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This makes no sense mathematically - changing the unit of measurement (and perhaps rounding) cannot make a real difference unless substantially all of your resu

This makes no sense mathematically - changing the unit of measurement (and perhaps rounding) cannot make a real difference unless substantially all of your results are between 0.5 and 1.5 unit. If you said “charge by project/milestone”, your reasoning makes sense. The people who charge a lot by hour (lawyers, tax specialists etc) will often charge in 15 minute increments. Even if you charge by day, tou’ll find you have to charge in 0.25 day increments or so.

joshuamorton 8y ago
Another way of putting this might be "charge by the sprint". You don't track your time specifically, you do report back on your progress each week/two, and the company makes renewal decisions off of that. The point is to not subdivide the week.
- seanwilson 8y ago
  Can you explain more how this works? So you get paid upfront for a e.g. two week sprint where you say what you think you'll get done in that sprint and the client picks if they want to renew for the next sprint based on a progress review at the end? How does this work out if you finish all the tasks in the sprint really quickly or barely finish any in terms of client happiness? What are the benefits over charging per day or week?
vannevar 8y ago
You're assuming that in order to bill one day, you have to work 8 hours, which is more or less how hourly billing works, particularly in the cases you cite where the actual billing unit is 15 minutes. But a day rate works differently; it basically says that for the duration of the contract, you will get paid each day you're on contract, regardless of the actual number of hours worked. You might work more than 8 hours a day, you might work less. Either way, you get paid for the day.
- seanwilson 8y ago
  > But a day rate works differently; it basically says that for the duration of the contract, you will get paid each day you're on contract, regardless of the actual number of hours worked. You might work more than 8 hours a day, you might work less. Either way, you get paid for the day. Can you explain the advantages daily billing has overly hourly billing when the client has a constant stream of work to keep you busy? Sounds like the main benefit is if a client interrupts your day with only a single hour of work to do, you can bill them more? Apart from that, doesn't it still have the downsides of having to keep timesheets, having to justify your hours and working faster means you earn less?
  - mac01021 8y ago
    If you get a stream of tiny tasks from your client, maybe hourly billing is the way to go. I'd they present you with a project that you agree to deliver in 6 weeks and then mostly leave you alone in the interim, it's probably a different story.
    - seanwilson 8y ago
      In the 6 weeks scenario, when would you consider fixed price over weekly? With fixed price, there's a large incentive to be efficient and you can juggle more than one project at a time if you want to.
  - vannevar 8y ago
    A day rate can certainly work against you, in the same way that salary can work against you, if there's more work to be done than can be fit into X number of days at 8 hrs/day. You may end up working 12 hour days for the duration. I think the convenience of a day rate is more about not having to track work at a tight level of granularity, and having a guaranteed minimum per day, than it is about pocketing efficiencies.
    - seanwilson 8y ago
      One of the core benefits I think of fixed price is you have a large incentive to be efficient, which you don't have so much with hourly, daily or weekly billing. Do you know any other payment structures that encourage efficiency in the same way? There's milestone based billing which is similar to fixed price but requires more planning.

joshuamorton 8y ago

Another way of putting this might be "charge by the sprint". You don't track your time specifically, you do report back on your progress each week/two, and the company makes renewal decisions off of that. The point is to not subdivide the week.

seanwilson 8y ago
Can you explain more how this works? So you get paid upfront for a e.g. two week sprint where you say what you think you'll get done in that sprint and the client picks if they want to renew for the next sprint based on a progress review at the end? How does this work out if you finish all the tasks in the sprint really quickly or barely finish any in terms of client happiness? What are the benefits over charging per day or week?

vannevar 8y ago

You're assuming that in order to bill one day, you have to work 8 hours, which is more or less how hourly billing works, particularly in the cases you cite where the actual billing unit is 15 minutes. But a day rate works differently; it basically says that for the duration of the contract, you will get paid each day you're on contract, regardless of the actual number of hours worked. You might work more than 8 hours a day, you might work less. Either way, you get paid for the day.

seanwilson 8y ago
> But a day rate works differently; it basically says that for the duration of the contract, you will get paid each day you're on contract, regardless of the actual number of hours worked. You might work more than 8 hours a day, you might work less. Either way, you get paid for the day. Can you explain the advantages daily billing has overly hourly billing when the client has a constant stream of work to keep you busy? Sounds like the main benefit is if a client interrupts your day with only a single hour of work to do, you can bill them more? Apart from that, doesn't it still have the downsides of having to keep timesheets, having to justify your hours and working faster means you earn less?
- mac01021 8y ago
  If you get a stream of tiny tasks from your client, maybe hourly billing is the way to go. I'd they present you with a project that you agree to deliver in 6 weeks and then mostly leave you alone in the interim, it's probably a different story.
  - seanwilson 8y ago
    In the 6 weeks scenario, when would you consider fixed price over weekly? With fixed price, there's a large incentive to be efficient and you can juggle more than one project at a time if you want to.
- vannevar 8y ago
  A day rate can certainly work against you, in the same way that salary can work against you, if there's more work to be done than can be fit into X number of days at 8 hrs/day. You may end up working 12 hour days for the duration. I think the convenience of a day rate is more about not having to track work at a tight level of granularity, and having a guaranteed minimum per day, than it is about pocketing efficiencies.
  - seanwilson 8y ago
    One of the core benefits I think of fixed price is you have a large incentive to be efficient, which you don't have so much with hourly, daily or weekly billing. Do you know any other payment structures that encourage efficiency in the same way? There's milestone based billing which is similar to fixed price but requires more planning.