Invoice tips??

[overkill04]

Hi there,

I've recently branched off to do some 3D Cad work, mainly doing advanced models for companies and I have a few questions.

1) What strategies one can use if a model proves to be more advanced than first estimated.

2) Do contractors break down there invoice on things like features per part or merely time spent?

Basically I'm new to the contract work game and I want to be able to invoice confidently knowing that my butt is covered if the company I'm working for tries to slide in 10 more hours of work.

Cheers.

 

[PatBethea]

I've only ever managed contracts for 3-D modellers and drafters. On the few contracts that I managed, billing was always on a "per part" basis. Assemblies were always handled in-house. In most cases, the work involved taking 2-D drawings (old ACAD stuff) and converting it to 3-D (Solid Works or PRO/E). So, we may be talking apples and oranges here. Normally time saved on simple parts offset the time spent on more advanced parts. There were times when a part was quite advanced and justified a premium billing rate. When those cases arose, the contractor would present the part and I'd make a decision. Assuming that your contact knows what is involved (i.e. you are dealing with an engineer/designer), it shouldn't be hard to negotiate more money for something that falls outside of the normal scope (for lack of a better word).

Regardless, I don't think you could justify billing on a "per feature" basis. How would you determine the number of features? For instance, if a part had 6 holes in it, would you charge for 6 holes? It may be possible to produce all 6 holes in one step, or it may require multiple steps to produce them. Sometimes it would make sense to break it out into 2 or more steps, even though it could be done in one step. My point is that the "number of features" could be a very subjective thing, open to disagreement.

 

[GBor]

There is a business forum that may be helpful, but I can provide my experience, which is more in the engineering realm than the CAD modeling.

When you're new to the industry, it is probably helpful from a customer relations standpoint not to invoice more than you actually estimated, but you can show that you spent extra time and then credit them for the time above your original estimate. This is beneficial because it gives you a record of what it actually took you, it lets them know that you stand behind your estimates, and it lets them feel like they just got something for nothing. Then, you turn around and ask the government if this is a business loss (my accountant worries about that, so I have no idea).

For the second statement...different ballgame. You have to stand your ground and tell them that the changes will require an additional estimate. They've come to you because they can't do this in-house, so you are worth it. If you don't charge them for making changes, they may take advantage of you.

I live by: When it's my mistake, I fix it; when its their mistake, I will fix it for just compensation.

I wouldn't say this had made me successful, but I get along with my clients and they keep coming back. Ultimately, that's what you are looking for...

Garland

Garland E. Borowski, PE
Borowski Engineering & Analytical Services, Inc.
Lower Alabama SolidWorks Users Group

 

[scastillo]

Basically I'm new to the contract work game and I want to be able to invoice confidently knowing that my butt is covered if the company I'm working for tries to slide in 10 more hours of work.

A simple clause in the contract *up front* will save you a lot of headaches later on.

 

[GBor]

Another option to consider is requesting a "retainer" much like a lawyer. You use the retainer as "seed money". You agree to refund any unused amount, but this gives you the flexibility to say that they didn't ask for something that they are now requiring. It is much easier when they've already given you the money for them to say, "sure, go ahead".

 

[bvanhiel]

Whenever you perform work for a fixed price rather than on an hourly basis you run the risk (and reward) of under and over quoting. You should eat the occassional extra hours, but on average charge enough per part to make up for it. The only other choice is to charge for effort (hours) rather than results (modeled parts).

As for of estimating complexity, I would use the number of dimensions on the print. Assuming, of course, that the print is fully dimensioned.

-b

 

[ajack1]

I run a design house and I must say I am surprised anyone lets you charge by the hour, we have to quote a fixed price on just about everything, the only exception is one customer who I used to work for.

Quoting is about the hardest part of the job IMO, if you over quote you lose the job, if you under quote you do not make enough money. Often you have to quote from some pdf that is barely readable and they want it now.

In my experience you do get more of a feel for it after a while, but you still end up taking more hits than you ever walk away feeling we made a killing on that. That is before you get into “extras” and modifications.

You make or lose far more money quoting than you ever do for slick modelling or design, but I guess it is just part of the job. If you want a REAL shock wait until you see the payment terms of some companies.

 

[overkill04]

Hey thanks for all of the input.

One more thing. What kind of hourly rates are Mechanical Designers charging per hour for a typical CAD to 3D conversion?? Assuming that all the work is done off site???

I don't think I'll suggest doing assemblies in house I'll let them figure that out on their own.

But as it stands it seems to be working out billing by the hour and giving breakdowns on the time per part. A clause covering any over-runs would be nice as well.

I'll just have to try not to say that I can model everything in 15 minutes in case you get some surprises.

Cheers

 

[GBor]

Where are you? You use the term "Cheers", which may place you in the UK, perhaps? Or are you in the US, and, if so, which quadrant (NE, SE, NW, SW)? To which industry do you intend to cater? All of these have impact on what you can expect to received for your efforts.

 

[ajack1]

“What kind of hourly rates are Mechanical Designers charging per hour for a typical CAD to 3D conversion?”

That is a very big question, basically it is what the customer will pay. As GBor says that can be industry or location specific but in my experience depends more on what type of company you are dealing with. Smaller companies tend to stay local, so you are only trying to match or better what is local, larger ones will go further a field. I seriously doubt you will compete with the Middle East or Eastern Europe.

Another major factor is how busy companies are, many will drop prices to remain busy during a slack period. Do you want to work for say 60% of what you would like to charge to keep busy? If you take it you lose the chance to take on work at what you hope to charge, if you don’t you may be doing nothing for weeks on end wishing you had of taken it.

Converting 2D to 3D is not the best paying work as you are really adding nothing, as long as all parties can read drawings you will get the same result whoever does it. For this reason usually the cheapest is best for the customer and it makes little difference if they are 2 miles away or the other side of the world.

In my experience trying to build up an honest relationship with your customers is the best way forward, be prepared to talk and take a slice of their problems, under quoting for example, but hope that they are honest with you and appreciate that when the next project comes along.

Again in my experience it is a very tough market at the minute and you will not make huge money, but you can make a good living. Good luck, I hope some of this helps.

 

[arunmrao]

I am new to this kind of work and ofcourse the forum is a wrong one to disuss this issue, However,before it is flagged by the vigilante, I shall share my experience. Last week a person from US visited Bangalore and one of his assignments was to convert casting drawings into 3D .He had 600 of this to be done. I could get this done for about 10USD without bargaining as a sample.

He has gone back and promised to get more work. Can you get it cheaper?

 

[overkill04]

I didn't think this was the ideal forum but I didn't see any forums on Contract or Salary issues.

I'm in Vancouver at the moment, and things are booming here. I'm basically trying to decide if I'm ready to take the plunge into contract or take a full time offer.

Arunmrao do you mean 10 USD per part? I doubt you could get it for cheaper than that unless the parts are very simple castings.

 

[GregLocock]

One very obvious point is, do you just want /a/ solid model of the part, or do you want a /good/ solid model of the part?

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[dik]

You might try the AutoCAD forum...

Dik

 

[arunmrao]

overkill04
The parts are no where simple . They came in as complex as they could be. Also I helped add a few casting related details into the drawings.

Over here there is a whole eager army of people to grab such an opportunity. They constitute college lecturers who teach and the students as well. My son who is studying in 2nd year Mechanical engineering assisted in mobilising this team.

 

[Cockroach]

Yeah, the retainer idea is a good one. I typically ask for an invoice number, ensure it is signed and dated. This is essentially your contract should the client start to buck on a guy.

You should state the approximate number of hours, i.e. price the project for the client. This is based on experience, you may take a few lumps in the early days of your contracting position, but believe me, you'll make up for it in the long run.

Love to see the boys making a break for independence and show their business savy. Good for you!

Kenneth J Hueston, PEng
Principal
Sturni-Hueston Engineering Inc
Edmonton, Alberta Canada