Many professionals choose to charge flat rates for their neat simplicity. Unlike hourly rates, there’s no need to record every second of your working life and offer it up to clients for inspection. You’re not a slave to micro-detail needing to justify your time. You charge based on value, thank you very much, and it’s the quality of the end product that matters.
Except, there’s also that big issue of profitability. When you agree a fixed rate, you’re essentially gambling with all the requirements that go into the job – including time. We all love to hate on time tracking, but for flat-rate projects it’s actually essential for running a fair and sustainable business.
Capture hidden costs
A fixed rate needs to account for all the extra tasks involved in delivering a project, aside from the time you actually spend working. Advanced time tracking apps can automatically track the time you spend on client phone calls, traveling for work, in meetings and responding to emails, to ensure they are represented in your rates. By analyzing all the data you collected on previous projects, you can factor in the majority of surprise costs that will be involved for similar future projects.
Understand your own efficiency
No two tasks are equal. You may find certain project tasks take longer than others, especially if they demand conceptual thinking, heavy involvement with clients or abstract problem solving. By tracking time across projects, you can see how long you spend on each task and work out the minimum time you need to safely complete each. Without knowing how long different tasks take you, you can’t safely estimate a rate that will actually be profitable.
See where projects go off-track
No matter how well-planned, there’s always potential for a project to stray from the agreed course. Time tracking helps you see just how long you spent discussing iterations with clients, making revisions to work, or even developing that new direction that the client requested midway through the project. It can even help you build profiles of your work against your different clients, to see which relationships always cost you more than forecasted. Only by tracking these incidents can you act upon them for future project rates.
Choose the optimal project rate
All of the above feed into a considered, evidence-based approach to choosing the right rate for your work. You can ensure you don’t undersell yourself when negotiating a fixed rate, and understand when it’s actually more profitable to use an hourly rate for a specific project or client. Tracking your own productivity and efficiency over time also allows you to adjust rates to stay competitive and profitable. It also lets you keep an eye on your own business running costs, like administration, winning clients and accounting, which aren’t tied to billable projects.
Provide work transparency
Since hourly rates are the pricing standard, many clients expect to see exactly how consultants spend their time on a job. Even if your client doesn’t request an itemized timesheet for invoicing, offering work transparency can really cement your reputation as a reliable and honest contractor – especially if you’re working with a client for the first time. Providing clients with a breakdown of the time you spend on different project tasks can help refine client-side project management and help manage their expectations for future work together.
We get it – the beauty of a fixed rate is that you don’t spend time wrangling with figures and granular detail. We don’t want to spend any more time tracking time than you do, which is why we’ve built an app to completely automate the whole process.
We created Timely so we could spend as little time as possible thinking about time tracking. By using AI, it’s able to track everything for you: you just download it on your work devices, turn on automatic tracking and it records everything you work in the background. You don’t have to register your time (its AI can create timesheets for you) and sending a client report from the app takes less than a minute.