CNS Hourly Billing Primer

This article answers the most common questions asked by our clients when they begin requesting hourly billable work from us.

Estimates vs. Quotes.  When we provide an estimate, it is just that - an estimate, and the actual hours worked on a task can vary greatly from the estimate.  Our job would be easier if we could just provide a flat quote for each task, and charge that amount regardless of the actual time taken, but there are a few down-sides to working this way:

1. Since we need to earn, on average, our standard hourly rates for every hour of work done, flat quotes would include a certain amount of padding.  This would be based on past experience, and the risk involved in unknown factors that could affect the final hours.  As you can imagine, we must in the end guarantee that our quotes are overly cautious, so that over time you pay more than you would if you had paid for the actual hours worked.
2. Any changes or additions that you request during development may affect the actual time, so our ability to be flexible would be diminished.

Manager Consulting and Specifications.  Every task requires a certain amount of management time.  This management time is spent on manager consulting (communication with clients to work out the details, preparing estimates, assigning), and specifications (writing internal instructions for developers to follow).  Developers typically work on at most a few tasks each day, so it is easy for them to track their time on a task-by-task basis.  Managers, on the other hand, may work on dozens of tasks for multiple clients, spending as little as a few minutes on some.  This makes it nearly impossible to record their time on a task-by-task basis, so managers record their time under a single task called "Manager Consulting and Specifications" for each client. 

In simpler terms, each task assigned to a developer requires a certain amount of planning.  This planning is done by our managers and must be billed for.  In the end, manager consulting time reduces costs because tasks are planned out ahead of time by managers instead of immediately assigned to developers.  If we skipped manager consulting time, developers would be forced to figure things out as they go and development time would increase accordingly.  

Please click here for a more detailed explanation.

Tasks That Span Multiple Months.  We invoice each client on the 1st day of each month for any billable hours worked in the previous month.  Some tasks may start during one month, and continue in the next month.  In that case, the following month's invoice will show additional charges for that task.

Some clients have expressed the opinion that it would be nice to be invoiced one time for each task, after it is complete.  This would unfortunately be impractical, since the final completion time for most tasks is heavily dependant client's input, responses, and final review, which is beyond our control.