Posted by: Catherine Morley
Category: Designers Working With
Bookmark on: del.icio.us

A common litany on design forums is the question “How do you charge?”

Those coming into the industry are unsure if they should charge by the hour, or by the project. Should they quote for the project, with any over-runs billed by hour? Should they ask for a percentage up front, or bill after their clients sign off on the job?

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Andy has it down

Like most professional services, we charge based on the time spent on a project. We will estimate how long each stage of the project will take in order to calculate the headline figure. We’ve been doing this for a while now, so our estimates are generally very accurate. However all projects are different and have their own unique set of influences. As such we always recommend building in a refundable contingency to cover unexpected expenses or additional functionality.

As the project progresses, we’ll track how much time we spend on the various components and keep our clients up to date with how the budget is being allocated. For fixed cost projects we will normally break functionality down into core, desired and deferred components. We promise to deliver all of the core functionality and as much of the desired functionality as the remaining time will allow. This lets clients to see exactly where their budget is being spent and allows them to make much better financial decisions.

Andy Budd | Managing Director | Web Designer | Author
Andy Budd::Blogography | CSS Mastery

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Anna charges by the hour

From past experience, we have found that charging hourly is the most fair way to work. Before we begin designing we try to have as clear an idea as possible of what the client is looking for, so that everyone is on the same page and we can more quickly come up with a design solution that everyone is excited about. When we were working with flat rates, we found that clients were much less likely to make decisions and to constantly change things around. With the hourly fee, everyone is encouraged to make decisions and push the project forward. We do ask for a percentage up front - as a retainer that is credited to the final payment. We get paid as we go, and also require payment in full before handing over the finished product.

Anna Corpron & Sean Auyeung | Interdisciplinary Design Practice
Sub-Studio | sub-studio design blog

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Brian gives advice

On many projects it’s fee-based, although some clients are on hourly fees, (and we are moving to add a monthly account services fee for overhead and client maintenance).

With new clients, we routinely ask for and receive 30% to 50% up front to initiate a project and or relationship. I’m pleased that many clients are very eager to send a check, and anxious for us to cash it!

Other terms depend on the project. Long term projects will be billed incrementally.

BUT: resist the urge to wait for that big check to appear at the end. Cash flow is key to any organization. A designer should invoice as much as possible every week.

Brian Sooy | Design Consultant
Brian Sooy & Co | Altered Ego Fonts

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Chris suggests 50/50 or thirds

It really depends on the client and the project. As a freelance designer, I’m going to run into a lot of small business owners who are usually unprepared for the true cost(s) of their project. I find out from them what the most comfortable payment solution is. I usually try to do it as a 50/50 or at least pay in thirds and no matter the payment schedule, it’s always outlined in my agreement exactly what the payment will be and what has been accomplished (in the project) for that payment.

Chris Tomlinson | Communication Designer | Printer
Gonink | Gonink blog

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Dag goes with project fees and by the hour

I charge two ways, set project fees and by the hour. It depends on the nature of the project. I have one client for example with whom I’ve enjoyed a great working relationship for many years. However a project rate with him wouldn’t have been feasible, so I charge an hourly rate.

Dagmar Jeffrey | Principal Arche-tech
NO!SPEC Brainstorming Team Member | Arche-BLogGER

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Daniel leans towards charging by the project

It varies by client. I tend to quote a project price, based on the needs and requirements, then by the hour for changes. I always ask for a percentage up front, a percentage when comps are approved, and a percentage upon completion.

Daniel Will-Harris | Communication Designer
Will-Harris House | Schmoozeletter

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Dan brings in a deposit with increments

A large percentage up front, as low as 33% up to 50% and then incremental monthly invoicing until the project is completed. I also include a overall project time frame and charge additionally if the client does not manage the project so that we can complete the project within the time frame. Finally, I include a kill fee if the project is stopped for any reason.

Dan Sturdivant | Communication Designer | Editor
TexasDesign.com

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Leslie agrees

I think designers should be paid in stages with an up-front absolutely needed. Also, they must be religious about marking up all their costs equally and then billing their clients the marked-up rates.

Leslie Burns-Dell’Acqua | Creative/Marketing Consultant & Coach
Burns Auto Parts–Consultants | Burns Auto Parts blog | Podcast | Book

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Metin keeps it open

Usually I keep track of the hours I’m spending on an assignment, and count up the hours to determine my price. But if an employer prefers a fixed price that’s no problem to determine.

Metin Seven | Communication Designer
Seven’s Heaven - design and illustration

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For Neil it depends

It really depends on the client and the project. Identities are billed by the project as are most print and web gigs. Small jobs are often billed by the hour. The same goes for site updates.

Neil (nt) Tortorella | Marketing Manager
Tortorella Design | The Marketing Mind | Creative Latitude | BoDo Team | Marketing Minute

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Roger keeps an eye on the clients

What works best for me–for design projects beyond 1-on-1 coaching–is an agreed-upon fee for the project, beginning with a significant deposit. If the project is going to spread over several months, there should be “benchmark payments as specific–and agreed upon–goals are met.

Time after time, I’ve found that if clients are unwilling to provide a deposit at the start of the project, the project is probably not going to work out for either party. Design services, once delivered, are very difficult to collect upon.

I quickly leave meetings with clients who make statements like, “I never pay full price!” or “Can you sharpen your pencil a bit more?” I charge fairly, and find that clients who immediately voice price objections, or who have little understanding of the limitations of design, are typically more problem than they are worth.

Roger C Parker | Designer | Writer | Marketing Consultant
Design To Sell Online | Roger C. Parker Design to Sell Blog | Design to Sell

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Scott puts forward an interesting suggestion

I try to keep my estimating and billing fairly simple being a one-person design resource (at the moment anyway) and things depend on the requirements of a project. In some cases, if I can accurately quote a project then I will quote the project based on that known scope. Anything additional gets quoted separately or charged on a n hourly basis.

In other cases where there will be more variables that could drastically change the scope or timing of a project, then I’m more likely to bill hourly. Typically I send invoices every two weeks, or in the case of some clients, once a month, mostly so the administrative tasks can be broken down into simple blocks of time. In talking with a friend the other day, he said he allows clients to buy blocks of time for projects - say 20 hours and they can do whatever they want with that time. I find that interesting and will probably try that in the future.

Scott Boms | Communication Designer
Wishingline DS

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Stefan goes with the 50% and more

Generally on projects with new clients we ask for 50% upfront and the remainder upon completion. If the client has a need for a payment plan, we will split it up generally over 3 different payments. If we have a project that requires multiple milestones, we will collect in full, payment at the end of each milestone. For clients that we have been working with for years, we usually require payment 30 days after completion. On some rare projects, however, we will take 50% upfront from an existing client.

Stefan Bean | President/Creative Director
Pulse Creative Partners, Inc. | BoDo Author | Bean’s Biz

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Summary

When I started out, I invoiced at the end of each project. At the time I lived in a small country where everyone knew each other, so it was a safe bet I’d get paid. And since I wasn’t tied to cash flow, there were no worries on that end. Enter the Internet and everything changed. The handshake became a contract and the payments came in thirds.

Next up I ask the question “How can a designer improve their skills?”

until the next
Designers WW,
cat