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Say a client wants to add something to their extranet webapp which I'm renting out to them. For any customization, I charge an hourly fee. Do I just give them how many hours I worked?

New feature X added to intranet webapp
Billed time = Total 3 hours and 5 min

Or do I need to break it down and list:

New feature X added to intranet webapp:

1) Changed database schema - 30 min
2) Optimized 5gb databse file - 5 min
3) Edited PHP files - 2.5 hours

Billed time = Total 3 hours and 5 min

How does everyone else do this type of billing?

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3 Answers

up vote 5 down vote accepted

I used to do this type of work and I suggest itemizing what you did, but only at a high level. These are usually the points that you discussed with them in detail. That is, you didn't say I am going to change the database schema, but you would have said something like I will implement feature x.

So your bill should be more like:

New feature X added to intranet webapp

Billed time = Total 3 hours and 5 min

It is likely your customer is only interested in what they requested. Only go into detail if they ask you for it. For most customers they are either too large to care about details or don't understand the details, especially when it comes to the invoice.

If it's a small business and you have regular contact it's more likely you can go over these points in discussions either before or after implementation..

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1  
Itemize it. But make sure to charge them a little bit extra for pizza money! When i itemized i would always round up to the nearest half hour. So SQL Updates, 30 minutes (when it only took 5), IIS backup 30 minutes when it only took 7 mins. This is standard for my clients. They bill their clients the same way when i was freelancing (my clients were mainly professionals, lawyers, accountants, fin planners) Make sure to value your time, the actual time you spend phsyically and the time you spend learning, planning, and caring about a job. – Frank Oct 29 '10 at 5:07
4  
Franky, should be important to note that rounding up to the half hour should only be done with the higher level tasks. Otherwise you could decompose a 1 hour task into 6 ten minute tasks, which each round up to 30 mins, giving you 3 hours charged. It's important to also not burn your bridges :) – Adam Oct 29 '10 at 13:07
Great point, I usually used to do low level tasks as a bucket. And make the client understand the billing process so they dont ask for small 2 minute changes. Always support and consulting was free – Frank Oct 31 '10 at 16:56
up vote 1 down vote

5 min? You carrying about this short things? Get only in hourly rate like 2,3 or 4 hours not 2,5 or 2 minutes.

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4  
I agree. I would round that down. I normally bill in 1/4 hour increments. – Martin Oct 29 '10 at 12:43
Same here. Rounded up to 15 minutes. – NetTecture Oct 29 '10 at 12:44
up vote -1 down vote

It's an hourly rate. In your case I'd put 4 hours.

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really? Charge 4 hours for 3.1 hours of time? That sounds like a bad policy. – TimJ♦ Oct 29 '10 at 13:36
2  
Remind me never to send work your way. If you charge an hour for 5 minutes of work, I'll question your efficiency and accuse you of wasting 2 hours for the purpose of increasing your billings. – Elie Oct 29 '10 at 15:35
At least it adds some time to do some extended testing. Everyone knows there are better ways to do some procedures and usually there's time only for the quick solutions. Plus, I usually work for corporate clients so it isn't a big deal for them. – Vergil Penkov Oct 29 '10 at 18:01
Vergil, the ethics of this are extremely questionable. If you need to do more testing, then do it and bill accordingly. But if you only actually worked for 3:05, then you have not done that extended testing, and therefore are over-billing. Also, even if it "isn't a big deal" for the customer, that still doesn't change the ethical correctness of what you're doing. – Elie Oct 29 '10 at 18:32
By not being a big deal, I actually meant any of my customers would prefer paying for an extra hour just "to make sure" they get exactly what they want, bug-free. While the ethics might be questionable, did you see any mentioning of "testing" in the first post? Because you'll usually see a "quality assurance" person involved in your contract, and testing is a part of his work. So his activities should be mentioned as well. – Vergil Penkov Oct 29 '10 at 20:07
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