Should you charge and invoice by the hour?
The age old debate—should you charge by the hour or per project? I’ve preached charging per project for the last several years because I started my career charging hourly and got severely underpaid. When charging per project, you can increase your fee based on value and your work isn’t tied to your time. There are, however, a few challenges with this form of billing as well. Here are some reasons you may want to charge and invoice by the hour instead:
Do you have problems setting boundaries?
When working for a project rate, you need to have clear boundaries. If the work is taking longer than expected, you need to be able to confront your client. This can be challenging if the client is used to you doing work that’s above and beyond your agreement. They’re already used to you making exceptions for them. If you have trouble setting boundaries, charging hourly can make sure that you’re getting paid for your time.
Do you regularly underestimate the work?
Let’s say you charge per project often and you’re noticing that each time you don’t charge enough. Think about the last project that you did and how much you got paid. Divide that number by the number of hours you worked. Are you getting paid the hourly rate you want to make? If not, you should think about making some adjustments.
Charge per hour for a while to see what it really costs you to do a project and then switch back to the project fee. Remember—you need to pay your own taxes and health insurance and you need to fund your own retirement. You need to be charging appropriately to make sure you can cover these costs and goals.
Do clients undervalue your work?
Value is a touchy topic in the creative world. A recent study reports that people feel comfortable underpaying people who are passionate about their job because they believe having the job is part of the reward. This is a frightening prospect because creatives and passionate workers also need to get paid appropriately. Having a job in a field they enjoy is not reason to expect they’ll be willing to do extra work or be underpaid. Charging hourly can help ensure that you’re getting paid appropriately for your time. A per project rate can lead to exploitation if you’re not careful.
Charging per hour or per project is a personal choice. Currently, I’m going back and forth with which system I like better. For writing assignments, it’s usually easier to charge per project. You just need to make sure that you and your client are on the same page on what’s required for the project. Otherwise, scope creep can come into play and you may realize you’re doing more work than you’re getting paid for. It may be a good idea to invoice by the hour for tasks like virtual assisting or ongoing support where the amount of work is unclear.