Articles

Getting Time on Your Side

Billing What You Quote

"I don't need to track my time because I always bill what I quote". Lots of creative companies feel this way. The argument goes something like this: "We quote what we think the job will cost. Sometimes we put in just a few hours and collect the whole fee. Other times we spend a lot more time on a job than we thought we would. We still collect the same fee. It's what our clients expect."

We understand where these firms are coming from. Tracking time for each task is something almost everyone despises and avoids. It's easy to find reasons to avoid it, too. There's always something more pressing and immediate than a timesheet: deadlines, presentations, meetings and the concentrated creative time that each job deserves. Companies that bill by the hour, of course, have a problem. If they don't track their time, they can't bill for it.

We believe that EVERYONE should track their time, whether they bill by the hour, by the job, or by a flat monthly fee. What we are all doing is selling our time. While other factors affect the price we can charge (prevailing pricing in the market, past billing history with clients, etc.), time is what we're really selling. Time is the raw material we use to create our product or service. If we don't know how much the raw material costs, we can't price the product properly.

Does it make any sense to consistently accept and work on jobs where, at the end of the day, the hourly equivalent is less than $25? Of course not. You would end up paying your clients for the privilege of doing their work! Tracking your time is the only way to compare the hours you spend to the profits you earn, so you don't give your valuable time – and work - away.

Tracking time may be especially important in a company that bills to quote, because without an accurate idea of how many hours the job will take, it's unlikely that the quote will cover the costs. These firms should be saying:

"I NEED to track my time because I always bill what I quote."

This article has been provided by FunctionFox. For more information, or if you have a resource that you would like to share, please contact us at info@functionfox.com. Please visit the resources page on our website for more industry tips!