Consulting For Dummies
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How you bill your clients for your consulting work depends on your consulting contract or, in the absence of a written contract, any other agreements you may have made regarding billing and payment. If your contract is set up to pay you as you achieve specific milestones — say, completing one-quarter of the project or submitting a draft report of recommendations — then you invoice your clients upon completion of each milestone. However, if you work continually and bill your clients for the number of hours that you work plus expenses (photocopying, travel), then you collect the charges and bill them to your client at the end of the agreed-upon billing period, usually the end of each calendar month.

Here are some tips on maximizing the effectiveness of your billing process:

  • Front-load your billing. If you invoice after reaching milestones, try to load your fees into the front of the project rather than at the end. For example, push for an advance payment to start the project, or simply make your first couple of payments higher than those that are due later in the project. Doing so gives your project a financial head start while minimizing the risk if a client moves into a late-pay status during the course of a project.
  • Bill your clients often. The more often you get paid, the better your cash flows. Although monthly payments are pretty much the standard for consultants who bill hours and expenses, you can agree with your client to bill them more often than that.
  • Invoice immediately. Immediately after you complete a milestone or reach the end of your billing cycle, send an invoice to your client. The sooner you send an invoice, the sooner your clients pay their bills. And the sooner they pay their bills, the better off your practice is financially.
  • Use e-mail whenever possible. Once upon a time, invoices were snail-mailed to clients, taking up to a week to arrive. However, many clients today welcome invoices sent via e-mail, cutting delivery time for an invoice from days to seconds. (It also saves you ink and paper.) Make e-mail invoicing a regular part of your business and encourage your clients to do the same.
  • Offer a discount for prompt payment. To help motivate your clients to pay early (or at least on time), offer a small discount — in the range of 0.5 to 1 percent — for paying invoices within 10 or 20 days. You'll lose a bit of money when you offer your clients this privilege, but the positive impact on your cash flow usually makes the cost worthwhile.
  • Monitor client payments closely. Keep an eye on the status of your invoices and make sure your clients pay their bills on time. If certain clients don't, call them personally to see what the problem is. If it looks like you're going to have a hard time getting them to pay the amounts they owe you, act quickly to initiate your collection procedures.

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Bob Nelson (San Diego, CA) is founder and president of Nelson Motivation, Inc., a management training and consulting firm based in San Diego, California. As a practicing manager and a best-selling author, he is an internationally recognized expert in the areas of employee recognition, rewards, motivation, morale, retention, productivity, and management. He is author of the bestselling book 1001 Ways to Reward Employees (Workman) — which has sold over 1.5 million copies worldwide — and coauthor of the best-selling book Managing For Dummies, 2nd Edition, with Peter Economy (Wiley), as well as 18 other books on management and motivation.
Bob has been featured extensively in the media, including television appearances on CNN, CNBC, PBS, and MSNBC; radio appearances on NPR, USA Radio Network and the Business News Network; and print appearances in the New York Times, the Wall Street Journal, the Washington Post, and many more. He writes a weekly column for American City Business Journals and a monthly column for Corporate Meetings & Incentives, among others.
Dr. Nelson received his PhD in management from The Peter F. Drucker Graduate Management Center of Claremont Graduate University in suburban Los Angeles, and received his MBA in organizational behavior from The University of California at Berkeley. For more information on products and services offered by Nelson Motivation, Inc. — including speaking or consulting services — call 800-575-5521. Visit Bob at his Web site:

Peter Economy (La Jolla, CA) is a freelance business writer and publishing consultant who is associate editor of the Apex award-winning magazine Leader to Leader, and coauthor of the best-selling book Managing For Dummies, 2nd Edition, with Bob Nelson (Wiley), Giving Back with Bert Berkley (Wiley), The SAIC Solution with J. Robert Beyster (Wiley), as well as the author or coauthor of more than 30 other books on a wide variety of business and other topics. Visit Peter at his Web site: and be sure to check out his Free Book Project at:

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