Ask HN: How do you bill your freelance consultation services?

[ziggystardust]

I am a freelance consultant mainly consulting startups over Skype. I do provide software development services for startups but that's an less frequent affair than daily consultations over voice/skype.

The problem is I am unable to bill these voice consultations efficiently.. though I have a hourly billing model, most of the times it's unclear where the consultation starts and ends. which makes it hard for me to turn an on going conversation into a billable conversation.

The second problem I face is the actual billing. Skype is a great platform but there's no way I can bill a conversation over Skype. then there's the whole cycle of send invoice-> follow up -> get paid or die.

How do you deal with such issues? (also, mention your domain of consultation, since I feel each domain would have it's own set of challenges)

[davismwfl]

Not sure I understand where or why you are struggling. If you are doing hourly consulting you have to track all your hours and invoice for them. You are a one person show as a freelancer so you aren't tracking 10 people, so this isn't a big problem and trying to optimize on invoicing seems like there might be a different problem. You do have to set clear boundaries with clients on what is billable hours and what isn't though or they will kill you.

There are tools that can help make time tracking easier, I used to have my teams use an app (IIRC HoursTracker, or TimeTracker something like that) that let us setup projects, roles and rates and people could track their time in it. The app was inexpensive, like $5-6/per user and at the end of each week they would just use the app to send us their time. It would put it in a csv file and email to admin so we could then add the details to the invoices for clients. We didn't really use the rates section of the app, but the csv could've easily been converted into an excel invoice with a tiny bit of script. We did use the csv to import the time into our accounting tools too, made it nice to eliminate data entry mistakes.

I didn't do so much freelancing as I built consulting groups where we did software/hardware design/development, marketing and go to market planning for clients across numerous industries. So billable video calls and conference calls for strategy talks or status check ins were common. For the vast majority of clients we also stopped billing hourly all together and did weekly flat rates or monthly retainer agreements which made invoicing easier, but we still tracked time using the app.

Just a comment, not necessarily your issue, but something I council new freelancers and startups on quite often. A lot of business is done in excel and by hand, this is not bad, it actually forces vigilance and properly used is more powerful than a full blown ERP sometimes. Dismissing the use of simple tools or feeling like everything has to be automated and perfect is a recipe for disaster IMO, automate only once you have a repeatable process that has low to no variation in output etc.

[ziggystardust]

Would you have used say, a video call web app that could bill the client immediately after the call based on the call minutes ? Or would you still prefer to go for retainers ?

What I’m trying to understand is why the decision to move from billable calls to retainer model? Was it only the ease of invoicing or were there other factors ?

Also, “Dismissing the use of simple tools or feeling like everything has to be automated and perfect is a recipe for disaster”

“Automate only once you have a repeatable process that has low to no variation in output”

Love these two advice! Applicable to almost every business

[davismwfl]

Retainers are good because they encourage contact within some boundaries and provide predictable revenue which is the holy grail for consulting services. Even outside of retainer models though, we would have many calls with clients which were 5-10 minute chats, and we almost never billed for those. Those calls were "free" but were shown on the next invoice as such, with the time tracked. If we had a client abusing that we would discuss it with them and warn them further calls would have to incur billing. But a 5-15 minute call should be considered keeping the client happy and go into the marketing/retention side of the equation. I totally disagree with consulting where they are so worried about sticking it to the client, it is the wrong way to maintain a relationship. At the same time, there are clients who will abuse you and for those times, you need to have the talk and bill them very detailed.

I never invoiced clients immediately for a service, everything was based on written contracts, and no I wouldn't use an app like that ever for a professional client. Businesses have a typical cadence of weekly or monthly invoicing, doing anything more rapid is less a professional service and more a buy here/pay here credit card mentality. There is nothing wrong with that more immediate model mind you, just isn't the same thing as a contractual service between businesses.

If my goal was the immediate model you are discussing, I'd require a payment up front before the call/service was delivered. e.g. you pay for the call, then are connected and the payment covers up to a certain time period with no refunds, more time more money. Or alternatively, the payment details are taken up front but the time is tracked and the payment is completed once the call is done. But that isn't a B2B transaction, that's more a consumer model, again, nothing wrong with it, just different strokes.

[inceptivecss]

I'm a developer by trade, but the nickel and diming of time tracking is something I'm well familiar with. A few thoughts:

1) If you can, give a fixed-fee model a chance. Since your deliverables currently are, "We meet on Skype for a discussion about your needs and possible solutions," you could very easily charge a set rate for each meeting and just make sure you set a hard timebox on it. Set a pair of timers, one at 15 minutes to remind you and them that there's only 15 minutes left on this consult, and one when the time slot is over. Stick to your guns as if you have another appointment afterwards (and you should have one in that slot; that appointment is for compiling your deliverables for sending off).

2) Getting paid is a pain everyone experiences, freelancer and traditional business alike. A good way to deal with that is to require payment up-front. A fixed-fee model is perfect for this, but you can do it with hourly billing models as well. If your consults are always at least half an hour long, require a minimum up-front payment for that half-hour. Or have it be for a full hour, just to cover yourself. This also gets rid of the tire-kickers who just want your knowledge without actually wanting to pay you. Forcing them to put money on the table up-front, even if it's not the full amount, leaves you with the serious clients only.

3) For invoicing and time tracking, I recommend Harpoon (https://harpoonapp.com/). For your purposes, you'd use the time tracking functionality during your consultations, and then create an invoice for that time and send it off. Click start on the timer at the beginning of the call, click stop when you've ended the call, create invoice, add time entry, send to client (via email through Harpoon). You can even integrate it with Stripe for online payment collection, which reduces their barriers to paying you. It also has automatic reminders sent to the clients for unpaid invoices.

I'd be happy to discuss more on your specific needs. My email is in my profile.

Cheers!

[ziggystardust]

Hey, Thanks for being generous in taking out some time and writing so elaborately!!

Quick replies to your pointers 1) not all calls are of the same length Some calls need just 5 mins to explain a complex idea and some calls need 1 hour to explain something simple! Fixed pricing breaks here.. the opposite party will be like why am I being billed for one whole hour when only consumed 5 mins of your time ?!

2) upfront sounds great ! I’ll try that .. but most of the times people get sold into paying for consultation only after the initial consultations fetches them some value. Tire kickers are anyway not gonna come back .. so they aren’t of concern either way!

What do you think of an idealist setup of the following fashion: - conversation starts for free - client can see value and decides to pay - by the end of the call client gets an invoice automatically with the consumed minutes of consultation

Ofcourse this is an ideal scenario but I think that would take care of my problems Is this something that makes sense ?

[inceptivecss]

1) I'd argue that what they're paying for is less your time and more your knowledge and ability to provide them with answers. They're only going to complain if you're specifically charging them for an hour of your time on the invoice. If you instead are charging a fixed-fee amount for an expert consultation, it doesn't really matter how much time they take. You set a timebox so they don't take advantage of you, but if they don't need more than 10-15 minutes of your time to get the value they wanted out of the discussion, there's nothing wrong with that.

2) It sounds like you could benefit from showing initial value in some other way, such as a newsletter, case studies, or knowledge-base.

3) From a client perspective, it feels odd that I'd walk into a free initial-consult meeting and then get an invoice afterwards, even if I got value out of it. I think most clients would feel the same way. If they're paying for a consult, they'll want to know up-front. The other way feels like a bait and switch.

That said, you know your clients best. If you think that they'll be receptive to that sort of thing, give it a try.

[meoz]

I’m working in a small shop and we are using Salarybookapp.com on the iphone, it simple but very easy to use and gets the job done.

[neximo64]

Wave (waveapps.com) is easy and straightforward.

[ziggystardust]

well.. that's again an invoicing web app. The problem is the gap between consultation and invoicing. there's nothing to bridge the two immediately?

[neximo64]

I use it for consulting it works great! If you want time tracking use toggl. Both are hassle free.