A consultant should match the billing model to the scope: hourly for open work, a fixed fee for defined deliverables, a retainer for ongoing advice. Most engagements use the invoice, proforma invoice, estimate and expense report.
Documents consultants use
- Estimate. Send it before the contract when the scope is still open. It gives a price range and shows how you think about the work.
- Proforma invoice. Send it when a client's finance team needs paper before it releases a deposit or approves a budget. Label it clearly so nobody pays it as a final bill.
- Invoice. Send it at each milestone or month end. One line per deliverable or per block of hours keeps it readable.
- Expense report. Attach it when you pass travel, software or printing costs to the client. Include dates, categories and amounts.
How billing usually works
- Hourly. Simple to start. The client carries the scope risk, and you carry the risk of a low rate. Track hours in a timesheet.
- Project fee. You price the outcome. You carry the scope risk, so write what is in and out of scope.
- Retainer. The client pays a fixed amount for an agreed block of time or availability. State what happens to unused hours.
- Milestones. Split a project fee into stages tied to deliverables. This protects your cash flow.
Mixed models are common. A client may pay a monthly retainer plus a project fee. Use separate invoice lines, and say which model each line follows.
Common invoicing mistakes
- Invoicing only at project end and waiting months for cash.
- Hiding expenses inside the fee, which makes the client question the total.
- Sending a proforma without a clear label or a validity date.
- No purchase order number when the client's accounts payable requires one.
- Unclear payment terms. See setting payment terms.
- Pricing from guesswork instead of costs. Read pricing your services.
Useful calculators and guides
- Hourly invoice calculator to total time and rate.
- Retainer calculator to set a monthly fee.
- Freelance rate calculator to find a rate that covers your costs.
- Project invoice calculator to split a fee into milestones.
Guides: retainer agreements, pro forma invoice and how to invoice a client.
Frequently asked questions
- Should a consultant bill hourly or by project?
- Hourly suits open-ended work with unclear scope. A project fee suits defined deliverables and rewards your speed. Many consultants use a retainer for ongoing advice. Choose the model that matches how well the scope is known.
- How do I bill expenses to a client?
- List expenses as separate lines on the invoice, or send an expense report with the invoice. Agree in the contract which costs you can pass on and whether you add a markup.
- When do I send a proforma invoice?
- Send it before work starts when a client needs a document to release payment or approve a budget. It is not a request for payment. Send the final invoice when you deliver.
- What payment terms should I use?
- Net 15 or net 30 are common. Larger clients may require longer terms. For new clients, consider a deposit or milestone payments. State the due date on every invoice.
- Can I bill for travel time?
- Yes, if the contract says so. Many consultants bill travel at a reduced rate or as a fixed charge. Write the rule in your proposal so the invoice holds no surprises.