Reasons Not to Bill by the Hour

Source: Innovative Practice Management

The following is excerpted from a Blog posting in Innovative Practice Management, posted by Mark Bailey & Co. Ltd.

• Time sheets are driving talented young professionals away.
• The profession must become more flexible to retain people.
• The profession must improve efficiency, but if it bills on the basis of time, increased efficiency means less revenue.
• Time sheets do not promote trust. Time sheets are a form of micromanagement, which drives talent away.
• Our people don’t sell time, they sell knowledge.
• Using time sheets costs too much because:
  • The value is usually more than the time. So billing for time is a cost.
  • It takes more time to collect an invoice that is a surprise to the client. If the amount is agreed up front, there is no surprise and no time spent justifying the time.
  • It costs money to make collection calls, and there is a cost to the time delay in collecting. These are both diminished by value billing.

For the complete Blog entry, click here and see the 2008 entries of January 31, February 1, and February 7, What I Hate About Time Sheets (Parts I, II, and III).

From Innovative Practice Management (Mark Bailey & Co. Ltd., Reno, Nevada, Blog, http://www.markbaileyco.com/blog/, January-February 2008.

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