Sinking in contract negotiations and hourly rates complexity? Here is an easy way to deal with it

Throughout their lifetime professional services companies introduce many ways to bill clients. Businesses apply mostly two types of agreements: Fixed fee and Time & Material. Fixed fee agreement caps the amount billed to an amount agreed in advance with the client. Time & Material is simply billed by the hour, day, month etc. and each employee is assigned a certain rate. Complexity occurs though once client base increases and rates vary by client, project and function of a resource. Today we will cover these cases.

Reality check

Most managers revert to spreadsheets as a database for employee rates. Once the month is over they export all employee times and apply the corresponding rate to each employee in order to invoice clients. It is generally a simple procedure but business practices involve discounts for certain clients, projects and resources. These dimensions contribute to increasing complexity and keeping track of actual rates as well as applying them to each client becomes a real burden.

Less is more

One way to keep complexity under control is to apply a unified pricing approach for all dimensions. This results in fixed rates for all employees and clients but comes with the obvious disadvantage of little price flexibility and discounts are to be applied at later stage.

At Cronforce we have taken a different approach. Instead of heading for extra simplicity we have put together mechanisms to ensure rates are flexible and at the same time manageable.

How does it work?

Default Hourly RatesSimply said Cronforce uses default template for employee rates and then offers you a rule mechanism to override the default ones. The default rate table (Default Hourly Rates) allows you on one page to assign rates to people based on Job role and Seniority (if relevant). It is a strong way to visualise rates evolution for each Job role and Seniority thus enables you to spot mistakes early in the process. The Rate Rules table allows you to override the default rates by applying filters per clients, projects, employees, job roles and then connect them with a different rate value. Rate options include increase or decrease with an amount, increase or decrease with percents, fixed value. In addition, the system distinguishes between cost and billable rates so you can not only track billable amounts for your clients but also internal cost.

Example: Discount 10% all default rates for a client

  • Select All Employees
  • Select All Job roles
  • Select All Seniority
  • Select Client
  • Select All projects
  • Select billable rate as the one being modified
  • Select % decreaseand enter 10%

Hope this helps and keep in mind we are available 24/7 to help you with any requests – feel free to contact us!

About Cronforce

Cronforce blends business critical tools for small and medium sized businesses with powerful analytics. A one of a kind fusion of dashboards as informative as Google Analytics and business modules as powerful as SAP that provides you and your clients with real-time overview of business and project developments. The platform is operating in the cloud which facilitates day-to-day business and enables managers to make data-driven decisions and increase efficiency.

The Cronforce.com Team