The following includes excerpts, reproduced with permission, from an article by Jody Grunden.

This article by Jody Grunden looks at four types of billing.

Hourly Billing is billing the client a standard hourly rate based on the amount of time it takes to do the work or complete a project. If the hours are way over the original estimate, the client is not going to be happy. If you’re efficient and complete the project in less time than you estimated, you’ll get paid less than expected.

Flat-Fee Billing involves the accounting firm estimating the number of hours a project will take to complete and multiplying that by the hourly rate. Both parties agree on the project cost up front. In contrast to hourly billing, there is a reward for flat-fee billing if you can get the work done faster.

Retainer-Based Billing - You and the client agree on the number of hours per week you will allot for their project and the hourly rate. The client has access to you or your team for the number of hours you agreed upon. If they don’t use the time, they lose it. If they use more than the agreed-upon hours, they’re billed for the additional time.

Value-Based Billing doesn’t involve hours. It’s based on ... value. Specifically, the overall value you provide to the client regardless of the number of hours the project takes. It’s important to know your break-even point on a value-based bill so you know your starting point. In addition, you need to know what the market will bear for the product or service you’re providing. Value-based billing also requires the company to determine the services that the client values the most so the pricing can be adjusted accordingly.

For the complete article, read “4 Ways to Bill Clients”

From CPA Trendlines, April 26, 2020, http://www.cpatrendlines.com.