Effortlessly Manage Billable Hours with Our Invoice Template for NPOs

Billable hours invoice template for NPOs

[Music] how to go from hourly to project-based billing this is a question that comes up more often when folks are either just starting out and do have a coach or do have a boot camp that they're participating in to kind of guide them through the easiest way to avoid a lot of the hurdles you're going to start off with when you do it the hard way like i did because i didn't have a coach and also with people who have been in business and they've been doing hourly based billing and now they've learned project-based billing is so much better for a lot of reasons now i want to switch over to that right which is a little rewriting of contracts education of your current client base and then how to have those conversations with future potential clients going forward here's the basic concept okay now i have an entire session that i teach on this so i'm going to try to break this down real quick and dirty for you here's the concept you need to identify what you want to make an hour okay regardless of what that is that's the first thing you need how much do i want to make an hour then you have to evaluate what's the service i'm providing how many hours does it take to provide that service you cannot think about just the one hour you spoke with a client you have to think about how much time did it take me to prepare for that call is there any follow-up after the call is there any additional work that you're doing right what is the total amount of time that you estimate it's going to take and then you can come up with a rough estimate of pricing for a service okay let's say that we'll give you two examples here let's say you're doing grant research and that's a service this a rough estimate of a specific amount of time it might take you to complete that put the documents together you're going to provide the consultation with the client after the fact to review it so whatever that is let's say you've decided it's gonna cost a thousand dollars whatever perfect it covers the amount of time that you anticipate the service is gonna take right you don't have to break that down for the client and say i feel like it's gonna take me this many hours 10 hours and i'm charging you 100 an hour you'd have to do that you have a cost for the service right it's sort of like when you go to buy a phone you don't go to verizon and say hey so can you give me the breakdown of why this phone costs 850 dollars how much did eat each component cost how much did the labor cost to put it together blah blah blah you don't ask that you just say this is how much it costs if you want to buy it right then you get a little bit more complicated when you start talking about putting together a program for a client or putting together a contract for a client or something that involves multiple services right you might be saying i'm going to provide grant consultations for this client i'm going to do research throughout the contract period for this client as needed and i'm going to write grants for this client and you can be as specific or whatever as you want in your contract we can talk about contracts later but let's say that this is a one-year contract maybe you've determined how many days are going to be in person how much work is going to be done at home so you can say oh this is how much my travel days cost this is about how many hours i feel like i'm going to spend on each service this is how many grants i anticipate writing and this is about how many hours i feel like the total of those grants is going to take whatever then you can come up with a for the whole contract i feel like it's going to be 20 000 right and then this is a one-year contract so i'm going to divide that by 12 months and that's how much my monthly fee is going to be right that is project-based billing not hourly billing you have based your project-based billing on hourly billing but you're not giving the breakdown of that to your client right you know that if you fall within the parameters of what you projected you're going to make the hourly fee that you are going for as a consultant um sometimes i have clients that just want to have me on standby like we want to have you on retainer for if we need you we'd like four hours a month great i know how much my hourly rate is and i'm like so it's going to be this much a month whether you use it or not because this is how much i want to make an hour and that's how that's how much it costs clients don't care they're like great if we need you we'll use it and if we don't that's fine too and that became really easy for me a couple of years ago because i determined and was very comfortable with what i wanted to make an hour and how much my time is worth and the value that i deliver to clients based on that so as you start thinking about billing if you're brand new i would highly encourage you not to do hourly based billing unless it makes sense for a product like when we do federal grant writing we do hourly based billing because we know approximately how long we anticipate it's going to take and we tell the client we anticipate it's going to take 40 hours we charge this much an hour this is what your estimate is going to be they pay 50 up front and then we keep track of our hours at the end if we didn't use all 40 hours we bill them for the remaining time we worked and if we used 40 hours we build them for that if we used more than 40 hours we don't bill them more than 40 hours because that's what we anticipated that we would work right so it's really kind of a win-win for the client but outside of consultations on demand and federal grant writing that is the only thing that we do hourly billing for here at funding for good anymore everything else is project-based pricing or service based pricing strategic planning has a flat rate plus travel and it doesn't matter if we end up spending a few more hours with one client on some of those aspects or a few hours less the price is the same because we've estimated it over a couple of years now and we know approximately how long it takes us to do that between the two of us and we know how much we want to be making an hour so it's it works out that we build things that way so anyway when you want to think about going from hourly to project-based pricing those are some of the parameters you want to consider [Music]