Thursday, February 28, 2013

Make sure your paying a fair and reasonable price for professional services.

As an IT consultant I charge an hourly rate for my services which I feel is fair and reasonable.  I look for ways to save money for clients wherever I can, whilst still providing an appropriate and professional solution. The cheapest solution can sometimes come back to haunt you but not always, but paying the dearest is no guarantee of value either. What is fair and reasonable for one person is not fair and reasonable to another. Some people feel they should get everything for free whilst others are more than happy to pay a fair and reasonable amount. Both the customer and the supplier need to achieve a fair and reasonable outcome.

However what I don’t think is right is some of the practices I’ve seen over the years in consulting organisations.

For example I saw one accounting firm charge secretarial support staff out at ten times their salary. A common practice across many industries is to quote the services of a senior person and then to provide a lower cost staff member to complete the work. An IT company where management called a general meeting and then when staff asked where to allocate their time to, were told to allocate the time to their customers. I was told that one major accounting firm when staff couldn’t allocate the full number of hours, they would allocate the remaining hours across their clients. I saw one accounting firm charge $50,000 for three days of work, because instead of charging for the time involved, they charged a set fee. Some of these businesses are the top businesses in the industry so don’t just think it is the no name businesses that are involved in these practices.

Fixed fees are a bit of a catch twenty two. At least you know what you’re up for, but keep in mind the business isn’t going to risk losing money, so they’ll build in a large contingency. That can mean paying twice as much or more.

Ultimately you have to decide how much a task is worth to you. Make sure you understand what you will receive and how much it will cost.

A good approach is to test a business with a small task and then work out if you’re happy with their charges and the information they provide about what they’ve done. For example I record all times and clients are welcome to the timesheets which include start/stop times and descriptions for all activities. Many businesses will roll up the time into a single figure and you have no idea of how the figure was reached. Also don’t get too complacent. I’ve seen one business charge good prices for computers at the start and since the client didn’t question their prices after a couple of years, the supplier was then charging around 30% more than the general market.

A good consultant is there for you and whatever they do on your behalf should be fully transparent. You are paying good fees so you should expect they should work ethically and honourably, but unfortunately that is not always the case. Ultimately it is up to you to make sure you look after your interests and to surround yourself with people you can trust.

Kelvin Eldridge

Online Connections

Call 0415 910 703 for computer advice and support.


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