Billing for phone calls

Question

I have an arrangement with a couple of my regular clients whereby there's a regularly scheduled conference call to chat about various work being done and also new stuff coming down the pipe.

At first I never billed for this time, since some of it was spent on sales-y stuff like discussing potential new projects, etc. It also just seemed like a nice way to build goodwill.

Over time, however, this has become problematic and I feel like I'm being taken advantage of. We're a small shop and often as many as 3 people need to attend these conference calls. For a 90 minute call, that's around $500 of potentially billable time that's being given away for free. Considering these calls happen once per week for a couple of different clients, and it adds up to something like $5K/month in lost (potential) revenue.

What are standard industry practices around this kind of thing? Should I insist on billing for this time? Or is that being greedy and was my initial instinct not to bill correct?

Answer 1

Maybe you should consider put the regularly scheduled conference calls into your agreement with each client. Even though you might find yourself in the same situation in the future, even putting this type of language into the contract will help to remind your clients that this time is not necessarily free.

However, if you've already done this, then you could have only one person attending calls in the future and explain to the client that the others are previously engaged. You obviously don't want to create any negative feelings towards yourself or your company but it is important for your client to understand the constraints and that these calls need to be actionable with clear deliverables expected at the end.

Answer 2

It isn't being greedy, but billing hours for a call doesn't seem like the best way to obtain the uncaptured revenue. It seems very tit-for-tat. What you should be doing is adding on estimated conference time to your development estimates, since these conferences really are part of the development process. If you aren't providing an estimate and you are strictly billing by the hour, bill it as development time, because, as I said before, that's what it is.

Answer 3

Unless its pure sales, the standard is to bill for the time. That goes for any time spent on client projects.

Speaking from experience, I think one of the best things you can do is establish a document that defines exactly what you bill for and what you do not bill for. Share this with your team, your clients, etc. This reduces the ambiguity and while your clients aren't going to like everything in there, you won't feel any greed or guilt billing for your time - everything is above board and spelled out clearly. You can decide if you allow wiggle room in your policy or not, but the more stringent you are, the easier to enforce across the board.

Anyhow, thats my 2 cents.

Answer 4

I would propbably do it. Maybe not as a direct (3person x 90minutes) phone confenerence billitem, but maybe more as a part of a "managment fee" for the overall projectmanagment time spent. Im not very often the boss of anyone billing hours, but I sure often heard that I needed to bill actual time spent.

Dont be to nice :)

Answer 5

The benefit of billing is that the call can be better kept on topic, therefore shorter.

Answer 6

Establish an amount of time that comes gratis (1 hour?) per month, then charge for anything over that.

This way you aren't charging for petty phone calls or 15-minute "how's it going," but when a client wants to set up something genuinely time-consuming you have a reason to charge.

I agree with JasonS that establishing this rule ahead of time is best. However it's not unreasonable to do so after the fact, explaining that it's taking more time than you expected.

Answer 7

I agree with Jason Cohen. It seems that offering some time gratis would be a good faith measure since that was the original arrangement but there's nothing wrong with explaining that the terms of your agreement need to be changed.

In the future, make sure you include this information in your contract or billing agreement.

Answer 8

With existing clients, hopefully they would be understanding of a frank explanation of this policy - especially during the transition to a new billing cycle.

Answer 9

When working on a paying job, we bill for meetings, phone calls and emails that are "on task". We wash up the short items at the end of the month as a single line item on the invoice. Longer meetings and calls are billed separately so the customer can see this.

Calls etc that are not strictly "on task" go on the invoice, but with no charge.

I know a consulting firm that isn't comfortable billing for phone calls, so they have that built into the charge-out rate. They still get paid, more or less, and the customer feels they can call to discuss the project without the meter running.

If I'm changing billing, I give the customer plenty of notice. 3 months for on-going work, or wait till the next contract.

Answer 10

Since I am billing by the hour for everything else, I can't imagine why I would not bill for phone calls. Working from home, phone calls make up a substantial part of my work. I have not billed for calls less than a half hour, though, and these do add up, so I am pondering what to do about that.