I am frequently asked how to bill for travel time. There are several factors to consider:
- How much travel will be involved in the project?
- How far will you need to travel?
- What is the total value of the client project?
- What’s customary in your industry?
- Will most of your projects require travel?
The Client Pays Travel Expenses
The client should pay your travel expenses such as transportation, lodging and meals. Make sure to discuss it in advance in case they have any guidelines for travel choices or spending. Be careful putting these expenses on your credit card. Make sure you are confident that the client can and will reimburse you for this spending.
Common Methods for Travel Billing
What is customary for travel billing in your industry sector? For example, billing full rate for travel time up to eight hours a day is fairly common in the defense industry, while a software start-up might cringe at the very thought. It’s good to do a little research or at least ask around before you make a formal request or declaration. Bigger corporations may have a documented policy.
Most consultants who travel more than I do bill for travel time. Some bill at their full hourly rate and some bill at half their hourly rate. There is usually a cap of 8-10 hours a day even if your travel takes longer. Most people try to do as much legitimate billable work as possible while traveling and bill that time at full rate.
Make sure you discuss and agree on billing for travel time with your client before you make any trips. I had one woman tell me that she asks, “What charge code should I use for travel time?” I think this is a very clever way to bring up the subject.
You Can Also Include it in Your Usual Rate or Fees
I have a couple of colleagues who travel for all their work so they include travel in their usual rate or fees. I have one friend who does high level strategy work. She builds travel time and expenses into her fees rather than billing separately for those line items. I have another friend who only bills for time spent with the client. Travel and prep work is not billable but her hourly rate is over $1000 an hour.
What About Local Drive Time?
I rarely see anyone bill for the time it takes to drive to local client meetings. Most of these trips are less than 30 minutes. I have seen people require a certain number of hours to come on site. I prefer to manage it rather than create a formal policy. I try to batch meetings so I don’t make the drive to a client for a one-hour meeting but sometimes it can’t be avoided so I try to schedule a nearby coffee meeting with a prospect or for networking.
How I Bill for Travel Time
Here is my story. I try to avoid travel. I have small children, so I generally don’t want to travel. If a project requires a lot of travel, I don’t take the project. Over the 15 years I’ve been consulting, people have become more and more comfortable with remote work so travel is easier to avoid. And there are so many tools and technologies that make remote collaboration easy.
Most of my business travel has been for clients spending $50,000 – $100,000 or more with me. In these cases, a day or two of travel once or twice during the project was not an issue worth discussing. I do not bill for small amounts of travel time with these larger clients. I do try to do as much billable work as possible while waiting in airports and in the air. If I am doing legitimate billable work, I bill for the time.
I did have one project where I billed for travel time. The project required me to travel five hours on the train a few times a month. I negotiated five hours of billable time per trip. Since I was able to take the train, I did as much billable work as possible. If there was truly nothing to be done, I still got paid for the time. And if I decided to drive and got stuck in traffic, that was my problem.
I live on the coast, so I will occasionally take clients that require meetings an hour or two north if I can take the train. It’s a beautiful ride along the beach and I find that I can be billable for almost the entire ride. I travel business class where they serve coffee and pastries in the morning and wine and cheese in the afternoon. It makes the day seem like a working vacation.
At the end of the day, it’s up to you to decide what works best for you and your clients for travel time. If your project will require significant travel, make sure to surface the topic early to avoid misunderstandings down the road.
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Originally published at www.billablewithbaby.com