Comment by gk1
7 years ago
> What if the project was billed at a fixed cost, he negotiated $21k, but the project took a year to complete because the company moved so slowly?
Simple: Charge $21k per month. If the company drags it for a year then you make $252k.
Okay. Why not charge $X per 2 weeks? Or X per week? Or X per day? Or X per quarter?
The granularity here is entirely arbitrary. Hourly billing is by far the industry standard. That's why we default to it. It's easy to justify in court, it's easy to reason about contracts which use it.
But the granularity isn't arbitrary!
If you're billing hourly, and the client chooses not to use your time, you don't work any hours and you don't get paid. If you then billed them for 100 hours without working, you've committed fraud.
If you're billing monthly, you've set aside the month for the client. If they choose not to use your time, you still get paid, because in your agreement you specified "use my time it or lose it".