4/24/2012

Prepared By: Milton- email:Milton-ochieng@hotmail.co.uk| Milton

PRIVATE

CONSULTANT

BILLING

GUIDE

Methods of Billings for Consultancy or Services

A.

Methods of Billings for Consultancy or Services : Revenue Billing Method 1. Doubling/tripling your hourly wage of lead

consultant

Name Cost Wage Benefit Admin Expenses

Director 300,000.00 50,000.00 Business Development

- - - -

Staff - - - Staff - - - Staff - - -

300,000.00 - - Total Hours 192

Income Per Hour/Month 1,822.92 X 2

Hourly Income 3,645.83

Income Per Day 29,166.67

Monthly Billing (USD) 758,333.33 Concept based on doubling and Tripling The Consultancy Fees, such that a third rule applies to Expense and Administration Cost

**** Double or Triple the Lead Consultant wage+ benefit

B.

Revenue Billing Method 2. Setting a daily rate for consulting (per diem rate for consulting)

(USD)

Number of Hours Worked 960

Hourly rate USD 3,437.50 Daily Billing 27,500.00 Monthly Billing 715,000.00 Name Cost Wage Benefit Hours Hourly

Rate

Director 300,000.00 50,000.00 192 1,822.92 Business Development

120,000.00 - 192 625.00

Strategy 70,000.00 192 364.58 Finance and Administration

70,000.00 192 364.58

Strategy/Marketin 50,000.00 192 260.42 X

y

Total 660,000.00 960 3,437.50

C.

Revenue Billing Method 3. Setting Consultant Fees by the Project

USD

Value 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 performance

Base rate plus 560,000.00

Performance pay 168,000.00

Share of ownership 25,000.00

Monthly Billing

753,000.00

Name

Base Rate

Performance Pay

Share Ownership

Total Pay

Director 300,000.00 90,000.00 25,000.00 415,000.00 Business Development

100,000.00 30,000.00 130,000.00

XYZ 60,000.00 18,000.00 78,000.00 YXZ 60,000.00 18,000.00 78,000.00 ZYX 40,000.00 12,000.00 52,000.00 Total Monthly Billing

560,000.00 168,000.00 25,000.00 753,000.00

Billing method based on:

******* Base Rate Fees

******* Performance Pay

****** Ownership fees

E.

Revenue Billing Method 5.

Setting consultant fees strategically using real-life data: Setting a consulting fee based on working days Days Hours

Year 2304 Months 192 Hours 8 100% possible hours:

- 20% spent on administration, running errands, paperwork, etc - 20% spent on marketing, networking events, website management,

etc - 10% spent on other non-billable

work 50% spent actually working for pay 192 hours x 50% utilization rate = 96 billable hours

Considering bad debt rate as part of your consulting fee:

Collection rate= 95% 96 hrs X 95%= 91.2 hours Rate of Pay as Basis for Consulting

Fees: How much would you earn if you were paid a salary at a company?

Salary 280,000.00

Benefits 50,000.00

Net 330,000.00

Hourly Consulting Fees: Salary / Billable Hours = Hourly Consulting Fee

355,000 / 91.2= Ksh. 3,618.42 3,618.42 Overhead rates for consultants:

Rent or mortgage interest -

Utilities

Maintenance and upkeep 30,000.00

Property taxes -

Internet 8,500.00

Telephone 12,500.00

Cell phone 10,000.00

Office gadgets 2,000.00

Internet connection

Laptop or desktop computer

Printer 3,000.00

Shipping and postage 2,000.00

Printer toner/ink 7,000.00

Home office supplies 4,000.00

Paper 2,000.00

Accounting

Legal services -

Office furniture

Business licenses and permits 3,000.00

Insurance

Subscriptions 3,000.00

Professional associations 3,000.00

Meals and entertainment for professional purposes 10,000.00

Continuing education -

Professional meetings, conferences and tradeshows -

-

Wages 260,000.00

Total

360,000.00

Man Hours 768

Divide the total cost of your overhead by your billable hours:

360,000 / 768= Hourly Rate 468.75

Hourly Rate: 3,618.42 + 468.75= 4,087.17 Profit margin and consulting fees: Total Hourly Charge + Mark -UP 10% (4,087.17+ 454.13)= 4,541.30

Mark Up=

4,087.17 X 10% Mark UP = 4,541.30 Monthly Billing ( 8Hrs X 6 Days X4Weeks X 4,541.30 )=

871,954.56

Prepared By:

Milton Onyiro

For Further Enquires contact - Milton-ochieng@hotmail.co.uk