OT: Question for Self Employed Consultants

[cd_davis]

Looking for advice on "best practices". I consult in the CleanTech and Smart Cities segments for SMBs, mostly in metro Boston. A client in Knoxville TN has engaged my services for 10 hours plus or minus a week. Occasionally, I will travel to Knoxville for client meetings. For local clients where travel time is about an hour, I do not charge. But given travel to Knoxville by air is 8-9 hours door to door, what are best practices regarding charging for travel time of this nature? There is an opportunity cost. I should mention I'm engaged long term with another client 3 days weekly.
Advice appreciated....
Chris

[Tony T]

Not what you asked, but are you required to allocate income (and pay taxes) to TN for the time you're in that state?

[cd_davis]

Probably not, since I believe TN does not have state income tax.

[Tony T]

You should look into allocating income to TN, as that will mean less taxable income in MA

[cd_davis]

If you are MA resident, state income tax is due on all income. Live free or die NH with no income tax is walkable and I must pay MA income tax on income earned there.

[ripvanrando]

I always charge travel time from portal to portal.

I have had a few prospective clients balk and I did not accept an engagement.

The only concession I will make is international travel if the Client pays Business or First. Otherwise, it is my standard billing rate from my home to the hotel in the host country. I am not on vacation and any activity to support a client that take my time gets billed.

Industry, expertise, need to work, and other factors come into play.

[Climb01742]

Charging for travel time, once they're a client, is absolutely proper. You can charge a day rate or a per hour rate. If you're pitching them as a client, that is an investment and not billable, IMO. But once they're a client, and you state it as part of your working agreement, billing for travel time is standard practice, I think. I have clients in NYC and doing a one-day Acela run for a presentation is a 12-hour day and I bill it, but only as a regular 8-hour day. One note: I bill the actual travel costs as an unmarked-up pass through business expense with proper documentation (paid in a separate check), while the travel time is part of compensation.

It does get a little complicated when the work or presentation is by phone. For example, this coming Monday I'm presenting work via phone and computer. Should last about 90 minutes and I won't bill for that time, partly because I'm so happy not having to get on that darn train!:rolleyes:

[NHAero]

My guideline (consultant and speaker about high performance buildings) is days away from the office. I live in MA and did a couple of two day conferences in WI and IL. I charged for four days since a day on each end was shot traveling. When traveling I try to use that time towards the client's benefit. If for some reason, not common, I can get a few hours of useful productive work on another client's project while traveling, I charge for that time and deduct that time from the client I'm traveling for. Basically, the guideline is, how many hours of productive billable time am I giving up when I could have stayed in the office and worked?

That said, it's a special circumstance where I bill more than eight hours for a day even if I am traveling for five and working eight. I live on Martha's Vineyard and work sometimes in the Boston area and take a ferry and bus. If I work for a day in town, and then write up notes or report on the way home, I do bill for those hours in addition to the time in town, because I would have spent that time the next day.

Living on an island, I don't penalize clients in MA, RI. NH, etc., because it takes so long to reach them. So for example I'm going to a client in western MA next week and need a very early start at the job site, so I'm leaving the evening before and do my travel outside of work hours. So I get a full day of work in, then ferry and drive on my own time. I feel I need to be competitive with folks closer to the client.

This is all different than having a long term client requiring travel, but hope it helps. PM me if you want more info.

[bicycletricycle]

I work for a small consulting office, short 1-2 hour drives we throw in for free. As soon as we are getting on an airplane we are charging for travel time.

[fishwhisperer]

Agree with the folks that say charge. My business often calls for very long flights, so we charge "travel time" which is typically 50-70% of my hourly rate depending on the client. If while on the plane I'm working on another client's work, I bill my standard rate to that client and the farther afield client gets my travel time for "free."

My philosophy has always been to bill all hours accurately as a rule. I find it an essential reference when trying to scope out how long certain projects *actually* take.

[Coalfield]

Depends on the relationship. I used to ask only for travel expense reimbursement, when flying. But I was hungry and did not want any questions asked regarding my invoices.

[zennmotion]

Looking for advice on "best practices". I consult in the CleanTech and Smart Cities segments for SMBs, mostly in metro Boston. A client in Knoxville TN has engaged my services for 10 hours plus or minus a week. Occasionally, I will travel to Knoxville for client meetings. For local clients where travel time is about an hour, I do not charge. But given travel to Knoxville by air is 8-9 hours door to door, what are best practices regarding charging for travel time of this nature? There is an opportunity cost. I should mention I'm engaged long term with another client 3 days weekly.
Advice appreciated....
Chris

I have been consulting full time for the past 5 yrs or so, but my business involves a lot of international travel, where there are standards set by the US State Dept that most of the industry follows, generally 1 day (8hrs) each way is compensated- even for trips that can be as long as 30+hours door-door. I think that you should charge for travel time if the client meetings are deemed necessary by the client to be necessary to attend in person rather than conference line. That said, this should be expressly established in the consulting agreement, or at least clarified in writing or by Email. Some of my clients are non-profit and I cut them breaks where appropriate, but a private sector is in business to make money, and you need to make a living. People who complain about high consulting hourly rates don't often understand how much unbillable time there is- for initial pre-contract meetings and negotiations, travel, etc not to mention direct and indirect costs, health insurance, other benefits. In my case, I tend to be able to bill for only 175-200 days/year and that's working full time, no vacations, lots of weekends, missed holidays etc. To bastardize a phrase from another source, freedom isn't free... So absolutely, you should charge for travel time, travel costs and even a reasonable per diem for trips to the client's place of business. This of course does not include the first pre-contract trip that is essentially for marketing your services, you can write that off your taxes. For another perspective, as someone who has also managed consultants as a Director/employee, I would be wary of a consultant who appeared a little too eager to give away the store for my business- are they that desperate for my contract, are they any good? Bottom line, charge for travel, but it should be made clear with the client that you are doing so before the trip, clients hate surprises on the invoice.

[Joel]

Thankfully I don't travel a ton anymore with my consulting.

For overseas work, I generally bill 50% of hourly rate for travel.

For domestic work, I don't bill hours, but usually I'm using that plane time for work, so there's not that much lost time.

Importanly, I've been blessed with some long term engagements with great clients, and some of the 'dead' time is part of the 'investment'.

If it was a small quick gig that involved a ton of LA <->JFK type flights then I'd probably charge.

Also, for the sectors I consult in its a little unusual for consultants to charge or travel hours.

All travel costs however are invoiced at out of pocket as seperate invoice.

Hope this helps.

[zennmotion]

I don't know the OP's industry at all, but one thing that might be worth keeping in mind is how project budgets are often structured- consulting time may be budgeted as labor, or (more often and more proper accounting-wise) may be budgeted as direct costs coming under a different budget line/CLIN. Knowing this (by asking your client) can help with the decision if you're hesitating to charge- charging for travel may not be an issue for them at all as Direct Costs are often over-estimated in project budgets, while labor costs are often underestimated- human nature to underestimate the time it takes to do something.

[Bradford]

I charge for value, not time. A set rate per week is the least I will charge, but by month or total project is preferable. With that structure, I can build in what ever travel time is necessary.

I think billing by the hour devalues my work, so I won't sell it unless I have to, then I bill a professional week between 40 and 45 hours on a regular basis. Some weeks I work more, some less, but I always bill the same. As long as I get my rate, I don't care how many hours of travel I have. Whenever possible, I fly at night and work as many hours as I can during the days.

Last week, I travelled to Dallas on Monday and Tuesday. I was in a three hour meeting on Monday and an hour long meeting in Tuesday and the rest was travel. I billed full days to my clients both days because that is the value I delivered. Since my clients appreciate what I deliver, they never have a problem with it.

[grawk]

I've done any number of different things, depending on the contract. Generally I bill for actual travel time for anything over 2 hours, up to 8 hrs. Beyond 8 hours, it depends on a lot of things.

That varies based on the nature of the client, how I'm feeling, and how much I want to be where I'm going.

[Joel]

Bradford,

Good point, when it's a whole day 'spent' for short meetings like that. Then day rate kicks in.

[zennmotion]

All youse guys do realize while we're yawing about consulting, an American woman is halfway through beating the hour world record???? I suggest a blackout in the usual bloviation and send your energy to the drome in CO for another half hour!!::hello:banana::beer::hello:
http://velonews.competitor.com/2016/02/news/live-evelyn-stevens-hour-record_396379

[ripvanrando]

If I am working out of my home and a client cancels a planned 2 hour teleconference, it irks me; so, I just go out on my bike and do not invoice the time. Probably a mistake not to bill but good will...

I can't ride my bike on a plane, so, I invoice that time.


Bradford,

Good point, when it's a whole day 'spent' for short meetings like that. Then day rate kicks in.

[livingminimal]

I do some Non-Proft organizational consulting on the side of my real job. At my real job, also in Non-Profit, when I am traveling, I'm getting paid. If I were traveling for consulting I would expect the same.

[paredown]

My lovely wife works as a consultant/freelancer.

She says she would weigh how lucrative the contract was, but generally local travel for meetings on behalf of a client would be considered all in a day's work, while travel outside of the NYC metro area for trade shows or client meetings she would generally charge the client, since she can't really do anything else away. At the very least it would be a per diem and travel costs.

OTH, some of her stuff is client representation, so she will travel as part of the contract, and not be directly paid, although she would still bill the travel cost.

[cd_davis]

To all of you, with your very thorough and considerate replies, thank you very much for the non-billable minutes.
Love the Forum and often wonder how many hours Old Potato, as an example, and others provide gratis cuz they love cycling.
Chris