Methods of billings for consultancy or services

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Consultant Simple Guide

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Methods of billings for consultancy or services

  1. 1. 4/24/2012PRIVATECONSULTANT Methods of Billings for Consultancy orBILLING ServicesGUIDE Prepared By: Milton- email:Milton-ochieng@hotmail.co.uk| Milton
  2. 2. A.Methods of Billings for Consultancy or Services :Revenue Billing Method 1. Doubling/tripling your hourly wage of lead consultantName Cost Wage Benefit Admin ExpensesDirector 300,000.00 50,000.00Business - - - -DevelopmentStaff - - -Staff - - -Staff - - -300,000.00 - -Total Hours 192Income Per Hour/Month 1,822.92 X2Hourly Income 3,645.83Income Per Day 29,166.67Monthly Billing (USD) 758,333.33Concept based on doubling and Tripling The Consultancy Fees, such that a third rule appliesto Expense and Administration Cost**** Double or Triple the Lead Consultant wage+ benefit
  3. 3. B.Revenue Billing Method 2.Setting a daily rate for consulting (per diem rate for consulting) (USD)Number of Hours Worked 960Hourly rate USD 3,437.50Daily Billing 27,500.00Monthly Billing 715,000.00Name Cost Wage Benefit Hours Hourly RateDirector 300,000.00 50,000.00 192 1,822.92Business 120,000.00 - 192 625.00DevelopmentStrategy 70,000.00 192 364.58Finance and 70,000.00 192 364.58AdministrationStrategy/Marketin 50,000.00 192 260.42XyTotal 660,000.00 960 3,437.50
  4. 4. C.Revenue Billing Method 3.Setting Consultant Fees by the ProjectUSDValue addition 800,000.00****** consultant has the discretion to cost his or her service based on prior experience,skills, expertise and time and resources committed to service.******D.Revenue Billing Method 4.Setting consulting fees based on performanceBase rate plus 560,000.00Performance pay 168,000.00Share of ownership 25,000.00Monthly Billing 753,000.00Name Base Rate Performance Share Total Pay Pay OwnershipDirector 300,000.00 90,000.00 25,000.00 415,000.00Business 100,000.00 30,000.00 130,000.00DevelopmentXYZ 60,000.00 18,000.00 78,000.00YXZ 60,000.00 18,000.00 78,000.00ZYX 40,000.00 12,000.00 52,000.00Total Monthly 560,000.00 168,000.00 25,000.00 753,000.00BillingBilling method based on:******* Base Rate Fees******* Performance Pay****** Ownership fees
  5. 5. E.Revenue Billing Method 5.Setting consultant fees strategically using real-life data:Setting a consulting fee based on working daysDays HoursYear 2304Months 192Hours 8100% possible hours:- 20% spent on administration, running errands, paperwork, etc- 20% spent on marketing, networking events, website management,etc- 10% spent on other non-billablework50% spent actually working for pay192 hours x 50% utilization rate = 96 billable hoursConsidering bad debt rate as part of your consulting fee:Collection rate= 95%96 hrs X 95%= 91.2 hoursRate of Pay as Basis for ConsultingFees:How much would you earn if you were paid a salary at a company?Salary 280,000.00Benefits 50,000.00Net 330,000.00Hourly Consulting Fees:Salary / Billable Hours = Hourly Consulting Fee355,000 / 91.2= Ksh. 3,618.42 3,618.42Overhead rates for consultants:Rent or mortgage interest -
  6. 6. UtilitiesMaintenance and upkeep 30,000.00Property taxes -Internet 8,500.00Telephone 12,500.00Cell phone 10,000.00Office gadgets 2,000.00Internet connectionLaptop or desktop computerPrinter 3,000.00Shipping and postage 2,000.00Printer toner/ink 7,000.00Home office supplies 4,000.00Paper 2,000.00AccountingLegal services -Office furnitureBusiness licenses and permits 3,000.00InsuranceSubscriptions 3,000.00Professional associations 3,000.00Meals and entertainment for professional purposes 10,000.00Continuing education -Professional meetings, conferences and tradeshows - -Wages 260,000.00Total 360,000.00Man Hours 768Divide the total cost of your overhead by your billable hours: 360,000 / 768= Hourly Rate 468.75Hourly Rate:3,618.42 + 468.75= 4,087.17Profit margin and consulting fees:Total Hourly Charge + Mark -UP 10% (4,087.17+ 454.13)= 4,541.30Mark Up=
  7. 7. 4,087.17 X 10% Mark UP = 4,541.30Monthly Billing ( 8Hrs X 6 Days X4Weeks X 4,541.30 )=871,954.56Prepared By:Milton OnyiroFor Further Enquires contact - Milton-ochieng@hotmail.co.uk

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