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I don’t know if in your business you typically charge hourly or by the project, but I imagine it’s likely a policy decision you’ve wrestled with.
While many creative professionals such as graphic designers and writers charge by the project, more traditional professions such as law and accountancy tend to favour an hourly rate.
This latter category would also include bookkeeping services, something that my company provides. We tend to be unique in this industry with our fixed price billing model. I feel it’s not just to our advantage to use this pricing policy, but more importantly it’s to our client’s benefit as well.
No unexpected billing surprises.
If you are billed by a fixed price then that is what you pay – the fixed price. There are no billing surprises once the job is complete. Regardless of when you’re billed – weekly, biweekly, monthly – you know you will pay exactly the same amount each time. If your service provider takes more time doing the project, that’s a problem for them, not an added expense to you.
Better for your budgeting.
When you know the price going into an agreement it helps your budgeting. Again, whether it’s a one time project or ongoing, you can easily plug the number into your budget forecast knowing the number won’t change. An hourly arrangement could change and can easily fluctuate from billing period to billing period. To you a fixed rate equals a fixed cost and it’s so much easier for both short and long term budget projections.
You don’t get nickel and dimed.
Have you ever received a phone call from a supplier like this: “Okay I’ll answer your question, but you know Marsha, this call is going to cost you?” Don’t you just hate hearing that? Who likes to hear the clock ticking every time you make a phone call or type an email to your supplier knowing that the clock is ticking and it’s going to cost you more? With a fixed rate, you know that every communication isn’t going to be added to your bill.
Fixed Rate May Cost You Less.
Sometimes an hourly rate may appear cheaper, but it can often cost you more. If you are being billed by the hour and they aren’t very efficient – who pays the price for that? You would. A fixed rate billing model encourages us to always find the most efficient and affordable way to work. This almost always results in better and faster results for our clients.
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