What Your Billing Says About the Relationship

Imagine a coach named Tobias whose client, Ms. Varga, runs the company her father started. She pays $600 a session and sees him twice a month. One Tuesday she sends him a draft of a note to her board and asks whether it sounds right. He reads it on his phone between two sessions and replies in 10 minutes.

His invoice at the end of the month lists the two sessions and a third charge, “Email review, 15 minutes, $150.”

Ms. Varga pays it. The next time she has a draft, she does not send it to Tobias. She shows it to her lawyer instead. After six months, she tells Tobias that she has what she needs, and she stops booking.

In the spring she hires a second coach, Noor, who charges $7,200 for six months. Noor’s proposal says that the fee “covers two sessions a month and anything you send me in between.” Ms. Varga sends Noor a draft in the second week. Noor reads it that day, and no charge for it appears. Ms. Varga keeps sending them, and in the autumn she renews.

Tobias’s $150 is fair, and it is small. What it tells Ms. Varga is that his help stops when the session ends, and that anything past that has a price. She does not argue about the $150. She asks for less, so the coaching shrinks to two hours a month. Noor’s fee tells her the opposite, that the coach is what she is paying for.

So put the small requests inside your fee, and never bill one of them later.

A client judges your bill by the rules of the relationship they think they are in

In 2004, Pankaj Aggarwal reported three experiments in the Journal of Consumer Research on how people judge a brand. People, he found, judge a brand by the rules of a personal relationship, as if the brand were a person they knew.

He describes two kinds of relationship. In the first kind, each side gives in order to get something back, the way a shopper and a store do. In the second kind, one side gives because the other needs it.

The two kinds have different rules. People notice when a brand breaks the rules of the kind they thought they were in. In his experiments, a brand that broke them was judged worse, and not only for that one action. The judgment reached the brand as a whole. He tested this on brands, and this lesson carries the idea over to a professional and a client.

Here is what that means for a bill. A charge for every call and every email follows the rules of the first kind. Each request has a price. A fee that already covers the calls and the emails follows the second kind. A request is answered because the client needs an answer.

A bill breaks the rules only when it does not match what the client was told. A client who was told that every hour goes on the bill expects to see the hours. Now suppose a client was told that the fee covers everything in between, and then finds a charge for an email. That client has been moved from one kind of relationship to the other without being asked. The judgment lands on the whole relationship, not on the one charge.

You may already sell one whole result instead of your hours. The question left is what to do about the small requests that come up along the way. Ms. Varga was not told that an email was extra, so the $150 changed what she thought she had bought.

A marketplace says some clients will not send an email while the meter runs

TALD is a marketplace that matches homeowners with interior designers. In its guide to how designers charge, written for homeowners, it describes what hourly billing does to some of them. “We’ve seen clients who couldn’t do hourly,” it writes, “because they’d hesitate to write an email or ask a question, knowing the meter was running.”

With a flat fee, the guide says, “All correspondence, meetings, mood boards, and revisions are covered under one number.” Then it adds, “There’s no meter running when you pick up the phone.”

The same guide says that hourly billing makes the designer more money. With a flat fee, the designer carries the risk of extra time. So a fee that covers the small requests gives something up, and the fee has to be priced with that in mind.

The client who hesitates to write is the client Tobias loses. A fee that covers the email is what lets a client like that write.

Two designers bill by the hour every month, and their clients take it two ways

In 2023, Business of Home asked nine interior designers how they bill. Bethany Adams, a designer in Louisville, Kentucky, had charged by the hour and billed monthly since she started her business in 2015. On a consultant’s advice, she planned to switch in 2024 to a lump-sum fee, billed in two halves. Monthly billing, she said, “is a drag for me and the clients,” and “we all end up feeling nickel-and-dimed.”

Helen Bergin, a designer in Palm Beach, Florida, bills the same way, monthly, with hourly invoices and extras such as freight. Her clients, she said, “appreciate being in the loop as their projects progress,” and they like “not having any surprises.”

The same bill, sent every month, told Adams and her clients one story and Bergin’s clients another. Bergin’s clients expect every hour on the bill and like seeing it, so the bill breaks nothing. Adams and her clients felt every charge.

An hourly bill that the client expected keeps the rules. It still puts every call in front of the client. So a client with a small question weighs it before asking, as the marketplace guide found. This lesson’s advice stays with the fee that covers the small requests. If you keep an hourly bill, tell the client at the start that every call and every email will appear on it. Then the bill tells the same story from the first month to the last.

A coach to designers says the fee that covers the extras is usually priced too low

Gail Doby is a co-founder of Pearl Collective, a firm in Denver that coaches interior designers on their businesses. In 2022, her firm and a recruitment firm surveyed more than 900 owners of design firms. Business of Home reported the results. Of the designers, 80% still charged by the hour, or by the hour plus a markup. Four in 10 used a fixed fee, on its own or alongside an hourly rate.

The designers on a fixed fee, Doby said, were setting it too low. “My clients are undercharging their fixed fees, typically by about 50 percent,” she said. They believe they are “cementing a relationship with clients,” but “it ends up biting them because they are so likely to continue doing all the extra things that the client asked for, without asking for more compensation.”

Doby’s designers chose the right kind of fee at the wrong price. The extras the client asked for are the small requests, and the fee was meant to cover them. When the fee was not priced for them, the designers did them unpaid. So a fee that covers the small requests is priced with the small requests in it.

A designer Claire Jefford coached lost over $120,000 on eight flat fees

Claire Jefford is an interior designer who coaches other designers. On a call with the membership site Circaphiles, she described a designer she once coached who priced eight projects with flat fees. “Across those eight projects,” the article says, “she lost over $120,000.” The reason, in Jefford’s words, was that “everything takes longer than you think.”

Jefford’s answer is to split the job in two. The design work gets a flat fee, “because the scope is knowable.” The implementation, with its site visits and its reorders, is billed another way. It gets an hourly rate or a fee on what the designer buys, “because that’s where the real unknowns live.”

So the fee covers what you can count ahead of time, and the small requests are something you can count. A part of the work you cannot count, such as a second room, is billed another way. The client hears that at the start.

Why billing one small request in the fourth month goes wrong

Imagine a piano teacher named Mr. Lindqvist whose student, Ravi, is 14. The fee for the term covers the weekly lesson “and any help he needs between lessons,” as Mr. Lindqvist wrote to Ravi’s mother, Mrs. Osei, in September. In November, with an audition coming, Ravi sends him a recording on a Sunday. He asks whether the second movement is too fast. Listening and replying takes 20 minutes. The month has been full, so Mr. Lindqvist adds “Recording review, $40” to the invoice.

Mrs. Osei pays it and says nothing. Ravi does not send the next recording. In January, Mrs. Osei moves him to a teacher that a friend at school recommended.

The $40 is the exact charge Mrs. Osei was told she would not see. It tells her that the promise from September did not hold, and she does not know which other promises will. Mr. Lindqvist could have listened to the recording as part of the fee, because that is what the fee was for. Suppose the recordings had grown to an hour a week. Before the next one, he could have told Mrs. Osei that help of that size is a separate lesson. He could have given her its price. The one move that cost him the family was putting the charge on the bill first.

Covering the small requests is not working for free

A fee that covers calls, emails, and 10 extra minutes can feel like an invitation to be used. The hourly bill at least pays for every minute.

Noor’s fee has the emails in it. She counted them when she set the $7,200, so a draft on a Tuesday is work she has already been paid for. Doby’s designers went unpaid for the extras because they priced the fee as if the extras would not come. The fee that covers the small requests costs you only when you price it as if they were free.

The large requests are not inside it. A client who asks for a week of sessions abroad, or a second room, hears a price before the work starts. That is how Jefford bills the implementation. What the fee gives away is the counting, not the work.

How to bill so the client keeps asking

1. Write down the small requests your clients make in a month. They include the call before a meeting, the email with a question, and the 10 minutes past the hour. Go through one month of invoices and messages and list every one, so that you know what the fee has to cover.
2. Put those requests inside your fee, and price them in. Add up what they cost you in a month, and build that into the fee before you quote it. A fee priced without them is the fee Doby’s designers set.
3. In the proposal, say in one sentence what the fee covers, so the client reads it before the first bill. For example, a caterer can write, “The fee for the season covers the four dinners, the menus, the tastings, and any call or change you want along the way.”
4. In the same proposal, name the requests that are not inside the fee and how you bill them. Keep that to the parts you cannot count ahead, as Jefford does with the implementation. For example, a florist can write, “The weekly flowers and any change to them are in the monthly fee. Flowers for a party are a separate order, priced before I buy a stem.”
5. When a request comes in that is outside the fee, say so before you do it, and give the price. For example, a personal trainer can say, “The plan for your week in Lisbon is a separate piece of work. It’s $300, and I can have it to you by Thursday.”
6. Keep to what the fee covers for as long as you work with the client. If the small requests grow past what the fee covers, do not add a charge for one of them. Raise the fee at the next renewal, and tell the client the new fee and what it now covers.

Next: You will start a new module. It begins with what real confidence looks like to a wealthy client, and why eagerness looks like need.