People want to pay you hourly/per project, convince them it’s better for both you and them to pay you daily. I’ll explain why in a future post. I've burned many thousands of words here arguing the same point and will hopefully be able to spare you all a retread, so let me just say that I think a lot of good habits and useful dynamics emerge organically from this one decision. If you make no other careful strategic de…
Here is my take.
From the consultant's perspective. Bill hourly means more time spent on bookkeeping and less time spent on actual development. Say, you spent 8 hours in a day, you need to put 5 minutes per hour for bookkeeping. In total, that's 40minutes of unproductive time. If you bill daily, you can spend maybe 20 minutes doing so. That's 20minutes more saved for coding. If bill hourly implies more multitasking switching among multiple projects, the context-switching time can easily to add 10minutes per hour wasted. That's why it's more cost-effective for the customer if they agree on bill daily.
However, the customer may have different opinion. If a project needs 12hours to implement, bill daily means they have to overpay extra 4hours (2days = 16hours, assume 8hours per day), which they don't like.
A geeky analogy. When you initialize a hard drive partition with file system, you need to slice it into a large number of blocks. Smaller block size such as 4KB is more space-efficient than bigger ones such as 64KB. However, it's less efficient in terms of throughput. Of course, it depends on the pattern of your file usage. If most of the files are small files, small block works perfect without performance penalty. If most are big multimedia files, then big block size is preferred. You can easily map this to the case of consulting gigs.
So, it's more like a psychological thing. Bill daily encourages bigger projects, better project planning, less turn-over, and may lead to better results, which consequently cultivates long-term relationship.