Tips: Now is the time to plan for your busy season – adjust rates and billing practices

planningThe approaching end of the year represents a time when we should all start to come into the busier time of our business.

The last half of the year is traditionally when companies are upgrading their accounting systems or thinking of starting projects that are intended to improve their reporting.

Now is the  time when you should review the rates you’re charging to clients and consider changes – in advance of the busier and hopefully more billable year end. Since all of our costs tend to rise from year to year – it is only fair that your rates should rise as well.

With that in mind, I have several suggestions about billing that have worked exceptionally well for me (aka clients don’t complain or question).

Implement these today and I’d be surprised if you could not start increasing your bottom line $20,000 or more next year.  I’ve implemented these tips myself each of the last several years. I don’t recommend you make a big deal out of it or spend days writing an apologetic letter about how the economy sucks and you’re “forced” to make a “small” adjustment to rates.

Just “man or woman up” and get in there and adjust your billing practices. In this economy there’s no room for bashful billers. Here’s my four tips that will work for you – because they’ve worked for me!

Four Tips To Increase Top Line Revenues In 2010

  • Only bill in whole hours
  • Remove the hours from  invoices – clients only see a description of work and the fee (nobody has asked to see detail). This moves you away from the “time and material” model and opens up capabilities to value bill.
  • Adjust rates and annual phone support plan fee structures without making any lengthy letters or pronouncements to clients (hardly anyone questions this).
  • Send non-billable invoices on yellow sheets of paper marked “do not pay” for support incidents that are no charge under my phone plan. I use a higher rate to show the client what they would have to pay me (roughly double the hourly rate) if they were not under my phone support. This is a HUGE eye opener over time. I make certain we “invoice” (remember this is on special colored paper market non-billable plan benefit) for every quick question and email to drive home the importance of OUR phone support. This way if a client says they want to cancel or don’t see the benefit then we can pull the last year’s worth of non-billable support invoices and show them the benefit.

Make New Orphan Clients Put Some Skin In The Game

As some of you may know, I also do not take on clients who refuse to join my own telephone support plan. We see an increasing number of Internet visitors who appear to be looking for this type of relationship and I found many years ago (when I used to take on people hourly) that almost universally these types of Internet visitors were one shot deals that I never heard from again.

4 Replies to “Tips: Now is the time to plan for your busy season – adjust rates and billing practices”

  1. You’ve made several excellent points. We raised our rates at the beginning of the summer without fanfare. My partners were very concerned that this should have been announced in advance. I countered with one question. “Have you EVER received such a letter from a plumber, electrician or an attorney?” Both partners told me I would have to field the phone calls. Guess how many I got? That’s right – zero.
    I do have a question about hourly billing, do you always round up or do you round down as well. When I think of all the .25 hours I’ve billed I know that writting it up and invoicing it took almost an hour by the time I was done.

  2. I bill in whole hours and always round up.

    Never have had a question about his (as you’ve pointed out).

    I’d also stress that we do not do hourly billing for phone support. The whole question of how to convert existing clients from hourly to annual support is a question that I think is outside the scope of this article but I’ll tackle it in another.

    Most of our billing for project work is done hourly.

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