Should you bill hourly for project management?

| March 24th, 2009 | ,

We think so, and we do so. Here are some points to ponder while considering whether or not you should be billing hourly for project management.

  1. Project management hours typically account for 5% to 20% of a projects total hours
    That is a lot of time to be giving away for free. And when you have a small team of five, one of whom is a dedicated project manager, the other four all have to pull a little extra weight to bill enough hours to get everyone paid.
  2. Consider that without a project manager or project scheduling software, the project will most likely take 5 to 20% longer anyhow or fail completely
    Online project management software can help keep designers and developers in touch with one another, and your company in touch with its clients.  Without project management, everyone is drowning in a sea of details.
  3. Crosstrain the project manager
    A small business usually requires its employees to wear multiple hats anyhow, so why not crosstrain the project manager? Our PM learned some HTML and Linux system administration skills, which goes a long ways in keeping simple requests off our team, and adds extra billable skills to his portfolio.
  4. Project management is billable because of the expertise of managing a web design or development project
    A project manager can answer most questions faster and at a lesser hourly rate without having to pass requests along to the billable employees, sparing your designers and developers a lot of time spent on trivial tasks. And, in the long run, saving your clients money.
  5. Consider billing at a lower hourly rate for project management
    Many clients won’t like it that you are charging hourly for project management. To help offset this, we bill project management at a lower rate than our other work types. We don’t mean to devalue the work of the project manager. What we are doing is setting a precedent that gets clients used to paying something for project management, and puts them at ease by showing them it is our lowest billable rate.

Finally, if you are considering implementing a project management hourly rate, or need help convincing the client that it is a valid billable service, here is the definition we provide in all our contracts to help quantify the importance of project management:

Project management is the defining, planning, scheduling, and controlling of the tasks that must be completed to reach your goal and the allocation of the resources to perform those tasks. Project Management involves balancing the tradeoffs between time, cost & scope to create the best possible end product.

Clients want the best you can offer them. Billing hourly for project management is just one component in delivering that to them.

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A collection of useful tips, tales and opinions based on decades of collective experience designing and developing web sites and web-based applications.

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Intervals is online time, task and project management software built by and for web designers, developers and creatives.
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John Reeve

John is a co-founder, web designer and developer at Pelago. His blog posts are inspired by everyday encounters with designers, developers, creatives and small businesses in general. John is an avid reader and road cyclist.
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Michael Payne

Michael is a co-founder and product architect at Pelago. His contributions stem from experiences managing the development process behind web sites and web-based applications such as Intervals. Michael drives a 1990 Volkswagen Carat with a rebuilt 2.4 liter engine from GoWesty.
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