TweetFollow Us on Twitter

Show Me the Money

Volume Number: 27
Issue Number: 02
Column Tag: Business

Show Me the Money

Suggested billing practices for consultants

by Ronald Gehrmann

The title of this month's column, lifted from an exchange between Tom Cruise and Cuba Gooding, Jr. in the film "Jerry Maguire," nails the bottom line for a self-employed consultant — you've done your good work and you need to be compensated. And let's not forget how crucial cash flow is when you're a sole proprietor.

As an Apple Consultant, I've seldom worked for corporate clients, and never in the long term, so I have no experience with arrangements such as retainers, pre-payment for blocks of time, purchase orders, or setting payment terms.

Dealing with home and small-business users occurs at a much smaller scale. As opposed to a consultant working with a handful of large business clients, your income base is comprised of many more "small fry clients," and dealing with the sheer number and variety of client situations can be challenging. But on the flip side, if you like people, it can be a delight to mingle with so many different personalities and systems. While there are many different ways of billing home users, in this piece I'd like to share with you thoughts about what works well for me, in the hope you might find it useful.

The value proposition

The foundation for a successful client relationship, and for getting paid, is when the client feels that they are getting enough "bang for their buck." Nobody wants to pay for something that doesn't seem "worth it" to them.

When I receive an initial inquiry by voicemail or email, I explain in my first email response that I can address the prospective client's needs and what my rates are. This way, if there's any question later on, especially regarding my rate, I can always refer back to this written information, rather than relying solely on verbal arrangements. I also briefly describe my areas of expertise, opening the door for providing services that go beyond their immediate need.

If a prospective client replies that my rate is too high, it doesn't bode well for a good relationship. If at that point "my spider sense is tingling," I'll try to recommend a consultant with a lower rate (if I know of one), or direct them to Craigslist or other possible alternatives, and wish them the best of luck. If it seems that this prospect could become a long-term client, I may offer them a slightly discounted introductory rate in the hope that they'll be so satisfied with my work that they'll subsequently be willing (perhaps even happy!) to pay my regular rate. Knowing which clients to let go of and which to keep is an important intuition to hone. There are always surprises, however! Some of my favorite long-term clients are ones that initially fell into the category of "you couldn't pay me enough to work with this person."

Depending on the geography, transportation options and other aspects of your market, you may want to charge for travel time. While building my consulting business when I lived in coastal New Hampshire, serving clients within a radius of about an hour's drive, I charged travel time at half my hourly rate.

Working on-site with clients in Manhattan and parts of Brooklyn and Queens, where public transportation is quick & easy, I don't charge for travel time, however I do have a two-hour minimum for on-site sessions. If people balk, I explain that they'd be surprised how quickly two hours can fly by (and how much they can benefit from two hours of troubleshooting and/or tutoring), and that if they don't use up the full two hours, any remaining time is credited towards support by phone and remote screen sharing.

Cash on the barrelhead

If, during initial contact via phone and email, a prospective client seems legitimate, I will tell them that payment by check is acceptable. If I have any doubts, I'll request cash payment for the initial session, with the understanding that payment by check will be fine for subsequent sessions.

I also accept payment via credit card (by way of PayPal), but generally prefer to avoid the hassle of adding the PayPal fee on top of my invoice amount, then transferring the incoming funds from my "sandboxed" PayPal bank account to my regular business bank account.

In any case, I make out an invoice at the conclusion of the session and payment is due at that time. I write the invoice in longhand on a pre-printed form, and when I'm back at my office I enter the details into QuickBooks. This avoids all the administrative overhead of later generating an invoice, emailing or snail-mailing it, keeping track of receivables, and possibly needing to send out statements and reminders.

For those home users whom I see multiple times during a month, and if I know they'll pay on time, I'll extend the courtesy of sending them an invoice at the end of the month, with payment due on receipt. Because I take great care to establish a trusting relationship with my clients, I've not had any problems with non-payment.

Detailed invoices help document your services rendered

In keeping with my effort to educate the client about the value of what they're paying for, the invoice I present at the conclusion of a session includes a brief overview of what was accomplished, e.g. "iMac and network setup, data migration, application updates, tutoring." If I'm billing a client at the end of the month for several on-site and/or remote sessions, I try to be even more specific, indicating the date of each session and what was accomplished.

At the end of an on-site session, I always remind the client that I'm available to help them over the phone, either with or without remote screen sharing software (I use TeamViewer; LogMeIn is another popular tool). I explain that phone/remote sessions are billed at my regular hourly rate, pro-rated, with no minimum duration.

The clock is always ticking

When a client calls for phone/remote support (either at a pre-arranged time, or spontaneously), I remind them at the start that they're on the clock, and I let them know at the end of the session how long we worked (I use a timer that's always visible on my screen), and that I'll be adding that amount to my invoice at the end of the month, or at our next on-site session, whichever comes first.

Occasionally, I'll come across someone who chafes at being charged for time on the phone. Yes, sometimes you actually have to "paint them a picture." I explain that they have called with an issue or question that needs to be resolved, and that they have called me because of my expertise, and that after I provide the solution to their problem, why would they possibly assume this would be a freebie.

My time is my service. I do not sell hardware, and cannot "throw in" free phone support. Offering my expertise is how I earn a living. If I am giving away my time for free, I'm not putting food on my table. Furthermore, if one client expects me to working with them for free, I'm not able to use that time to work with a paying client.

Occasionally I've gotten a semi-snarky comment that with by billing phone time "you're just like a lawyer," and if that analogy helps them understand the concept, that's just fine.

To be sure, if I'm working with clients on a long-term basis, I'm flexible and will at my discretion throw in some on-site or remote support time at no charge. It all depends on the relationship I've developed with a specific client.

Why should I pay for this?

Who among us consultants hasn't run into a situation where you've banged your head against a problem for an hour or more, and despite all your expertise and resources, you can't fix it. This is not your fault — due to circumstances beyond your control, the hardware or software problem cannot be resolved. How do you deal with billing a client when at the end of the session, they are still at square one?

The best way to avoid a situation like this is through early prevention and detection, i.e. based on your expertise and comfort level in stretching your envelope, only take on clients and jobs where you don't see major red flags.

That said, the unexpected can and will occur. Some consultants have a written contract/waiver to cover situations like this, but I've never used such a document. Instead, when going into a situation that may not turn out 100% successful, I try to manage the client's expectations beforehand, verbally and by email. For example, "We don't know why your Mac isn't booting, but I can try specific diagnostics and troubleshooting techniques that within a short time will either fix your Mac or let us know that deeper expertise and/or hardware repair is required. But even if we're unsuccessful, I'll need to bill you for my time diagnostics."

Another key strategy is to not proceed too far down the rabbit hole of troubleshooting without apprising the client of the situation. Instead, for example, spend half an hour on a first round of efforts and explain what'd need to be done next, and how much time it might take. A client who has approved work beforehand is more likely to pay for that work, than one who is asked after the fact to pay for several hours of work they didn't even know was necessary.

Month-end bookkeeping and follow-up

By the end of the month, the bulk of my billing is already complete, because most clients were invoiced, and payment was received, at the end of each session. What remains at the end of the month is for me to tally up my timesheets for clients with whom I've worked remotely, or those I've agreed to bill at the end of the month. Based on the timesheets, I create invoices (with semi-detailed, line-item descriptions of services rendered) in QuickBooks and email them to my clients, noting in the subject line: "Metro MacSupport - December invoice - due on receipt - PDF attached."

A couple of weeks later, I re-send the invoice to any stragglers, making a note on the invoice so that I can document when I followed up.

Building relationships, building value

For consultants working with individual users at home and in small businesses, I cannot overstate the importance of forging relationships based on trust and mutual respect. It can be rewarding to build that direct connection with a home user, without third parties that might be involved when working in a corporate setting.

Open lines of communication are key to maintaining good client relationships. If you're clear about the value of your work, and can achieve success most of the time, the home user will be happy to pay you for your services, as they'll want to ensure your willingness to work with them when they need you in the future.


Ronald Gehrmann (help@metromacsupport.com) has been a devoted Mac geek since 1988, using the platform as a desktop publisher, web designer, translator, and photographer. He joined the Apple Consultants Network in 2002; as an Apple Certified Support Professional he provides on-site and remote support and tutoring to Mac and iDevice users in New York City and beyond.

 

Community Search:
MacTech Search:

Software Updates via MacUpdate

Duplicate Annihilator 5.7.5 - Find and d...
Duplicate Annihilator takes on the time-consuming task of comparing the images in your iPhoto library using effective algorithms to make sure that no duplicate escapes. Duplicate Annihilator... Read more
BusyContacts 1.0.2 - Fast, efficient con...
BusyContacts is a contact manager for OS X that makes creating, finding, and managing contacts faster and more efficient. It brings to contact management the same power, flexibility, and sharing... Read more
Capture One Pro 8.2.0.82 - RAW workflow...
Capture One Pro 8 is a professional RAW converter offering you ultimate image quality with accurate colors and incredible detail from more than 300 high-end cameras -- straight out of the box. It... Read more
Backblaze 4.0.0.872 - Online backup serv...
Backblaze is an online backup service designed from the ground-up for the Mac.With unlimited storage available for $5 per month, as well as a free 15-day trial, peace of mind is within reach with... Read more
Little Snitch 3.5.2 - Alerts you about o...
Little Snitch gives you control over your private outgoing data. Track background activity As soon as your computer connects to the Internet, applications often have permission to send any... Read more
Monolingual 1.6.4 - Remove unwanted OS X...
Monolingual is a program for removing unnecesary language resources from OS X, in order to reclaim several hundred megabytes of disk space. If you use your computer in only one (human) language, you... Read more
CleanApp 5.0 - Application deinstaller a...
CleanApp is an application deinstaller and archiver.... Your hard drive gets fuller day by day, but do you know why? CleanApp 5 provides you with insights how to reclaim disk space. There are... Read more
Fantastical 2.0 - Create calendar events...
Fantastical is the Mac calendar you'll actually enjoy using. Creating an event with Fantastical is quick, easy, and fun: Open Fantastical with a single click or keystroke Type in your event details... Read more
Cocktail 8.2 - General maintenance and o...
Cocktail is a general purpose utility for OS X that lets you clean, repair and optimize your Mac. It is a powerful digital toolset that helps hundreds of thousands of Mac users around the world get... Read more
Direct Mail 4.0.4 - Create and send grea...
Direct Mail is an easy-to-use, fully-featured email marketing app purpose-built for OS X. It lets you create and send great looking email campaigns. Start your newsletter by selecting from a gallery... Read more

Fast & Furious: Legacy's Creati...
| Read more »
N-Fusion and 505's Ember is Totally...
| Read more »
These are All the Apple Watch Apps and G...
The Apple Watch is less than a month from hitting store shelves, and once you get your hands on it you're probably going to want some apps and games to install. Fear not! We've compiled a list of all the Apple Watch apps and games we've been able to... | Read more »
Appy to Have Known You - Lee Hamlet Look...
Being at 148Apps these past 2 years has been an awesome experience that has taught me a great deal, and working with such a great team has been a privilege. Thank you to Rob Rich, and to both Rob LeFebvre and Jeff Scott before him, for helping me... | Read more »
Hands-On With Allstar Heroes - A Promisi...
Let’s get this out of the way quickly. Allstar Heroes looks a lot like a certain other recent action RPG release, but it turns out that while it’s not yet available here, Allstar Heroes has been around for much longer than that other title. Now that... | Read more »
Macho Man and Steve Austin Join the Rank...
WWE Immortals, by Warner Bros. Interactive Entertainment and WWE, has gotten a superstar update. You'll now have access to Macho Man Randy Savage and Steve Austin. Both characters have two different versions: Macho Man Randy Savage Renegade or Macho... | Read more »
Fearless Fantasy is Fantastic for the iF...
I actually had my first look at Fearless Fantasy last year at E3, but it was on a PC so there wasn't much for me to talk about. But now that I've been able to play with a pre-release version of the iOS build, there's quite a bit for me to talk... | Read more »
MLB Manager 2015 (Games)
MLB Manager 2015 5.0.14 Device: iOS Universal Category: Games Price: $4.99, Version: 5.0.14 (iTunes) Description: Guide your favorite MLB franchise to glory! MLB Manager 2015, officially licensed by MLB.com and based on the award-... | Read more »
Breath of Light (Games)
Breath of Light 1.0.1421 Device: iOS Universal Category: Games Price: $2.99, Version: 1.0.1421 (iTunes) Description: Hold a quiet moment. Breath of Light is a meditative and beautiful puzzle game with a hypnotic soundtrack by... | Read more »
WWE WrestleMania Tags into the App Store
Are You ready to rumble? The official WWE WrestleMania app, by World Wrestling Entertainment, is now available. Now you can get all your WrestleMania info in one place before anyone else. The app offers details on superstar signings, interactive... | Read more »

Price Scanner via MacPrices.net

13-inch 2.5GHz MacBook Pro (refurbished) avai...
The Apple Store has Apple Certified Refurbished 13″ 2.5GHz MacBook Pros available for $829, or $270 off the cost of new models. Apple’s one-year warranty is standard, and shipping is free: - 13″ 2.... Read more
Save up to $80 on iPad Air 2s, NY tax only, f...
 B&H Photo has iPad Air 2s on sale for $80 off MSRP including free shipping plus NY sales tax only: - 16GB iPad Air 2 WiFi: $469.99 $30 off - 64GB iPad Air 2 WiFi: $549.99 $50 off - 128GB iPad... Read more
iMacs on sale for up to $205 off MSRP
B&H Photo has 21″ and 27″ iMacs on sale for up to $205 off MSRP including free shipping plus NY sales tax only: - 21″ 1.4GHz iMac: $1019 $80 off - 21″ 2.7GHz iMac: $1189 $110 off - 21″ 2.9GHz... Read more
Färbe Technik Offers iPhone Battery Charge LI...
Färbe Technik, which manufactures and markets of mobile accessories for Apple, Blackberry and Samsung mobile devices, is offering tips on how to keep your iPhone charged while in the field: •... Read more
Electronic Recyclers International CEO Urges...
Citing a recent story on CNBC about concerns some security professionals have about the forthcoming Apple Watch, John Shegerian, Chairman and CEO of Electronic Recyclers International (ERI), the... Read more
Save up to $380 with Apple refurbished iMacs
The Apple Store has Apple Certified Refurbished iMacs available for up to $380 off the cost of new models. Apple’s one-year warranty is standard, and shipping is free: - 27″ 3.5GHz 5K iMac – $2119 $... Read more
Mac minis on sale for up to $75 off, starting...
MacMall has Mac minis on sale for up to $75 off MSRP including free shipping. Their prices are the lowest available for these models from any reseller: - 1.4GHz Mac mini: $459.99 $40 off - 2.6GHz Mac... Read more
College Student Deals: Additional $50 off Mac...
Take an additional $50 off all MacBooks and iMacs at Best Buy Online with their College Students Deals Savings, valid through April 11, 2015. Anyone with a valid .EDU email address can take advantage... Read more
Mac Pros on sale for up to $260 off MSRP
B&H Photo has Mac Pros on sale for up to $260 off MSRP. Shipping is free, and B&H charges sales tax in NY only: - 3.7GHz 4-core Mac Pro: $2799, $200 off MSRP - 3.5GHz 6-core Mac Pro: $3719.99... Read more
13-inch 2.5GHz MacBook Pro on sale for $100 o...
B&H Photo has the 13″ 2.5GHz MacBook Pro on sale for $999 including free shipping plus NY sales tax only. Their price is $100 off MSRP. Read more

Jobs Board

DevOps Software Engineer - *Apple* Pay, iOS...
**Job Summary** Imagine what you could do here. At Apple , great ideas have a way of becoming great products, services, and customer experiences very quickly. Bring Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
Sr. Technical Services Consultant, *Apple*...
**Job Summary** Apple Professional Services (APS) has an opening for a senior technical position that contributes to Apple 's efforts for strategic and transactional Read more
Lead *Apple* Solutions Consultant - Retail...
**Job Summary** Job Summary The Lead ASC is an Apple employee who serves as the Apple business manager and influencer in a hyper-business critical Reseller's store Read more
*Apple* Pay - Site Reliability Engineer - Ap...
**Job Summary** Imagine what you could do here. At Apple , great ideas have a way of becoming great products, services, and customer experiences very quickly. Bring Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.