You hear over and over again that freelancers shouldn’t be afraid to charge what they’re worth. But it can be equally confusing for freelancers to know what they should charge for. That extra, hour-long phone call to clarify project details, that new software you need for a particular job, the time you spend emailing back and forth — is that all fair game? Or are you expected to absorb those costs yourself? When I originally started freelancing before spending my days on Blinksale, I had no idea. I felt my way through it, which led to some pretty awkward situations. To help you avoid some awkward situations of your own, here are a few things I’ve learned.
- Be reasonable
The truth is, you can charge your client for anything you want. You can charge them for every minute you’re on the phone with them, every email you send, every mile you drive. There aren’t rules about these things. And there aren’t very many standards either, beyond just being reasonable. That said, what is reasonable? I think it’s reasonable to charge your client for any expense unique to a particular project. For example, if you are to do freelance work, you’d be totally right to charge clients for a Basecamp subscription if you’re only using Basecamp for that project. I tell my client this up front, and they see it on their invoice. If I needed to buy special supplies for the project — even something as simple as pencils and graph paper — I would charge the client for that, too. Any expense above and beyond your normal overhead is reasonable to charge for.
- It’s all about setting expectations
Like all relationships, client relationships are all about expectations. Disputes are rarely about what you’ve charged for, but rather what your client expected you to charge for. So just make sure your client understands up front how you operate. Agree upon expected expenses beforehand, and make sure it’s all in your contract. If you’re going to bill them for every phone call, make sure that’s in the contract before you invoice them $25 for a 10-minute conversation.
- Be willing to pay for learning experiences
When you first start freelancing, you pretty much don’t know anything. A lot of unexpected expenses present themselves, and you often feel underpaid. That’s okay. My advice is to not consider these losses, but instead to consider them learning experiences. Use what you’ve learned to make your next project or client engagement that much better and that much more profitable. If you revise your client’s bottom line as you go, just because you didn’t know any better, not only will you look like an amateur, but you’ll also infuriate your client. There is value in making mistakes. Learn from them, and do better next time.
- Eat some costs
If you’re unsure whether an expense should be billed to the client, just don’t do it. While, yes, it’s important to get paid what you’re worth, customer service is pretty important, too. When you can give your client an incredible experience, the money you will make from repeat business and word-of-mouth marketing will far out-value any nitpicky expenses you absorb on a project. Sure, it might be reasonable to bill a client for those miles you drove to and from their office, but it will also make you look like a tool.
- Put it all on the invoice
My accountant used to work for the IRS. He’s audited everyone from Enron to freelancers. His advice to me early on was very simple: Just be honest. Don’t hide anything. Ever. The same thing goes for invoicing your clients. Even if you’ve decided to be as nitpicky as humanly possible, make sure your nitpickiness is reflected on your invoice. Your client should know exactly what they’re paying for and what they’re getting. Better to have them balk than for them to find out later you pulled a fast one.
Deciding what to bill for is one of those tricky gray areas of running a business. Everyone does it a little bit different. But my point is, don’t be afraid to charge your client for more than just your time. Don’t be afraid to communicate these expenses to them up front and then to include these as line items on their invoice. Be reasonable, be honest, be generous, and you’ll do fine.