The Billing Conundrum: How do you know your bills are true?

A few days ago, the New York Times lead article featured an exposé on the widespread practice of over-billing the legal industry. In the article, Professor William G. Ross, a law professor at Samford (not Stanford) University’s Cumberland School of Law who specializes in billing ethics commented, “Of course, most lawyers are ethical, but the billable hour creates perverse incentives.” If you visit the NYT search page and enter in the search terms “over billing” or “overbilling”, in seconds you will face a stunningly long list of articles of excessive, unethical billing in a plethora of industries.

At Executionists, we have several billing options for our clients, one of which happens to be hourly billing. How can you be confident we are not padding our bills? Where is our incentive to save you money if we are only earning our keep by the hour? Wouldn’t a fixed estimate be in your best interests because then we are incentivized to keep our time to a minimum?

Hourly billing is the best option for clients that have ongoing maintenance needs. Discount incentives are built into our Retainer Plans (available upon request). As you may recall from Econ 101, competition is one factor that drives costs down. We know that you have choices in the global marketplace.  We strive for successful long-term partnerships. Your best interests are aligned with ours, because without our valued clients, where would we be? That’s our big-picture approach. We are not out for a quick buck or to exploit our clients, many of whom are building businesses and can ill-afford to overpay for services rendered.

How do you know that we don’t inflate our invoices? It is true that you actually do not. There is some trust in hiring us or any other provider. Here is some insight into our process: our team tracks time using online timers per client project. The timers register time to the minute. That time is automatically entered into our online billing system. At the end of each month, we generate invoices directly from these time entries.

Typically, a client will contact us with an issue or a small task and ask “How much time will that take you?” Our answer is always just our best guess. We don’t always know what we will find once we dig into the issue. Sometimes it’s a quick fix, but other times, we might uncover issues with legacy code, or old software that has become vulnerable to hackers, a hosting configuration problem, a bug, or an issue with a 3rd party plugin. Our mandate is to communicate with you and offer you options and solutions.

Many clients request a fixed bid for design or programming. These are tough because we really have to clearly understand the tasks and the framework and that may take many hours of effort before a project even starts. On more complex projects, we bill a client for a “Discovery” phase. This gives our developers and designers time to dig into the requirements and write up a list of deliverables and associated time estimates so that client expectations are set.

Unlike some of these bill-churning offenders, we often put in many hours that we don’t bill, though we probably should.

How do you overcome a fear of over-billing?

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Build trust: ask our other clients about their experience with us. Our work and awards demonstrate our commitment to quality. We do what we do because we have a passion for it. If our work helps make your business successful then we will become more successful.

Ask questions: Ask us to estimate how long we think a task or project may take.  We are always able to provide a PDF report of actual hours spent on your work, with entered time descriptions.

Evaluate your budget: We are not trying to compete on cost. If you run a small business with a small budget for web design, development, and online marketing, you may need to work with a different kind of service provider. We set our hourly rates to be fair and competitive for the caliber of work we do. Our rates allow us to hire and retain quality people for our in-house (not off-shore) team.

In the end, you get what you pay for, but hire the team that only charges you for actual work performed.

Free-Consult
Rachel Panush
by Rachel Panush
Rachel is the Senior Lead Project Manager at Executionists Inc. in Marina del Rey, CA.
Posted: May 1, 2013