Consulting Fees - Charging for phone calls, emails, etc.

[93ramvert]

O.k. I have been layed off as the Quality Manager for my company. The moved they V.P. of Sales over to Quality. He knows nothing about quality except for the processes he has dealt with in sales. They have recently been told by Pratt and Whitney Canada that they will have an audit. Within 4 weeks of me being layed off (pretty funny). Anyway they have contacting me and want me to do consulting work for them. We have come to an agreement on a rate, but I', just wondering how I go about charging for like phone calls and emails, as far as them asking me questions and such. Do I charge for an hour or do I charge for the exact time I spent on the question. Someone also said something about charging for time to and from their office. Can anyone give any info. I'm looking to make a living on this consulting thing is a temp./part time thing and I already have another full time job. I just want to make the best out of this situation.

[Stijloor]

Originally Posted by 93ramvert

O.k. I have been layed off as the Quality Manager for my company. The moved they V.P. of Sales over to Quality. He knows nothing about quality except for the processes he has dealt with in sales. They have recently been told by Pratt and Whitney Canada that they will have an audit. Within 4 weeks of me being layed off (pretty funny). Anyway they have contacting me and want me to do consulting work for them. We have come to an agreement on a rate, but I', just wondering how I go about charging for like phone calls and emails, as far as them asking me questions and such. Do I charge for an hour or do I charge for the exact time I spent on the question. Someone also said something about charging for time to and from their office. Can anyone give any info. I'm looking to make a living on this consulting thing is a temp./part time thing and I already have another full time job. I just want to make the best out of this situation.

Are your services going to be delivered on site? You already agreed on an hourly rate. Have you also negotiated payment for expenses that you will incur associated with the delivery of services?

For services delivered on-site, you charge for the time actually worked, rounded off to the next 0.25 hour. You can charge for mileage but not for actual travel time.

For services provided from your home, you keep a tally of actual time spent working on issues, rounded off to the next 0.25 hour.

When you invoice (in your case weekly), you prepare a fairly detailed invoice stating a brief description of work performed and with whom you worked. And as a separate line item, you spell out expenses incurred.

BTW, swallow your pride and hurt feelings, you may be knocking on their door again. Or perhaps they will. So, never burn bridges. It's a good sign that they called you.

Best of luck!

Stijloor.

[Jennifer Kirley]

Well, I am awfully sorry you have lost your job - them putting in an unqualified person to head the effort is a predictably myopic management move. But at least you have a contract.

You need to decide if you will charge on a project or time & material basis.

This article says

— 50 per cent of projects are charged on a time-and-materials basis. The consultants charge for the time spent, usually on an hourly basis, plus costs incurred

— 40 per cent of consultancy projects are charged on a fixed-price basis

— 10 per cent of projects are charged on a risk-reward or a payment-by-results basis

If you charge by time and materials, you'd need to jot down the time you spend on their work in any shape or form. Of course communications are a part of that. Whether you charge an hour for a 5-minute phone call is up to you - I expect lawyers would. You do what you and your customers are best off with: by the hour, half-hour or 15 minutes, rounded up of course.

I have a book called The Consultant's Quick Start Guide, that is a quick read and provides the very basic info. It says to charge according to what you would need to bring in as income, and gives worksheets to come to a figure. I see that site has used copies for sale at attractive prices.

I hope this helps!

[93ramvert]

Thanks, yes this helps both posts help.

I really did want to stuff it in their face, well the Presidents face, he's just lost. But I kept my wits about me.

[Jennifer Kirley]

Originally Posted by 93ramvert

Thanks, yes this helps both posts help.

I really did want to stuff it in their face, well the Presidents face, he's just lost. But I kept my wits about me.

That's good - you must really be hurting now, but this actually happens a lot. This is your chance to make him sorry for letting you go, because as soon as your contract ends there will possibly be a competency vacuum. Chances are he's no fool, and realizes his "new" QA Mgr doesn't have your knowledge, but feels boxed in by circumstance. I don't know...but I do know we in QA can be among the most vulnerable in down times. As you have exhibited.

This is your moment to show off your very best character traits so you can go forward profitably in both a financial and emotional sense. Your ex-president is a client now, and should be treated as one so he can be used as a reference. Misbehaving will not help this.

I have faith in your ability to do this well.

[Wes Bucey]

Sorry! I don't consider you a "consultant" according to your description. By the description of the work you are expected to do, you are a temporary, freelance worker, paid at an hourly rate.

Folks who charge hourly rates for their services generally bill in 15 minute increments for work on a telephone. If a phone call takes 1 minute or 14 minutes and 59 seconds, the bill is for 15 minutes.

Outgoing phone calls by you are also charged in 15 minute increments. Unless you have some horrendous overseas phone charges, you usually absorb the cost of the phone call from the phone company.

Similarly, if you travel to and from the office where you used to work (your commuter distance), you don't charge mileage or travel time, but you DO charge a minimum on-site presence charge, usually for an hour or two, regardless if you are on site that long or only for a few minutes for something that absolutely, positively demands your physical presence. An example which comes to mind is a "contract Quality Manager," who is also the designated Management Representative (for ISO 3rd party audit or customer audit.) The auditor needs to have someone conduct the walk-through, produce documents when requested, and answer direct questions and monitor questions put to staff by the auditor.

I know of at least three companies which have been using "contract Quality Managers" for years. In two of the cases, the guy is a former full-time employee who is semi-retired and only has the one company as a client. In the other, the guy works for THREE companies located within commuting distance of his home. All companies know of each other and cooperate in requesting his time when one or the other has an "emergency" visit from a customer.

All three [contractors] charge an annual "retainer" (to maintain availability) plus day rates for full or partial on-site visits. They charge an hourly fee (billed weekly) for phone calls (customer, employer, supplier.) If they have to visit a customer or supplier, they bill 150% of day rate plus all travel, lodging, food expenses. (The justification for the extra charge is the preparation for the visit and inconvenience of being away from home base and thus precluding other business.)

Printing hard copies of any documents is usually done by giving an electronic copy to the employer and having him absorb the cost of printing such hard copies.

Certification renewals, refresher courses, association dues, etc. are all usually absorbed by the worker. The idea is to charge [and collect] sufficient fees to cover such personal expenses.

It might be instructive to read through these threads:
Consulting – Is it in YOUR Career Future?
Contracting/Temping - Viable Alternates in Tough Times

Good luck!

[JaneB]

Originally Posted by Wes Bucey

Sorry! I don't consider you a "consultant" according to your description. By the description of the work you are expected to do, you are a temporary, freelance worker, paid at an hourly rate.

Yes I agree. You're contracting, not consulting.

Originally Posted by Wes Bucey

Folks who charge hourly rates for their services generally bill in 15 minute increments for work on a telephone. If a phone call takes 1 minute or 14 minutes and 59 seconds, the bill is for 15 minutes.

One could perhaps, but I don't.
If someone was charging me for a 1 minute call, I would consider a 15-min bill for it rather steep. I often round up/down - ie, 1-2 very short calls I don't charge for, or I round out a couple of calls and charge for them.

Originally Posted by Wes Bucey

Similarly, if you travel to and from the office where you used to work (your commuter distance), you don't charge mileage or travel time, but you DO charge a minimum on-site presence charge, usually for an hour or two, regardless if you are on site that long or only for a few minutes for something that absolutely, positively demands your physical presence.

Again, that depends. Some charge per hour for travel, some don't charge travel time if it's a full day on site, some just charge an hourly rate and wear any travel time incurred. Different people charge different ways.

[Wes Bucey]

Originally Posted by JaneB

Yes I agree. You're contracting, not consulting.


One could perhaps, but I don't.
If someone was charging me for a 1 minute call, I would consider a 15-min bill for it rather steep. I often round up/down - ie, 1-2 very short calls I don't charge for, or I round out a couple of calls and charge for them.


Again, that depends. Some charge per hour for travel, some don't charge travel time if it's a full day on site, some just charge an hourly rate and wear any travel time incurred. Different people charge different ways.

It seemed obvious to me when I wrote my post above, but in rereading, perhaps it is not so obvious a contractor only charges for a phone call where "work" takes place, NOT one to set an appointment or tell someone where you left the key to the executive toilet.

Bottom line:
EVERYTHING is negotiable and the contractor is entitled (encouraged) to make the best deal he can.

Perhaps also not so obvious:
If someone has been laid off from a full-time job but asked to come back on a part-time basis with zero benefits, the hourly wage should be MUCH higher than the comparable hourly rate for full-time work. Nobody should willingly allow himself to be exploited by accepting a lower hourly wage! That said, the quickest way to lose the job (and any good referrals) is to stretch out hours just to boost the total pay. In other words, cutting the best deal is acceptable; cheating isn't.