Consultants of HN, what criteria you use to charge your clients?

Question

I&rsquo;m curious to know from other consultants or who do consultantation works here in HN, how do you charge your clients, and I don&rsquo;t mean the payment method but rather the approach you use:do you charge per hour, per scope, contract, or something else?What factors you use to price your services/work?Do you have a separate contract for each work? Or per client?Do you have specific payments contract installments?What tools/SaaS you mostly use? Either in comms, follow up, contract writing and approval, documentation management, payments too or any other tips.I personally do engineering consulting and refuse to charge per hour, I think clients who ask that they are trying to underpay you, especially if you have a proven record of your outcomes, as per hour rate doesn&rsquo;t count the efforts you put and have been put outside of these hours, so I charge per scope, I do my initial estimates and based on that I name my price for the whole scope, but curious how others do it.

version_five · Accepted Answer

I prefer fixed price / fixed scope. Inevitably clients try to reverse engineer and turn it into an hourly rate anyway. If I have to quote an hourly rate I make it very high... lots of reasons but mainly as you say, people want to find ways to underpay you, so it needs to be a rate thats worthwhile regardless of how few or erratic the hours are. Though in my experience and line of work, if you're quoting an hourly rate you've probably already lost and won't get the contract (worse would be to get it at a mediocre rate).
I have a standard consulting agreement and then add on statement of work for specific pieces of work.
Actual pricing is basically trying to understand the budget the client has, then proposing a scope that they'll be comfortable spending the budget on.

GianFabien · Answer

Refuse to quote by the hour. Day rate is like a law firm rate.
Contract per client or project. I stage the work, each deliverable is clearly specified, priced and delivery date. Client has to pay in full before next stage is commenced. Stages are 2-4 weeks.
Small variations and meetings are pro-rata the day rate. Billed monthly, due 7 days. Large variations negotiated to be a staged unit of work, with spec, etc.
No special admin software. Just templated letters, a couple of spreadsheets. Typically have 2-3 concurrent clients. Refuse to commit full-time. I manage my time and deliverables.
The hardest part is resisting pleas for more time to pay. Have been burnt in the past by clients who demand extra work while not paying past-due invoices. If they need credit for their cash-flow, then they can talk to their bank. I'm not licensed as a bank.