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When completing a project for a client, smart time management can mean the difference between a high payout or a flop. Whether you work as a freelancer or a small team, keeping a close eye on your billable hours improves efficiency, and allows you to optimize your billing structure for more profitable deals. This is why it’s important to know how time tracking for freelancers works.
In this guide, we are going to discuss the key aspects of time tracking for freelancers; from setting your rate to using software like FreshBooks to track hours automatically. FreshBooks, who is the sponsor of this article, is one of the best-regarded time tracking and invoicing solutions in the SMB space. You can try out their award-winning software free for 30 days by clicking the link below.
Hourly billing usually makes sense when there’s an ongoing relationship with the client, such as an IT firm that provides ongoing tech support. When the number of hours is
Experience: If you’ve been in business for more than a year, then you probably have a pretty good idea of how long it will take you to complete a project and how much you should charge to make a profit. On the other hand, if you just got your first client, then you don’t have this advantage and may want to go with the all-inclusive flat rate approach.Unanticipated Delays or Issues: If you run into an issue which results in the project taking more time than originally estimated, you will get paid for all of the hours worked. If you had given your client a flat rate, you would have to “eat” any additional hours that were not included in the original estimate.
Detailed billing: Unlike billing for a flat rate, you can provide very detailed invoices to your clients when billing hourly, which mitigates any potential disputes. I recommend including a line-by-line description of each task along with the total hours and the hourly rate. This is where it helps to have an invoicing program like FreshBooks, which can easily log and categorize tasks, and produce a well-formatted invoice.
If you have exceeded the estimated hours that you provided your client with then you must inform the client ASAP. I would simply send an email to request a meeting with the client. I would not include what the issue is in an email. You want the opportunity to convey the reason for the additional hours and sometimes with an email things can get “lost in translation”. Be sure that you are prepared to outline in detail the work that was done with the additional hours.
To avoid this kind of situation, we recommend that you use a time tracking & billing system like FreshBooks. With FreshBooks, you can run a time entry details report as often as you like to stay on top of your billed and unbilled hours for each client. We will show you how to run this report in the Time Tracking Reports in Freshbooks section below.