Ethical Billing Practices Depend on Your Honesty—and Accuracy

Ethical Billing Practices

As a professional services provider, you should only charge for hours you’ve actually worked. In turn, your client should pay for that time. However, recent research shows that hourly time billing practices can lead to over-charging clients and over-working employees.*

Often, billable hours are recorded in hopes of meeting financial targets; the more an employee earns for the company, the more valuable that employee is. In such an environment, performance is measured by the number of billable hours submitted—which leads to employees “padding” their timesheets to make quotas. Even more disturbing, researchers found that some professional services firms tend to place clients into groups according to their sensitivity to billing, and charge or overcharge accordingly. Clearly, that’s not ethical.

For consultants, maximizing income is always top of mind, and consequently, scope creep can happen by “accident.” That’s not ethical either.

Of course, this type of behavior is not the norm. For most organizations, ethical concerns over billing practices are a result of inaccurate time tracking. For instance, a graphic designer spends 15 minutes tweaking a website design for Client A then gets called into an impromptu meeting for Client B. The meeting starts 15 minutes past the hour, so it’s really only 45 minutes long. But the designer forgets about the website work for Client A and mistakenly bills the full hour to Client B. Client A gladly pays a smaller bill, while Client B feels cheated.

For many professional services organizations, time accounting is arbitrary and inconsistent, and inaccuracies lead to lost trust and a bad reputation. Worse yet, consultants may fail to log all the time they actually spend on projects, and they end up selling themselves short. How do you ensure ethical—and fair—billing practices when time tracking mistakes run rampant?

Less Hassle = More Honesty

Employing an automated time tracking solution for billable hours encourages more ethical billing practices by eliminating errors, and creating accountability and transparency. But it has to be easy to use; otherwise, consultants may use it incorrectly, inconsistently or not at all. Here are some key attributes of time tracking software that might just help you be more fair and ethical in your billing practices, and ensure you get paid for the work you’ve done:

  • Cloud-based for easy access: With time clock software accessible over the web, consultants can easily log their time from anywhere—even on a mobile device when they’re on the road.
  • All clients, all in one place: A centralized solution that enhances visibility into all billable hours and items by client encourages completeness and accuracy.
  • Automated email reminders and reports: Reminding consultants to report their time consistently and completely—and checking on it—creates accountability and helps to ensure all billable time is captured.
  • Simple, easy to use interface: Clearly defined fields, intuitive navigation and a unified view simplify time capture and eliminate confusion.

Remember, your clients expect and trust you to be truthful in your billing practices. Anything less than truthful is not only unethical; it is a violation of your clients’ trust. Implementing time tracking software that encourages accurate time billing and provides a detailed audit trail will help you get paid for all the time spent on your projects and avoid disputes.

*“The Tyranny of Billable Hours,” Cass Business School, London, August 17, 2012.

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Paul Boscacci
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