Author Topic: Independent consultants -- how do you charge for travel?  (Read 103952 times)

NeverWasACornflakeGirl

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Independent consultants -- how do you charge for travel?
« on: May 28, 2014, 11:54:38 AM »
So, I've worked with lots of independent consultants, but never been one myself.  Next month I'll retire, and start my retirement gig, working in my own LLC as an independent IT consultant. 

A consultant I know, who has his own company, is going to contract work out to me (10 -15 hours a week from home), and has asked me to do some limited travel.  He has said that all of the travel is paid for by the client.  I'm not sure how to bill time when I'm traveling.  Do I bill only for time when I'm "on the clock" directly doing work and/or in meetings?  Do I bill for an 8-hour day even if I only do 4 hours of work, since I'm not at home?  Do I bill for days that I'm traveling but not actually working?  Or do I bill some other way?  Such as on a per project or per day basis?  Travel will be both within the US and international.

I don't know what the industry standard is!

Thanks so much for your input!!  I feel incredibly lucky to have this opportunity, and to have such a great community that I trust so much that I can come ask!

Freedom2016

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Re: Independent consultants -- how do you charge for travel?
« Reply #1 on: May 28, 2014, 12:31:05 PM »
Industry standards are going to vary, so YMMV.

In my industry,
--Travel expenses are billed at cost and passed through to the client. All receipts are included.
--Sometimes, clients will instead opt to pay a set "per diem" rate or an all-in travel stipend. That one can be a gamble as sometimes the consulting company "wins" (actual expenses come in below that figure) and sometimes they "lose" (actual expenses exceeded that amount). Sometimes the consulting company passes the entire stipend through to the contractor; other times the contractor will still only be reimbursed the actual travel expenses. Discuss with the firm you are contracting for.
--My firm as a general rule does not charge for travel time - we consider it a "cost of doing business." However, a "sister firm" of ours will, for long-haul travel (i.e. international) charge a travel day rate equal to 50% of our on-site rate, and pass that amount through to the contractor.
--In short, in my industry it often comes down to how the consulting firm has contracted the work with the client. Our contractors have little negotiation power to insist on being paid for their travel time if we aren't charging the client for it.

tmac

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Re: Independent consultants -- how do you charge for travel?
« Reply #2 on: May 28, 2014, 12:52:43 PM »
We charge 50% of time for any travel outside of our immediate area. If we're flying or need lodging, that cost gets billed as well. And if we're flying or a car passenger and can spend the travel time working, we bill the 100% rate, not the 50%. Once on-site, we bill for the exact amount of time worked, but if we're watching progress bars and CAN do other client work, we do and charge the other client for that time.

curler

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Re: Independent consultants -- how do you charge for travel?
« Reply #3 on: May 28, 2014, 01:35:23 PM »
Our policy is to bill (at 100% of normal rates) for time that is either:  1) during normal business hours or 2) spent doing productive work for the client.  So if I am traveling (and not doing productive work) on a Sunday, I don't bill, but on a Monday I would.  The theory is that on a Monday they are taking me away from other work that I could have been billing on, whereas on a Sunday I wouldn't have been billing anyway.  Not sure I agree with the logic, but that is what we do.

Christof

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Re: Independent consultants -- how do you charge for travel?
« Reply #4 on: May 28, 2014, 01:50:17 PM »
We bill 100% for short visits. Go to client for an hour, work onsite for another and go back is three billable hours. I try hard to avoid this kind of work. Usually we are on site for a whole day, so we charge our daily rate and do not bill travel time separately. My employees are paid for travel time, though there is an upper limit of 10 hours per day. They are not required to work during travel, so that seeems fair to me. Travel expenses always get billed.

RetireAbroadAt35

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Re: Independent consultants -- how do you charge for travel?
« Reply #5 on: May 28, 2014, 02:01:48 PM »
IME:
* Only bill the client for productive time, not including travel.  I've seen it done both ways though.
* Bill client for actual lodging, transportation expenses + daily per diem to cover the incremental costs of eating out versus eating at home, buying extra toiletries, using a cleaning service rather than your own washing machine, etc. 

worms

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Re: Independent consultants -- how do you charge for travel?
« Reply #6 on: May 28, 2014, 03:07:40 PM »
In-country I'd only charge for actual working time. Overseas, I'd charge from arrival to departure (ie the time that I am available) but not for the out and back travel time.  Once there, I'd be including days to travel between sites or go up-country.

rmendpara

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Re: Independent consultants -- how do you charge for travel?
« Reply #7 on: May 28, 2014, 03:23:17 PM »
Depends on industry standard (IT consulting vs management consulting vs ABC consulting, etc).
I think most consultants (my point of reference is friends/acquaintances in strategy consulting at Deloitte, Accenture, and Mckinsey), charge clients their bill rate for only "productive time", which is referred to as time spent on work for the client. It doesn't matter whether it's at the client's office, at the consultant's office, home, beach, taxi, whatever.

Expenses get billed one way or another... either built into the billable rate, or a separate item. I think client's usually prefer a separate line, just so they can see you're not dropping hundreds on models & bottles and going out to get $50 dinners every night.

As far as the travel time... it depends. I think for intl travel, you could charge a discounted rate for unproductive time, since this may require you to travel on a weekend or to be unavailable to work for an extended period while in transit.

I would say, in general, for domestic trips, not worth the hassle. For intl trips, I'd come up with a fair amount to charge for "unproductive time" while traveling.

Cassie

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Re: Independent consultants -- how do you charge for travel?
« Reply #8 on: May 28, 2014, 03:26:05 PM »
I bill slightly more then half of my professional rate to travel and also .56 for mileage.  If I need a hotel I also bill for that but buy my own food, etc.  Some places are 6 hours away so it would not pay for me to do the work if I did not get paid to drive. All my clients have been fine with this. 

NeverWasACornflakeGirl

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Re: Independent consultants -- how do you charge for travel?
« Reply #9 on: May 28, 2014, 04:06:59 PM »
Thank you all very much!  From some of the research I've done today it looks like many consultants bill clients for travel time as they are being taken away from other work they could be billing for.  It seems like it partly matters, too, how much the consultant wants the business, whether they want to encourage or discourage on-site visits, whether it's a long-term client, etc. 


genselecus

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Re: Independent consultants -- how do you charge for travel?
« Reply #10 on: May 28, 2014, 04:08:33 PM »
For what it is worth, the company I work for charges expenses at cost, but they set up a clause on meals that effectively acts as a per diem (in other words I bill for the cost of the hotel and taxi, but I just bill a flat daily rate for my three meals).

As for travel, my company does things similar to what others have been saying. We bill for time that we work for the client. So if I work from the home office, on a plane, train, or bus, or at the client I bill the client. When I'm on a flight and I'm not working (sleeping, watching a movie, etc.) I still log the time for my company, but that time doesn't go to the client. Something to keep in mind is that just because you are working an hour for your company, doesn't mean your company will include that hour in the invoice to the client. We recently did a project where we had some outside consultants/subject matter experts and we only billed about 75% of their time to the client. Sometimes we would ask them to do things that weren't completely applicable to the project, or we would use their time to provide information which should have been known by our team (and thus we shouldn't bill for it). Similarly, the company you are contracting for may not have a cap on hours but their contract does, so you could work 10 hours a day, but your company only bills the client for 9 hours. I would assume you would still be paid your rate for 10 hours, even though they aren't being paid for all 10 (and remember, they are probably making a 50-100% markup on your time).

Really, you just need to work it out with the company you are contracting for. They'll probably have a standard that they use.

El_Viajero

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Re: Independent consultants -- how do you charge for travel?
« Reply #11 on: February 10, 2017, 07:17:38 AM »
I figured I'd resurrect this since I just had the same experience as well how to bill for on-site meetings and travel expenses as an independent consultant.

I've been an almost 100% remote worker for years, so it was weird for me to fly to another town and meet with someone.

In my case, I included a line in my proposal stating that the client would pay for round-trip airfare and transport to and from the airport. I have family in the destination city, so I'm staying with them instead of billing the client for hotels and dinners.

I'm also charging an additional hourly fee for productive, on-site time.

The client approved the proposal and the scope, so I guess the arrangement was ok with them. I just sent my first invoice that included all travel expenses + on-site hourly fees. Unless they simply didn't read the terms of our agreement, I don't expect any complaints.

FWIW, I'm a communications consultant and copywriter. This sort of thing could vary by industry.

brian313313

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Re: Independent consultants -- how do you charge for travel?
« Reply #12 on: February 10, 2017, 02:10:18 PM »
It varies. I have a cousin who starts the clock as soon as he gets to the airport. He's an engineer and repairs hospital equipment (high-dollar) so he may only be on-site for a few hours. They need him immediately though and his other option would be to raise his rate significantly higher. Most of his clients prefer that way since if it takes longer than expected the hourly rate is lower.

I have worked for a few consulting companies as a software engineer, and none of them paid travel. We would always get the laptop out to do billable work while travelling. Some non-working travelers want to talk and don't realize that if I want to spend time with family when home, I gotta work on the fly.

trollwithamustache

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Re: Independent consultants -- how do you charge for travel?
« Reply #13 on: February 10, 2017, 03:18:56 PM »
El Viajero - you rock sir! to get the higher rate to cover costs and have them directly cover costs is a good deal.

Whatever you settle on, get it in writing, either in your contract/work agreement or at least in emails. Travel can be a super touchy subject at some companies and completely not at others.

I charge travel costs either at cost plus 10% and bill most of my travel hours as billable. Right now, my one travel client is 3-4 hours away, he pays for 3 hours each way.  If the clients procurement department needs a win by squeezing my balls I agree to no mark up on travel costs. As I said travel can be touchy for some reason and I know some guys just charge a way higher hourly rate for onsite and use that $$ to cover the travel and for some reason that's considered a better deal for the client.

Also, understand your billing cycle time. I have an intermediary engineering company on my travel client. So I bill them, they bill the customer, customer pays them, then they pay me. I can be out travel $$ for 6 to 8 weeks if there are any questions.