Am I charging my clients too much?

Question

I recently did web development work for client in UK (I am from India).

Before giving the quotation, I did detailed research about the charges for web development in the UK and for a medium-sized website; the charge was between £1000-2000 on average.

My client wanted a much more affordable quotation since they are outsourcing me and UK designers have to pay a lot of taxes and I do not.

Finally I made a decent website which took around 50 hours of work and I gave the final bill of £400. Its over a month and my client is still processing the bill; they are giving reasons which are not convincing. Lately, I'm doubting whether I had overcharged them.

Even though this is massively under the usual charge for the client, is this still reasonable behaviour?

Answer 1

As I can see, you charged them 8 pounds per hour, which is $13 per hour. This is a very good price and you definitely did not overcharge them.

Your other mistake is that you investigated the price of work in the UK. You cannot do that. If they wanted a UK developer, they would have taken one. You have to charge them your hourly price, which is enough to live comfortably (in India). I used to work for UK companies who rented their developers for 300 pounds per hour, while they paid me less than 10% of that money. I was sore, but I could not complain since these are not the "rules of the game". So accept it like me or you will have a lot of problems finding clients.

If they still have not paid you, this is suspicious. I sincerely hope that you did not transfer your work to their servers; always keep work on your servers until your are fully paid.

5 to 7 days is reasonable. 1 month is very suspicious. This is not reasonable.

How are they paying you? An online service like PayPal, etc.?

Answer 2

The rate seems pretty fair to me but should not matter assuming you have an agreement from the client to pay an amount for a product or service that you have delivered.

One tactic you might like to try is to threaten to place the debt with a debt collection agency in the UK if it is not paid within a certain amount of time. A UK debt collection agency will be able to submit the debt to a credit reference agency if it is not paid and this will affect your client's credit rating.

It's unlikely a client would risk their credit rating over a £400 invoice.

Answer 3

The amount you charge is somewhat irrelevant. It does not even come remotely close to anything I'd ever consider as "over" charging. If I wanted to work for $13/hr I'd have full time job, which would still pay better than that. All clients want better/cheaper pricing. All of them. It's not up to the client to dictate your pricing, it's up to you. But that's another matter.

If you have a preferred payment period, that should be noted on all invoices "Due upon receipt" or "Net 15 days" or whatever.

You shouldn't overreact or worry if a client take 2, 3, or even 4 weeks to pay. Many simply have to processes the payment through various business sections. Remember if they mail a check, it could take 10 days to get to you easy, if not more.

I use Net 15 days on my invoices but I won't say anything until day 31. Then I'll resend the invoice. If I don't see payment within 10 days of the second invoice, I start late fees and send a third overdue notice to the client.

Answer 4

Why can't you charge future clients in upfront installments?

1. You take a certain percentage upfront
2. You can milestone if you like or skip to 3 if smaller projects
3. You load an installation of the project on your own servers for testing and show the client
4. Client pays remainder
5. You deliver the code and/or install it on their servers according to your contract

That way, they can't get the goods and skip out on the bill. If they skip the bill, they don't get anything out of it as you shouldn't have even started without getting something upfront.

Answer 5

I also don't think you're undercharging. I contract in the UK and charge inbetween £250 & £300 a day. My freelance contracts aren't as lucrative as that but a 'brochure' site (10-20 pages, no backend/database) would be charged at around £800-900.

I have an advantage in as much as I also host the sites that I develop so, if a customer doesn't pay, then I can suspend their site until they do. I've written that clause into my terms and conditions (which appear on every invoice I issue).

I also don't think that 40 day payment terms are out of the ordinary. However, it's worth getting these things straight before starting the contract.