Here’s How We Roll

I just received an inquiry from a fellow Sage Business Partner who I’d met last year at Sage Insights (the annual partner conference).  The request he has mirrors one that another partner asked last week.

In the interest of time — and figuring if two people have the same question then probably more do as well — I will share my answer to the following:

Hi Wayne
We are a MAS90 partner in _____. I have met you at Insights in the past but I am sure you meet a million partners.

Have a question about what you use to track your time and invoice your customers? We have used TimeKeeper with ______ for a long time but have some problems and so thought maybe if there is a better option we might consider it. We still have not moved to Ed’s value pricing so rely on tracking time and invoicing it. Any thoughts you have on this topic would be great.

As luck would have it — I do have some quick thoughts. Here’s how we roll…

Over the last year we’ve moved entirely to fixed price billing. This is the method where we take the approach that our customer should know the price prior to our starting the work – and that the price should be defined based upon an agreed upon description (scope) of the work.

It’s been a huge learning experience – however the pricing method by far is fairer to customers than anything I’ve seen. No longer does a customer have to look at the clock when our employees enter their offices — or worry that a difficult problem could incur significant surprise cost over-runs.

Here’s how we’ve changed in the last year to accomodate this fixed price billing:
We use Freshbooks — and moved to Ed’s fixed pricing shortly after Insights.

It’s a struggle and there are lots of lessons that you learn along the way. However I’ve found that overall it’s an easier system than tracking time and arguing about every 1/4 hour that a client wants (not) to be billed for.

The easiest transition to the fixed price is to run with the three options – where the lowest option could be the one where customer does most of the work — and your higher options are where you do more of the work.

Surprisingly clients will often pick the higher priced option. Just don’t price option one as bare bones so that you regret it if they pick it.

Freshbooks = Billing (and it will send out estimates via email for approval) — we no longer send out paper invoices (this was costing us $60 per month). We don’t use the feature but Freshbooks will also allow you to offer online CC payments for clients to click and pay on your invoices.

Basecamp = Every project is setup in Basecamp for tracking of projects and collaboration. We have also started to use Highrise for CRM since it’s all integrated and there’s no comparable Sage offering.

Google Apps = Setup all your quotes in Google Apps as templates. We have a 10 page boilerplate proposal for upgrades that we developed over the course of a few tough upgrades. Since you usually don’t want to take three days to review and quote an upgrade — only to have the client reject it — setup a good upgrade proposal that explains what is and isn’t covered by typical upgrade quotes.

We also use a simple chart that shows us depending upon the version that the customer says they’re moving from, # of users and other factors (custom reports, forms, etc) what the estimated $ would be. We make this proposal via email before going to a formal quote.

6 Replies to “Here’s How We Roll”

  1. We have adopted almost the exact same approach with the exact same software. We still use MAS90 for our billing and accounting instead of FreshBooks. Once in a blue moon we do an hourly engagement to our clients that have been with us for years, but it is very much the exception. It really is freeing for the customer and the consultant.

    I do wish I could do a better quote template for the upgrades though. Mine is no good at all. We also use Google Apps, but haven’t really found a way to do a good quote there. Are you using the spreadsheet or word processing withing Google Docs for this? We use iPads so I use Keynote, Pages and Numbers and upload most to Evernote, but the Pages and Numbers, aren’t cloud so I am not 100% happy with that. I would love to hear the app you use for that. Thanks!!

    1. I use Google Apps — save my upgrade quote as a template and then for each time I need to generate a quote I fill in the specifics (here’s a copy – ).

      I’ve started to quote upgrades to users who are not already our clients via an email boilerplate.

      I use TextExpander and have filled in the template as:


      March 8, 2011


      Here’s a summary of our fixed price for the work we discussed.

      This quote is valid through: MM.DD.YYY. After that time please contact us for an updated price.

      Work will only be performed within this timeframe.

      Start of project: START.DATE
      End of project: END.DATE

      After the ending date of this project any additional work will be considered a separate project.

      WHAT WE’LL DO (The Scope of Work):
      Services to be provided: List some details of what you will provide — this tends to be very basic for email quotes and if the prospect agrees we go to full proposal.

      The project is complete when we deliver the work described above. You’ll have three days after delivery to bring any issues to our attention (an extra fee applies to changes in the project scope – corrections to items under scope within three days are no cost).

      Because we fix our price based on the services you’ve requested any changes to the scope require a change request and additional fee. You’ll also have a chance to approve this prior to incurring any costs.

      No work can be schedule prior to receipt of payment. All dates are estimates and subject to change prior to receipt of payment.

      Our price is fixed for the services outlined above. Costs (if any) of software, maintenance or third party support plans is not included.

      We offer a full 100% money back guarantee for 30 days from project completion.

      Price: $ 10

      1. A couple key learning points:

        1. Engagements must have a deadline — for when they are accepted, begin and finish.

        The BIGGEST problem we’ve had is not technology — but customers who take a quote and come back six months later thinking that if they send a check they can start their upgrade that afternoon. I’m not kidding. This is happening over and over.

        The other timing issue we have is customers who finish the upgrade and are going to “check some things later”. Fast forward 9 months we hear back that “such and such” never worked right. We provide all engagements with a final meeting where we mutually draw up a FINAL list of open issues to be resolved. Then we resolve them. Issues outside of this are considered separate projects. If not managed properly these “simple” upgrade engagements will go on forever…

        We also now price our engagements with a start/stop date “window” — we’ve had more than a few customers take our quote and pricing and then put the work on hold. We’ve quoted them a rate that might be specific to the slower summer months …. guess when the customer re-appears….. yeah – they come back during year end (December/January) inquiring about “when are we going to start” …..

        Use deadlines, date ranges. Probably my biggest takeaway in 2010.

        2. No dates are “held” until a check is received. No exceptions. If I had $1 for every person who asked me to pencil in a date and then I was waiting at 4pm the day before we were supposed to go on-site to see if they still wanted to begin (because we hadn’t received a check). It may be harsh but our policy is that the receipt of your check is the acknowledgement that you want to retain us (this applies mostly to non-clients who find us via the Internet or clients we haven’t heard from in a long time).

        3. Provide email initial quotes — and use a chart for typical ranges. This is especially helpful for upgrades. That is unless you enjoy spending a full day logging in remotely and providing (free) feedback on how a customer can use your data to go get a better quote from a preferred provider. Again, this is mostly for those inquiries who are not already our customer. The vast majority of web inquiries are people looking to satisfy themselves that a quote they are about to sign isn’t too expensive.

        4. Scope, Scope, Scope. We setup a category in Basecamp for post-upgrade (or post-project) extras. I tell everyone that once you touch a “quick” problem that someone asks you to fix which isn’t within scope that you are then taking on: a. fixing it, b. warranting it and c. repairing it in the future — all for free….

        Some of these things seem unduly harsh – and in reality we have some leeway in how they’re applied. Existing clients receive lots of exceptions. People who we don’t have a prior business relationship — typically no exceptions and the vast majority of them just go onto the next name they find in a Google search until they get a free answer (or find someone who will bill them in 2 minute increments at $50 an hour).

        Another thing I’ve found with free quick questions — is that if you get into the habit of providing free support you get what amounts to a pack of stray cats who keep coming back to you — but only so long as the advice is free. As soon as you turn the meter on (or even mention a fee) these cats disappear and go find the next house that has a plate of food on the front porch.


    2. I’ve also found that Google Docs is invaluable for creating free and easy to distribute forms that prospects can complete. We receive a lot of inquiries via the web. The vast majority are merely kicking tires and gathering a third bid for their boss. Rather than stop what we’re doing for an hour or two (believe me by the time you start and stop with these inquiries and answer quick questions an hour passes very fast) I’ve developed this form.

      I created it in Google Docs and all the answers are compiled into a spreadsheet. Whenever a prospective client submits information I’m instantly notified so I can response. This helps make the information gathering (version of software, who is the business partner, why are they looking) much easier and helps to qualify prospects since only serious prospects tend to take the time to complete our form.

  2. At our firm, we’ve been sold for some time on moving away from hourly billing to a combination of fixed price for all implementations and upgrades and service agreements for all clients.

    It’s been good to follow the open discussion on this issue led by Wayne and Ed Kless.

    It has been challenging to say the least transitioning to the service agreements from doing ad-hoc hourly consulting and support and we are some way from being where we want to be in this regard.

    Structuring pricing models that are both ‘sellable’, profitable and simple to calculate for any particular client is my current challenge.

    One system that has been particularly beneficial in the last six months is a Quoting application called Quosal. It is particularly flexible in working with Word based proposals.

    I’ve itemised almost every discreet service offering and entered in Quosal with product code, short and long description and price. This has given me a consistent suite of services to pick for a quote/proposal which I can add to compliment any products that are also required. These then merge into the appropriate place in the Word document.

    Added benefit for us is that it links to Sage ACT!, which is our main offering. It will also create a Sales Opportunity, as any good Integrated Quoting system should. It also works with SFDC and a few other CRM platforms.

    1. Darren I found that once I went “all in” that fixed pricing became much easier (though still not always easy).

      That means –

      – For upgrades of software we’ve developed a quick standard schedule of fees (hat tip to Mike Fitzgerald at Net@Work for turning me onto this idea) which segments the type of client by number of users, complexity. That means for adhoc inquiries I can quickly quote a “starts at $ xx ” price and quickly gauge interest.

      Under my old method I’d schedule a login (figure at least an hour plus the prospect asks LOTS of consulting type questions that have value) — then I’d spend another two hours preparing a custom proposal. Upon delivery I found that the vast majority of online inquiries disappeared because all they were looking for was verification of a bid they received from their preferred provider.

      – Develop templates to cover as many situations as possible — this is for efficiency as well a a GREAT aid in helping you stick to your pricing methods. When I first started pricing fixed engagements if the engagement was complex and I was busy/not able to immediately give a quote then I fell back on hourly billing. Once I developed templates (most of these are done via email) I had a way to quickly provide quotes (very key).

      – As mentioned earlier we’ve moved all our project tracking to 37 Signals Basecamp. Each and every engagement is a separate project. Make tracking multiple projects MUCH easier (I think we have 30 open at the moment and under our old method we’d be tracking much of the action items on paper…)

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