hourly rate for invoicing; they might verbally agree with the client on something taking "one week", but they submit an invoice for 40 hours to the client's payroll department, because those are the kinds of invoices they know how to pay.
Lots of clients want to pay per-project.
If a client demands per-hour when you've delivered a per-week quote, tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day". You can do that with weeks, too: "sorry, the tempo of my work is in multi-week projects, and if I work only part of a week for you, I've ruined that week for any other client".
A client that demands a statement of work broken out into hours may be pathological (bear in mind that lots of F-500 companies have idiotic time-tracking software that bills their internal people by hour, and bear in mind that every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors, and you probably shouldn't blame your actual customer for their purchasing department --- just don't change your terms for them.)
It might just be a bit of software-pleasing dance, but (this is secondhand information, fwiw) the usual practice for doing "weekly" work seems to be to just agree on an hourly rate and then agree that you're going to bill them 40 hours for "one week of full-time work". So saying "I'm going to work on this full-time for the next 3 weeks" translates in invoice-speak to "I'm going to send an invoice for 120 hours of work at $agreed_rate", treating "40 hours" and "1 week" as just alternate units for the same quantity, rather than sending a detailed statement that you spent 2.5 hours on Task A and 4.5 on Task B. So I guess it's effectively weekly billing in a roundabout way. (This is mostly Lockheed-type companies that I hear about, which seem to treat single-person consultants as effectively "outside employees", and only like to negotiate custom terms with giant consulting firms like KBR.)
tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day"
You don't need to go through that whole song and dance. Simply make your hourly rate higher than your daily rate.
Alert clients will prefer to hire you by the day every time. As for the less alert clients, if you are in a kind mood you could tip them off to the savings they'd enjoy if they hired you by the day instead.
Modify your hourly rate upwards depending on just how averse you are to working more than an hour a day even for the least alert and/or deep-pocketed clients.
This is clever, but for me, if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c.
Incidentally, I'll happily work an hour for people I like (and it never bothers me when people ask). I just don't bill for it.
"if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c"
If they are paying at least your daily rate, why would you mind that your day is shot for your other clients? They are, effectively, hiring you for the entire day and paying what you've determined you deserve for it.
If they are inattentive/crazy enough to actually pay you more than your daily rate for an hour (or any number of hours up to the maximum number of hours you'd work in a day anyway), then that's just pure gravy. Same for the case when it takes you less than a day to do the work you're getting paid at least your daily rate for.
In your original post, you'd said "I can't effectively work for any other client that day, so my minimum billable increment is a person-day" so in recommending the raising of your hourly rate to more than your daily rate, I was going on the assumption that your daily rate would have been sufficient for you to accept the job in the first place.
Of course, if you can't afford to work a day for your new client because of other commitments, you'll either have to refuse the job or raise your rate to the point that it is worthwhile for you after all. Perhaps that's what you were referring to when you cited the 8x daily rate.
You're probably right. I think your hourly/daily billing idea is clever.
> every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors,
Lol, you just put several years of my life into a clear statement. Entirely the reason I don't do enterprise stuff as much unless I'm dealing with high enough decision makers who can clear the path for me (which is not often enough)
What do you think of offering an hour block purchased in advance, then billing that block in daily/weekly increments? Provided the customer is onboard. It may not work for the worst of the worst evil AP departments but might help with the edge cases.
Vendor hazing ritual is a great analogy.