Billable Hours

Professional billings vary greatly as to what is considered an hour’s work. A large plumbing company will charge an extra hour if their time on the job goes one minute over one hour. A smaller, less aggressive company will charge a quarter hour if the time exceeds one hour by one minute. A small business proprietor might ignore charging for the extra time all together.

The ethicacy of these practices depends on how a businessperson presents himself to the customer before starting the work. If the businessman comes across as a mellow, friendly person you can trust, the ethicacy of their actions is questionable if they later beguine to aggressively bill the customer (see implicit agreements). A plumber might tell a homeowner that they are an experienced professional. But, in practice the plumber continually find himself short of parts needing to go to the store. The fact of having to go to the store all the time increases time on the job and the billable hours. A competent plumber would have all the necessary parts on his truck. Since the plumber in this example does not have a sufficient stock of parts his billable hours are not a true representation of time on the job.

The much larger abuse of billable hours is, for example, time charged for talking on the telephone. An architect might bill a client 15 minutes for each call, however short. At the same time the architect might chat ten minutes at a time with a friend in his office while working on the same job and bill the client. In eight hours of billable hours the architect might be interrupted ten times by clients and potential clients. The total time distracted from his work might be fifteen minutes or an hour. At $300 per hour, an hour's chat time seems significant. This is an ethical problem in large and small businesses of all descriptions. A fully ethical business would explain what an hour is, while at the same time expecting that the client realizes all business people have interruptions. In every business there is at least a small amount of billable hours that are inflated by interruptions. The fact not all interruptions are not removed from the client's bill is called an "offset." 1.0 billing offset means "no offset" and no time is billed for work that was not actually performed. A .95 billing offset means that there is an inflation of the bill because of normal and accepted circumstances of 5%.

Notes: When a business owner is burned out on a project they sometimes arbitrarily bill their client simply to move things along. They are so exhausted they have little time to care. Nevertheless when they have rested up and move on to another project they return to their ethical ways.

There are businesses in the beauty sector that consider an hours time to be fifty minutes. An electrologist for example must face the physical stress that comes from bending over and the fatigues of intensely focusing on their work. They need a break before the next client comes in.

Phantom Billing: Billing client's for work done by an employee who does not exist.

Padding: Adding extra minutes of hours to a bill. This is to justify the maxim "let the buyer beware."

Switching: Billing for factory parts when in fact "after market parts" are being used. Also billing used parts as new. Another variant, although rare, is to give the client some other persons bill. The business here can plausibly deny the deception.

Mismanagement

Offset

Implicit Agreements

Customary Ethics