How to learn billing?

employees salary X multiplier = amount charged. Example, 40 hours x $20/hour (salary) X 3 (multiplier) = $2400 billed to customer.

Multipliers are calculated from summing salary, overhead, miscellanea, and profit margin. Typicals across North America are 2.5 (quite low) to 3.75 (average high).

Project billing is not really an isolated exercise. Minimally done, count hours spent X charge rate, add it up for all workers, incidental charges (copying, travel, etc.), taxes: thats the bill.

Properly done it should be related to activities, phases, deliverables, whatever your company and client contract use. For example, from your project budget or work breakdown structure, hours should be accrued to those activities and shown on the invoice per billing period. Or with deliverables charges, the billing should represent the contract wording regarding amount owed at receipt of said deliverables.

The 'multiplier' to repeat is an internal factor that typically never is disclosed, only exception I've seen is federal governement supply contracts that expressly ask for a multiplier breakdown including profit margin.

Assuming the multiplier is set, you should have your hourly rates set. With everyone tracking time, billings is just hours x rate.

Depending on how the project was landed, the billings may be discounted or inflated beyond the simple math - which is why you may not be involved.

This may impact your project profitablity and if you are held to this, I certainly would want to be involved with the billings.



Don Phillips