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Project Billing and the Inexplicably Lost Hour

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Dost thou love life? Then waste not time; for time is the stuff that life is made of.” – Benjamin Franklin

If you’ve been involved in the professional services field for any length of time, you know that there are those hours that just seem to inexplicably disappear. Despite a diligent effort to keep track of them, they just…vanish. There are a variety of reasons why this happens, the biggest offender – the “one quick question” on the phone.

We’ve all had that “one quick question” phone call. It usually starts out something like this, “Hey Frank, just had one real quick question for you...” So you have to stop what you’re doing, look up the answer and respond. Then comes the, “Hey, while I’ve got you on the line…”. The next thing you know your one minute phone call has gone for 12 minutes. So who should be billed for that time? It wouldn’t be fair to bill it to the client whose project you were originally working on when you were interrupted, and it’s not easy to bill 12 minutes increments in a lot of systems. So you end up writing off 15 minutes of time. Not a big deal? It’s only 15 minutes in a 40 hour work week. But if you have 4 of those calls in the course of a week you’ve lost an hour; in a month’s time, 4 hours.  In a year, 52 hours. If you bill your time at $100 (for the sake of easy math) you’ve lost $5,200. The scary thing is, 4 calls per week is a very conservative estimate for most consultants. So what should be done?

Set Expectations

Set the expectation from the onset of the relationship! If you are speaking with me, I’m billing you for my time - it’s that simple. I once had a friend who was a criminal defense attorney. On the credenza behind his desk he had an old-fashioned New York taxi cab meter installed. He used to tell his clients, “When you hear this noise,” as he pulled down on the handle it made a loud CA-CHUNK CHA CHING noise, “it means I’m billing you for my time.” Each time you called his office and presented him with a question, he would preface the conversation by saying, “oh, wait…hold on…” CHA CHING!  “…you were saying?” Was this rude? Without a doubt! Was it unprofessional? Absolutely! Was it highly amusing to sit in his office and listen to him take a call and hear CHA CHING ringing down the halls of his office complex? Unbelievably! But, it set a precedent and an expectation with his clients. His clients had a very clear message that his time had a value and they would be billed for that. Now, I’m not suggesting that you install a taxi meter in your office; but I am suggesting that you set the expectation with your clients that if they’re using your time, they will be billed for it.

Keep Tabs

The more accurately you track your time, the less likely a client is to question it when they receive the bill. In nearly 20 years I’ve never heard a client complain about too much detail in a billing statement. Tracking your time takes effort, and for this reason, it’s fairly important that you have a good system to automate this task as much as possible.  A time reporting system should make it easier to capture activities as they happen, which eliminates the need to go back several days later to “reconstruct” what has been done minute-by-minute on any given day. Keeping track of hours real-time also prevents that “uh oh feeling” at the end of the week when you realize just how much of your time ended up being non-billable.

Ideally the system that’s used to capture time and attendance information should be seamlessly integrated with planning and reporting applications. Our organization uses and implements Dynamics AX which has all of these features built into it. We also have a mobile application that simplifies time and expense reporting when working remotely.

When in Doubt, Ask

There are times when you’re working on a project and it is unclear whether a certain block of time should be billed to the client. You may think, well it’s only 15 minutes and I shouldn’t bill it. In point of fact, you may be right; but it never hurts to ask the project lead if you’re unsure. Having a larger view of the project, they may be better equipped to address the question of whether something should be billed based on the overall project status.

If you are acting as the project lead, you should be keeping an open line of communication with the client. Always make sure that all inquiry calls are included in the project or that a change-of-scope authorization is completed to avoid headaches at a later point.

 Know Your Target

It’s always helpful to have a goal. If the goal is to bill 30 hours per week, you should have a pretty good idea by the middle of the week whether or not you’re going to make your goal. Having a system to track hours real-time can also help keep you on track to reaching your target.

Having that goal in the back of your mind can be a great way of reminding yourself to keep in “billable mode” as much as practicably possible.  Until next time...keep billing!

by Solugenix, Tennessee Microsoft Dynamics AX Partner



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