Startups Stack Exchange Archive

Passing on overhead without increasing rates

• posted by: Silver on 2016-04-28
• tagged: business-model, quotations
• score: 2

Our company does mostly project work for clients on a T&M basis. As we grew we brought in an account manager to help with all the client management. Most of our quotes we do for clients include IT stuff, Project Management, Development, Business Analysis, Testing etc. Not all work has all items (i.e. we might just do Testing as part of a estimate) Is there a simple way we present a cost to cover a portion of the account management into a quote without

• Increasing everyones rate
• Adding some fake hours to the invoice
• Just directly charging for what should be free service

Note : this is only for our T&M work, which is the majority of it. Fixed price work is easily covered!

Answer 9072

• posted by: PV22 on 2016-04-30
• score: 1

You build the increase into the general costs associate with business. If you only bill for services, then account for the income needed to cover the costs, and what increase to your service rates would provide you with that income (given a dependable market elasticity)

---

All content is licensed under CC BY-SA 3.0.