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Jul 3, 2013 by Patrick Icasas in Project Management 101 & Tools

6 Habits of Effective Hourly Billing

6 Habits of Effective Hourly Billing

Proper timekeeping and hourly billing is vital to project success and good client relations, yet many project teams still struggle to get it right. I’ve encountered task breakdowns written in obscure shorthand that are impossible for the client to decode, and others so sparse they may as well not have been included at all. Clients questioned these billing statements all the time, and with good reason. They could never be sure if they were getting their money’s worth!

Here are some useful tips you can use to ensure your clients get hourly billing statements that they’ll be happy to pay:

Timely Time Logs

It’s best to log your time and fill in the details right after the task, while memory is fresh. If that’s not possible, then end of the day is the best compromise. The longer the delay between the task and your logging time, the bigger the chance of you giving inaccurate details. Even jotting down a quick note on a scrap of paper can save you tons of aggravation (and save the client some money).

Keep a Backup Log

Cloud hosted project management software is great, but things can still go wrong even so. Backups of all your project data is a good idea (and should be SOP), but it’s also useful to keep your own personal logs as an additional reference. In case you need to refer to something in the middle of a meeting, for example.

Audit Regularly

I’m not talking about auditing for inflated billing (although that is a good thing to watch for), but rather project efficiency. Should that task take someone that long to complete? How long would the same task take if it was given to another? Is there a way the team member can do the project faster? Every half hour of spare project time you can scrape together is a half hour you can assign to a different task.

Keep Detailed Descriptions

Clients find vague task descriptions annoying. They offer no helpful information, and create more work for you, the PM, because you have to follow up with the team member and ask what exactly was done. Which do you think they’d rather pay for: a task that says “research,” or one that says “researched worksite zoning laws?” Just three extra words make a world of difference.

Itemize Tasks

If you’re logging your time at the end of the day, it’s tempting to lump all of your project time into one block and dump all of your tasks into the same description. You know what I mean: “9am – 11am: created login page, fixed bugs, set up database.”

Don’t. The client is going to see this as disguising inefficiency, and they’ll be right. How do they know how much time you really spent on bug hunting? Are you trying to hide the fact that the project is buggy? Itemize your tasks for more transparent billing, and the client will have less reason to doubt you.

If you can offer the client transparent, accurate breakdowns of where the project budget is going, they’ll feel better about compensating your team for their hard work. And while they won’t enjoy the idea of going over budget, having detailed hourly logs will make it an easier pill to swallow.

Image credit, Flickr, Margarida Sardo

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Patrick Icasas

Patrick Icasas is a former marketing project manager with 7 years of marketing and PR agency experience, managing creative projects for brands such as Nokia, Verizon Wireless, and Adobe. He now spends his time helping people make the most out of their project management software and entertaining his 5 year old daughter.

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