How to Charge for Project Management
Project managers may work as self-employed consultants or for a consulting firm that places them with clients. Several ways exist to charge for project management including invoicing an hourly rate, flat rate per project, retainer or consulting fee, or in phases of project completion. Research comparable project management rates so you do not undercut your fees. Don’t accept and begin work on a project before getting the fees and details of the payment arrangement documented in an agreement signed by you and the client.
Charge an hourly rate for project management. Base this rate on the scope, time line and complexity of the project. Research competitive rates and use past experience to determine your hourly rate. This rate may be similar to what an in-house project manager is paid.
Bill a flat rate by project. This works well for simple projects with a specific start and end date. Your client will know upfront the costs and will not have unexpected fees or highly accumulating hourly rates.
Charge a consulting or retainer fee that equals double or triple the hourly wage you’d make if a company employed you full-time. This difference in rate makes up for any costs incurred as an independent consultant. Payment is equivalent to expertise so the more project management experience you have, the higher your consulting rate. Decide on a payment schedule such as weekly, bi-weekly or monthly.
Send fee invoices to the client upon hitting project milestones. This solutions-based arrangement of billing must be predetermined and agreed upon between you and the client. Document the agreed upon milestones and payment amounts in a contract signed by you and your client.
Set up a regular billing schedule so your client knows of payments due dates. Send a paper copy of the invoice as well as an electronic copy and work out a payment process prior to the first invoice. Document the billing process in an agreement approved by you and the client.