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Fees, Hourly Rates and Invoices
Fees, Hourly Rates and Invoices
What is an Hourly Rate?What is an Hourly Rate?• The rate of pay per hour for a job being performed. An ‘hourly’ worker may be assigned to various rated jobs during any pay period and is paid the ‘rate’ applicable to each job while working on it.
• The rate of pay per hour for a job being performed. An ‘hourly’ worker may be assigned to various rated jobs during any pay period and is paid the ‘rate’ applicable to each job while working on it.
Why choose to charge an hourly rate?Why choose to charge an hourly rate?• Some companies decide to charge hourly rates to smaller companies with simple and quick projects.
• Some freelance people find it easier to charge hourly rates because some jobs can take a lot longer than others and they are being paid for exactly the time they spent on the job.
• For a skilled designer the hourly fee can be a lot more than other lower designers.
• Some companies decide to charge hourly rates to smaller companies with simple and quick projects.
• Some freelance people find it easier to charge hourly rates because some jobs can take a lot longer than others and they are being paid for exactly the time they spent on the job.
• For a skilled designer the hourly fee can be a lot more than other lower designers.
Pros of Hourly RatesPros of Hourly Rates
• It is a lot easier to provide a break down of what has been done on the job and by who.
• You can charge the customer for exactly the amount of time that is taken on the job.
• It is a lot easier to provide a break down of what has been done on the job and by who.
• You can charge the customer for exactly the amount of time that is taken on the job.
Cons of Hourly RatesCons of Hourly Rates
• Clients can put a cap on how many hours you work on a project.
• It can be hard to chose a basic hourly rate.
• The hourly rate can change depending on the specific job being done.
• Clients can put a cap on how many hours you work on a project.
• It can be hard to chose a basic hourly rate.
• The hourly rate can change depending on the specific job being done.
How to Work Out Hourly Rates?How to Work Out Hourly Rates?• You first need to work out your fixed expenses and your average unfixed expenses and work out how much you need to make in a month.
• You would then divide this by the average hours you work in a month and you will come up with a good ball park figure.
• Hourly rates also differ quite dramatically depending on the job.
• You first need to work out your fixed expenses and your average unfixed expenses and work out how much you need to make in a month.
• You would then divide this by the average hours you work in a month and you will come up with a good ball park figure.
• Hourly rates also differ quite dramatically depending on the job.
Average Hourly RatesAverage Hourly Rates
• Layout Production £50• Creative Concepts £85 • Illustration £50-£60• Animation £85-£100• Digital Photography £55-£135Changes to final designs will be
charged at up to £100 an hour
• Layout Production £50• Creative Concepts £85 • Illustration £50-£60• Animation £85-£100• Digital Photography £55-£135Changes to final designs will be
charged at up to £100 an hour
What is the difference between Hourly Rates and Fees?
What is the difference between Hourly Rates and Fees?
• A fee is a set amount payable for a particular job where as hourly rates are amounts charged per hour spent on the project.
• A fee is a set amount payable for a particular job where as hourly rates are amounts charged per hour spent on the project.
What is a Fee?What is a Fee?
• A fee is the price one pays as a professional service.
• Fees usually allow for overheads, wages, costs and markup.
• A fee is the price one pays as a professional service.
• Fees usually allow for overheads, wages, costs and markup.
Why Choose fees?Why Choose fees?
• Some companies decide to charge fees to larger companies who provide regular income to the company.
• Fees are easier to charge when lots of different people have been working on a particular project.
• Fees are also easier to charge on big ongoing projects.
• Some companies decide to charge fees to larger companies who provide regular income to the company.
• Fees are easier to charge when lots of different people have been working on a particular project.
• Fees are also easier to charge on big ongoing projects.
Pros of FeesPros of Fees
• It is easier to charge fees for big jobs
• It is easier to charge fees for regular jobs.
• Fees are easy to charge when you know exactly what the client wants.
• It is easier to charge fees for big jobs
• It is easier to charge fees for regular jobs.
• Fees are easy to charge when you know exactly what the client wants.
Cons of FeesCons of Fees
• Fees are usually agreed at the beginning of a job but there can be unexpected costs throughout the job.
• Fees can be hard to work out because lots of different people may work on one job.
• Fees are usually agreed at the beginning of a job but there can be unexpected costs throughout the job.
• Fees can be hard to work out because lots of different people may work on one job.
How to Work Out Fees?How to Work Out Fees?
• It all depends on what is being designed and who is designing it.
• The designer would also have to work out how much they need to make in a month and then charge the fees accordingly.
• Fees depend on location.• Fees can also be dependant on the size of the job.
• It all depends on what is being designed and who is designing it.
• The designer would also have to work out how much they need to make in a month and then charge the fees accordingly.
• Fees depend on location.• Fees can also be dependant on the size of the job.
Average FeesAverage Fees
• One off items such as flyers and posters £250
• Brochures, newsletters and simple business literature £500 + expenses.
• Corporate design, logos, IDs and company stationery £1000+expenses.
• Branding, website design and graphics: £2000 + expenses.
• One off items such as flyers and posters £250
• Brochures, newsletters and simple business literature £500 + expenses.
• Corporate design, logos, IDs and company stationery £1000+expenses.
• Branding, website design and graphics: £2000 + expenses.
Average Fees (cont..)Average Fees (cont..)• Periodicals and magazine design, sales and marketing campaigns and multi-media projects: A monthly retainer arrangement + expenses (6 months minimum).
• Press releases and PR campaigns: A monthly retainer arrangement + expenses (12 months minimum).
• Advertising campaigns: annual contract paid as a monthly retainer. Creative fees based on a 15% mark-up of total advertising spend (a standard agency mark-up).
• Periodicals and magazine design, sales and marketing campaigns and multi-media projects: A monthly retainer arrangement + expenses (6 months minimum).
• Press releases and PR campaigns: A monthly retainer arrangement + expenses (12 months minimum).
• Advertising campaigns: annual contract paid as a monthly retainer. Creative fees based on a 15% mark-up of total advertising spend (a standard agency mark-up).
What is an Invoice?What is an Invoice?
• A written record of goods or services provided and the amount charged for them, sent to a customer as a request for payment
• A shipment of goods that is recorded on an invoice
• A written record of goods or services provided and the amount charged for them, sent to a customer as a request for payment
• A shipment of goods that is recorded on an invoice
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What is an Invoice? (Cont..)What is an Invoice? (Cont..)• An invoice is business document issued by a seller to the buyer.
• This indicates the:-• 1. products
• 2. quantities • 3. Agreed prices for products or services the seller has provided the buyer.
• An invoice indicates the customer must pay the seller, according to the payment terms.
• An invoice is business document issued by a seller to the buyer.
• This indicates the:-• 1. products
• 2. quantities • 3. Agreed prices for products or services the seller has provided the buyer.
• An invoice indicates the customer must pay the seller, according to the payment terms.
What is on an Invoice?What is on an Invoice?
• The word "invoice”• A unique reference number
(in case of correspondence about the invoice)
• Date of the invoice.Name and contact details of the seller.
• Tax or company registration details of seller (if relevant).
• Name and contact details of the buyer.
• The word "invoice”• A unique reference number
(in case of correspondence about the invoice)
• Date of the invoice.Name and contact details of the seller.
• Tax or company registration details of seller (if relevant).
• Name and contact details of the buyer.
•Purchase order number (or similar tracking numbers requested by the buyer to be mentioned on the invoice)•Description of the product•Unit price of the product (if relevant)•Total amount charged (optionally with breakdown of taxes, if relevant)•Payment terms•Date that the product was sent or delivered
•Purchase order number (or similar tracking numbers requested by the buyer to be mentioned on the invoice)•Description of the product•Unit price of the product (if relevant)•Total amount charged (optionally with breakdown of taxes, if relevant)•Payment terms•Date that the product was sent or delivered
VAT on Invoices?VAT on Invoices?
• The European Union require a VAT (value added tax) Number on invoices between entities registered for VAT.
• If seller and buyer belong to two different EU countries, both VAT identification numbers must be on the invoice in order to claim VAT exemption.
• In the UK, if the issuing entity is not registered for VAT, the invoice must state that it is "not a VAT invoice".
• The European Union require a VAT (value added tax) Number on invoices between entities registered for VAT.
• If seller and buyer belong to two different EU countries, both VAT identification numbers must be on the invoice in order to claim VAT exemption.
• In the UK, if the issuing entity is not registered for VAT, the invoice must state that it is "not a VAT invoice".
Payment of InvoicesPayment of Invoices
• Organization’s purchasing goods and services generally have a process in place for approving payment on the invoice. This is based on an employee's confirmation that the goods or services have been received.
• Organization’s purchasing goods and services generally have a process in place for approving payment on the invoice. This is based on an employee's confirmation that the goods or services have been received.
Different types of InvoiceDifferent types of Invoice
• Statement - A periodic customer statement includes – 1. Opening balance– 2. Invoices– 3. Payment– 4. Credit memos– 5. Debit memos– 6. Ending balance, for the customer's account during a specified period.
• Statement - A periodic customer statement includes – 1. Opening balance– 2. Invoices– 3. Payment– 4. Credit memos– 5. Debit memos– 6. Ending balance, for the customer's account during a specified period.•A monthly statement can be used
as a review invoice to request a single payment for accrued monthly charges.
•A monthly statement can be used as a review invoice to request a single payment for accrued monthly charges.
Different types of InvoiceDifferent types of Invoice
•Timesheet - Invoices for hourly services. Lawyers and consultants often pull information from a timesheet.
•Timesheet - Invoices for hourly services. Lawyers and consultants often pull information from a timesheet.
Different types of InvoiceDifferent types of Invoice
• Pro forma invoice - In foreign trade, a pro forma invoice is a document that states a commitment from the seller to provide specified goods to the buyer at specific prices.
• It is often used to declare value for customs. It is not a true invoice, because the seller does not record a pro forma invoice as an accounts receivable.
• The buyer does not record a pro forma invoice as an accounts payable. The seller does not issue a pro forma invoice until the seller and buyer have agreed to the terms of the order.
• In few cases, pro forma invoice is issued for obtaining advance payments from buyer, either for start of production or for security of the goods produced.
• Pro forma invoice - In foreign trade, a pro forma invoice is a document that states a commitment from the seller to provide specified goods to the buyer at specific prices.
• It is often used to declare value for customs. It is not a true invoice, because the seller does not record a pro forma invoice as an accounts receivable.
• The buyer does not record a pro forma invoice as an accounts payable. The seller does not issue a pro forma invoice until the seller and buyer have agreed to the terms of the order.
• In few cases, pro forma invoice is issued for obtaining advance payments from buyer, either for start of production or for security of the goods produced.
