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Should You Charge By the Hour Or By the Project?

A woman working on a project at her home

Businesses can charge clients either by the hours spent on a project or by the total project. A web-based time tracking system is invaluable for billing clients accurately by the hour. A reliable system to track clients and work-history is important when you’re charging by the project. A time tracking system like Timesheets.com keeps track of both clients and projects for freelancers, accountants, and other professionals.

Charging by the hour

It’s not always easy to guess how much time you and your team put into a project, especially if you work sporadically. Keeping track of the time spent on projects helps ensure that your billing is reasonable and accurate.

Charging by the project

You may be quite certain that your prices are fair and competitive, and are comfortable charging a set price for the project. If so, this makes billing easy for you! You can simply add projects against clients and then invoice!

Estimating a Project’s Value

Before quoting a client, you must determine a fair price, but depending on the type of work you do and your experience in the industry this may be a challenge. Whether you charge by the hour or by the task, there are tools and strategies you can use to help figure out what to charge your clients.

You can ask colleagues for advice about how they charge their clients. If you don’t know too many people personally, ask around on LinkedIn or try doing some salary research using industry websites. If you have some experience, base the charges on similar past projects you’ve done. You can always guesstimate the first time around both for an hourly rate or a project rate and see if it sounds fair to your client.

Be careful to get your billing right. Quoting a high price can cause your clients to look elsewhere for cheaper work, while undercharging can mean a heavy workload for very little pay. In most cases, once you’ve made the quote, you’re committed to doing the work for that price.

Billing Clients

Run reports

After you’ve tracked your hours, you’ll need to create the invoice. A system that automatically calculates totals for each project at the end of the billing period ensures that you are accurately reporting and invoicing the client.

With a system like Timesheets.com you can be certain that the reporting process is simple and accurate. You will be able to run reports by client, project, or employee and you can bill for all projects under a specific client or you can bill for just one project under a client. Either way, your report will display totals exactly as you and your clients need to see them. For further customization, you can download them into excel and edit the columns.

Importance of documentation

By showing clients that you have tracked hours meticulously and by providing your timesheets, clients will be more likely to pay you for your time and to believe in the accuracy of what you report. However, if you send an invoice with such a simple breakdown as project names and total hours, you will be much less likely to get what you are asking for or to be offered more work.

A printout of your real-time hours will earn you trust, get you paid, and help secure more work.


Need to track your projects for billing? Timesheets.com allows you to track project time accurately and efficiently with the reporting you need for your clients. Give it a try for FREE now!

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One Comment

  1. What Online Timesheets Are Good For, and What They’re Not – HR for Small Business
    What Online Timesheets Are Good For, and What They’re Not – HR for Small Business September 8, 2017

    […] You need to know how many hours employees work for payroll. Most of the time it’s best to bill based on hours worked too, instead of by project, and so you need the hours for billing as well. And if you’re not […]

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