Home » Two senior practitioners share tips: “Getting Paid: The Fine Art of Billing and Collection”

Two senior practitioners share tips: “Getting Paid: The Fine Art of Billing and Collection”

A recording of this teleseminar is available here.

Industry veterans James Tabaczynski, president of the JPT Group Inc., and Martin Habalewsky, APR, consultant, shared useful tips and insights about billing and collecting fees when working as an independent practitioner.

Both PRSA members, Jim has over 40 years industry experience; 25 as an independent practitioner, and Marty has over 20 years serving in top executive roles on both the agency and client sides.

Listeners participating in the August 12/60 Teleseminar learned about the pros and cons of billing by the hour, project or retainer, methods of tracking time, rates, how to bill for travel time, and schedules of payment.

Billing methods
According to Jim, billing by the hour is the most fair, but can be time consuming and opens the door for client critique. He does not bill a 1/4 hour for answering an email or making a quick phone call, as some practitioners do.

If the billing is to be done by the project, then he always provides an estimate in advance. To address time overage, Jim recommends adding a 15 percent contingency to the estimate. He also suggests billing in increments throughout the project.

And when it comes to working on a monthly retainer, Jim says the risk is that you put more work in than the retainer covers. However, if you “over service by 20 percent it’s not a bad thing.” Most importantly, through a letter of agreement, be clear about what services are included in the retainer and what are not.

When a participant asked about pay for performance, Jim shared his not-so-positive experience using that method. He had gotten a client an interview with The Wall Street Journal, and although he prepped the client, the client fumbled the interview and the article didn’t appear. Similarly, Marty was tasked with getting a certain number of attendees at an event, and although was shy by just a few people, the client wouldn’t pay.

Tip: Never have more than one third of your billings coming from one client.

Jim shared his rate breakout rates as:  a regular rate, a discounted rate (less 20 percent) for non-profit agencies and subcontractors, a crisis communication rate (30 percent above standard rate), a referral rate, and a rate to work on weekends.

A participant asked about billing for travel time, specifically how to handle international travel. Jim bills one half time for travel between the hours of 8 a.m. and 6 p.m. He never bills more than 8 hours in a day. Marty suggests billing 7 hours for international travel, and he doesn’t bill more than 7 hours in a day.

Time tracking and invoicing
Marty and Jim use Microsoft Excel to track time and expenses, with Jim also compiling data in a notebook in which he uses three-letter client codes and job numbers. When invoicing, Marty suggest not revealing number of hours, but instead supply an activity report.

A participant asked about web-based time management and tracking tools. One that is used by another participant is called Harvest, which also has an app. There are others available and can be found online by searching online.

Managing push back on invoices
Marty shared a story about having to compromise two thirds of his fee for a client who was debating an invoice. For this client, Marty was asked to plan and manage a customer luncheon and press event. Although Marty had logged hours planning the luncheon, halfway through the client took over the details of the luncheon. The issue ended with civility, but he wasn’t paid in full.

The importance of using a contract
Marty has also taken legal action with a number of clients who refused to pay. He recommends using a contract, signed by you and the client, because contracts are defendable in court. “Don’t be afraid to use the courts,” he says.

Tip: Many boilerplate contracts can be found online.

When working with an unknown client
Both agreed that asking for one half of the fee upfront is acceptable when working with an unknown client; one that wasn’t referred to you.

Top 10 billing and invoicing tips
Marty shared these 10 tips:

  1. Use a letter of agreement outlining what your fee covers
  2. Avoid having your vendors bill you; have them bill your client directly
  3. Get to know your client’s accounts payable manager
  4. Keep your client informed on all activity
  5. Know and respect your client’s purchasing procedure
  6. Address billing issues quickly
  7. Don’t fear using the courts
  8. Demonstrate results to your client
  9. Let your client know about extra hours that are not billed, but that you logged
  10. Avoid making your work seem simple, i.e. emails à client correspondence, conversation à consultation

Marty and Jim are happy to connect. They can be reached as follows:

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