How Do You Charge For Consulting?

T&M , Expense's, + not to exceed clause

always leave room for wiggle, or options

Depends on who , relationship, demand for time , involvement of project

once had one where we made more on site visits than the  contract

Due to change , unclear direction , inability to make clear decisions by management with out having multiple meetings

days of emails and time on emails

I dont believe thier is a true way to quantify the exacts of consultants due to unknowns

like so many plans, documents , proposals , etc   You just get better with each one you do.

like so many programs and books , the variables change with each Project

unions have great standards and details of past projects  for schedules of values but my experience is that they over estimate  the value

other factors are , who s it for , what is involved , type of project, where is the location (s)

We do them all, it just depends on the project and the client. 

When there is an option, I prefer a flat fee based on an estimate of time. It is much easier to manage and invoice and there is no uncomfortable conversation about why this hour or that quarter hour was charged. There are risks; if you estimate short you lose, or, if it is a competitive bid, their could be some price pressure on your estimate. So, the risk is shifted from the client to you on a flat fee.

An hourly not to exceed is a win/win for the client. They get it cheaper if you over estimated but there is no risk to them if you under estimate.

In my experience, customers will decide based on the flat fee or the not to exceed price. They are not comfortable with the hourly only because the sky is the limit and basically the risk is all theirs. That said, if you have a long relationship with this customer, they may trust you with straight hourly and that is your best option (low risk). 

As for billing the local business unit in country, you're people are correct to be concerned. If you do not have a local business office there can be tax and licensing issues that will significantly delay payments. Requirements such as government certification letters can take months. Also, remember the affect of exchange rates. If you invoice and get paid in local currency it can affect your margins. 

You can consider partnering with a global company to help you facilitate the business relationship (like the one I work for). 

Encouraging the client to manage the costs to the business unit internally is ideal so you can keep billing the HQ.

I asked my wife about this, since this kind of thing is her forte and she deals with it daily.

Right now your customer is likely doing internal billing to their various other business units. For the US ones, this is usually pretty smooth, but the international ones are a pain. Despite them being all the same company, it is unlikely that the overseas BU's pay on time or predictably.

If you switch to billing the overseas BU's directly, you are going to be dealing with currency conversion issues. For my wife, she sets up bank accounts in local currencies for each overseas unit, but they do a fair amount of non-US business, so it is practical. In your case, you would probably have to receive foreign currency and take spot conversion rates, which puts you at a disadvantage. You'll also have to chase the accounts payable people at each of those remote locations, and then deal with the time zone barriers, language barriers, etc. in some cases.

Bottom line, push back on agreeing to go after each BU separately. If you ARE forced into this, then make it clear from the very beginning that the entire company is on the same payment terms, and that if ANY of the BU's have past-due accounts then NONE of them receive service until ALL are current.  That gives you at least a little bit of leverage.