Prorating hours...yay or nay?

[Smola]

I have a client who only wants tiny updates here and there that take under an hour to accomplish. We have no formal agreement that either one of us has signed but we have agreed on an hourly rate. I got the job through an old high school friend who works for my client, and he is the person who gives me the jobs through his boss. He recently asked me to do something that might take a couple minutes and so he thinks writing a check for "a couple of bucks" doesn't seem worth it.

I haven't responded but my first inkling was to say that anything up the first hour would be the full hourly rate. I usually keep track of hours after that in increments of half hours. I was curious as to some of your policies when it comes to prorating an hourly rate. Is it wrong of me to want the full rate for the first hour?

[Shyflower]

I have a minimum project fee for every project. In my agreements, I call maintenance, etc "Project Extensions". Although I don't require a deposit on an extension, I do still set a minimum amount and invoice accordingly.
My agreements say:

. Unless negotiated otherwise before project acceptance, short-term projects are invoiced on completion and long-term projects (those over 30 days) are invoiced monthly.

So I wouldn't invoice one hour for a quick fix, but I would keep track of the time worked over the month and invoice at the end of the month for the total hours.

I believe some web developers set a standard maintenance rate for sites they have built. If you are doing on-going maintenance, you might want to consider that route.

[Smola]

Thanks for the input and advice!!

Anyone else care to chime in as well??

[sonjay]

I bill in 15-minute increments for maintenance work. Send me one quick change that takes 5 minutes, you get a bill for 1/4 of an hour. Send me several quick changes that take 15 minutes, you get a bill for 15 minutes.

It encourages clients to consolidate minor changes into batches, and helps rein in those clients who would send me 8 or 10 emails every day asking for 1 quick change each time.

he thinks writing a check for "a couple of bucks" doesn't seem worth it.

Likewise, doing work for nothing doesn't seem worth it, nor does doing work for "a couple of bucks." Hence, my 15-minute minimum.

I do, of course, cut some slack to good clients and don't charge them for every single little change, if they're usually good about sending changes in batches.

[LiquidReflex]

I have a 1 hour minimum for any maintenance work requested. If it takes 55 minutes, you are billed for an hour, if it takes 6 minutes, you are billed for an hour. That is the "rule" ... but for every rule, there is exceptions. A good client of mine that calls up and wants me to change the price on one page (which would take me a matter of seconds) will not be billed for an hour. If someone found me via the internet and asked me to do a "quick fix" for them, there would be a minimum 1 hour, no matter how long it took. After the initial 1 hour minimum, then I will bill in 15 minute increments.

The other option is a monthly maintenance package. The client can purchase a set number of hours each month (billed in advance, usually at a discount) which would allow them to request changes periodically through the month and have the time deducted from their allowance. For maintenance agreements, all work is counted via 15 minute intervals.

If you are noticing that they are continually feeding you small changes throughout the month as well as month to month, you may want to bring up a maintenance arrangement. Sounds like that would be your best option. However, I would definitely have a minimum (and bill for small changes just the same). One reason I have found the 1 hour minimum works for me is because it does keep clients from impulsively calling / emailing multiple times with single changes. If they are billed 1 hour for every email they sent with 1 change, they will realize very quickly that it's not a good idea. Instead, they will go over everything and request all of the changes at once.

Your time is valuable. You only have so many hours in the day. If every client you had just wanted a free 5 minutes here, a free 10 minutes here ... you will find your billable hours in the day will dwindle pretty quickly.

[Sagewing]

That really isn't pro-rating, that's just incremental billing that you are asking about. Like the above post suggests, set a policy but be flexible for good clients. My minimum bill is 15 minutes for clients that I like, and 1 hour for clients that I want to keep at arms length.

[maartenvr]

I work with minimums as well. 5 minute jobs are killers for productivity.

[Fergal]

Are the tasks urgent? Would it be possible for you or your client to batch the tasks and complete all minor tasks say once a week or once a month? That might help both of you.

You could also ask your friend, in the client company, if the company has a budget for paying for these changes.

[clnewbill]

I too keep track by the minute and invoice for the total at the end of the month. In most cases, I just add up the minutes and round up to the next quarter-hour: 27 minutes = 0.5 hour, 47 minutes = 1 hour. In the case of certain pesky clients, each request is billed as a quarter hour minimum: five separate requests during the month totalling 36 minutes would be billed at 1.25 hours.

I like Sagewing's approach, too. I have a few of those "arm's length" clients.

[beley]

Because of all the legwork and overhead involved in doing one task, I think it's probably best to have a minimum. With a minimum of 1 hour, clients typically just wait a while and put together a list of changes to all be done at once. It works better for everyone, because you don't get 10 phone calls for 5 minute changes, you get one phone call with an hour's worth.

And as you grow you'll realize that billing out 10 or 15 minutes here and there will start to drain your productivity. You not only have to spend the time sending out all those invoices, but you have to chase down the clients when they're late. If you end up spending 30 minutes collecting on a 15-minute invoice, you've lost money!

[ccburns]

I am firmly in the nay camp. I believe that setting strict rules for your time is particularly important to your business' profitability. I have been in the boat where I have been asked to update a website which will take about 5 minutes. How do you charge for that?? It will cost you more to actually raise the invoice.

So I suggest before any changes are made you explicitly tell the client that a minimum of 1 hour is charged for any work that you do for a client. You should also suggest to them that they should batch their changes so that you can make the changes it one time to ensure the most cost benefit Often with 5 minutes jobs the client does not pay enough attention and won't provide you with all the information that you actually need. This then leads to an email (another 5 minutes) plus another bit of work which takes another 5 minutes. Unless you are particularly good with tracking your time you would have just lost 10 minutes plus the additional loss of productivity either side of the mini-tasks.

I suggest a minimum billing period of 1 hour at your normal hourly rate.

At the very least you should batch all the tasks and send a single invoice at the end of the month, but please consider the first option. This might sound funny but clients need to be trained to understand the way that your business works. It's your business don't let them dictate the terms to you.

Kind Regards,
Colin

[jdog]

Hi,

I'm in the yay camp. It all comes down to service. Yes, we do 5 minute changes for clients, but if that would be the only change in a month, we would charge them for 10 minute invoicing as well. They are buying our time and we make every effort to use it efficiently. For example, we force hosting payments to be automatic payment or year upfront.

HTH, Jochen