Wednesday, June 27, 2012

I want my 10%. Hidden charges associated with project pricing

This is a sequel to my article "Exactly how much should I charge for this job". In that article I talked about how to go about billing clients. This sequel stemmed from the tremendous user feedback I received hinting me on issues I left out they wanted to see addressed. So here goes.

The either silent or vocal 10%
Don't be mistaken, I am not referring to tithes. I am instead referring to the cut for the one who got you the contract. I tag it silent or vocal because depending on the character of the one who got you the job he may either decide to ask you or assume you know he has to get his cut. You always need to be plain and open about this with the one who got you the job. Ask him, how much will you charge me for getting me the job. It's important to ask first because some take less than the 10%, others take as much as 30% - greedy bastards. You can always bargain with the guy if you think he is biting too deep into your cake. Don't feel too bad about giving this 10 or more percent because it opens doors to more contracts just like tithes open the flood gates of heaven. Mind you, this 10% or more doesn't get recorded on your invoice. It's strictly between you and the guy who gave you the contract. Handle that transaction offline.

Withholding Tax
Some companies, mostly NGOs or companies with international roots withhold 5% of what you bill them as withholding tax. They are required by the laws of Ghana to do so. You need to factor this into your total cost.

Other Taxes
It is important to know what other taxes the company or client will charge you. Some won't tell you before hand and just hand you a cheque with all deductions made. Yea, I know the look that will be on your face. The first time I saw that look was at a friend's engagement. In Ghana, the man is required to give his bride's brother some money (akunta sika) at the ceremony. This friend of mine knew for a fact his bride had no brother. Half way through the ceremony this dude popped up like a virus alert and claimed to be the bride's brother. My friend couldn't argue and had to save face even though he hadn't bargained for this surprise. I don't want that happening to you because, you may end up fighting with your client or his accountant.

Maintenance and retainers
For some funny reason some clients assume you need to maintain what you did for them for free. Well, you need to state clearly what your policy is on maintenance of the work you are doing. Mostly it's good to do free maintenance for 3 months and begin billing for maintenance from the 4th month. Again, whatever the client will require you to do as maintenance can be broken down into hours. There are some fixes that take less than an hour. You can either do those fixes for free or defer billing for that fix until you have enough fixes that measure up to an hour and over.

Except where explicitly requested by the client your invoice can list summaries of major deliverables in the project, not really a fine-grained breakdown of how long it will take you to even open Microsoft Word to start typing the invoice.

My real world invoices
You asked for some invoices I had presented to clients. I am doing this just for you. Just because I love you too much. I usually wouldn't put my rates in the open and I expect you to keep them a secret (yea right!). Note that rates vary between developers and/or development companies. My charges may either work or not work for you. Your client may slap you for presenting them with outrageously ridiculous bills, my client may smile and say "when can we start work?" The invoices below are neither templates nor the status quo and are a mix of past and somehow present developments. You can leave comments on the invoices if you need clarifications. You can also 'borrow' my invoice format or let me know if you have one I can 'borrow' .. scratch my back let me scratch yours :)

1. Blog site
2. Car auction site
3. Community site
4. Another blog site but a richer client
5. Photography website
6. Basic website
7. Corporate basic website but the kind who get bored when you charge them cheap
8. NGO directory website


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