Rates

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Martin_US
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Rates

Post by Martin_US » Sat Jul 06, 2013 9:31 am

Since for some unknown reason, people appear to be notoriously stupid, I want to run an idea by you guys that bothered me for quite some time now.

There is the General Services Administration Schedule (GSA) expense rates per location national and international.
This is basically a daily allowance (Miles, Per Diem, Hotel) the IRS accepts without individual receipts.

http://www.gsa.gov/portal/content/10487 ... =shortcuts

Since I am basically sick and tired discussing rates (especially with agencies that don't really know the exact job site or talk about travels) I want to use this plus my hourly rate and end the discussion. They can look it up, it is official, it is transparent, it is tax deductable, it saves the trouble of gluing little receipts and makes everything quick and easy. The only thing missing are flights and car rental, but those are minor issues to figure into it.

Your thoughts?

Rich
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Re: Rates

Post by Rich » Mon Jul 08, 2013 2:31 am

I don't know about the US but in England there is the same type of thing available from the Inland Revenue - I'm not sure of the actual figures but it's something like 5.00 incidentals per day, 21.00 for an evening meal, 70.00 for an overnight stay.

I actually go a different route.

If you are working away from home and are travelling each week too and from work, for the first 2 years in a new employment you can claim back all (not just the tax element) but all of your expenses.

So for example, last year I was travelling backwards and forwards to Geneva. So I claimed in full my flights, hotels, taxis or car parking. I'll repeat that this is just for the first two years of any new employment and the claim is the full amount, you could if you wish to be dodgy I suppose claim this as well even if your client pays expenses. You can also claim this if there is the same scheme in your tax jurisdiction.

So. I pay tax in Switzerland. They have the same type of scheme for the first two years. I also pay tax in the UK.

Ummm..... :wink:
Regards

Rich

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Martin_US
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Re: Rates

Post by Martin_US » Mon Jul 08, 2013 6:35 am

Hello Rich,

I guess that's more or less the same all over when it comes to taxes.

My point was more on the rate itself. The neat thing for the US is that you have expense figures for any location.
If you want to give a rate quote to an agency and they don't immediately give out the exact location, you can be way off. i.e. here you may incur toll for bridges and stuff and it makes a difference if you work in the east bay or on the peninsula. Some of your british agencies think California is the size of the Isle of Man.

So, instead of looking up hotels etc, to find out what my base expenses are, I can 'just' point to the government site and be done with it.

Martin
Last edited by Martin_US on Mon Jul 08, 2013 8:52 am, edited 1 time in total.

VLozano
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Re: Rates

Post by VLozano » Mon Jul 08, 2013 7:35 am

But California is only a bunch of beaches and bitches... isn't?

You are not a beach nor a bitch... why do you need to work there?
Tuly Idiots
Because we know we are part of the problem

Martin_US
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Re: Rates

Post by Martin_US » Mon Jul 08, 2013 8:13 am

Because my cats hate to travel.

I took them with me when I had a gig in Europe, but you need all that paperwork and vacination and stuff.
Way stressful for the guys. When I was still married, I worked all over the globe, but 'old farts' get tired of the 'on site' scheme for no apparent reason. I was once working for about 7 years for a company and did everything from home.
World wide support for 1400 users and SAP implementation. Even with HP I rarely saw the office, eventhough it was just 20 min away.

This being 'on site' and warming up the office with your body heat is bogus. Most of the time you communicate via mail or phone and don't see the client. You can do the same from home.

Once I had a project for Hongkong and Taiwan, driven out of Melburne. They insisted I be in Foster City (Bay Area HQ). That's completely stupid given the time difference. From home, I could have worked late hours and be much quicker with mail or calls. Being in the office, I had to get out when they started to work. Thus a lot of delays for no apparent reason, but the managers ego.

In old times, we charged 75% of the rate in travel time. Unfortunately you can't do this today. Plus sitting in a Hotel is a waste of time. You have to move everything to the weekend.

Rich
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Re: Rates

Post by Rich » Mon Jul 08, 2013 8:21 am

Martin_US wrote:Because my cats hate to travel.

I took them with me when I had a gig in Europe, but you need all that paperwork and vacination and stuff.
Way stressful for the guys. When I was still married, I worked all over the globe, but 'old farts' get tired of the 'on site' scheme for no apparent reason. I was once working for about 7 years for a company and did everything from home.
World wide support for 1400 users and SAP implementation. Even with HP I rarely saw the office, eventhough it was just 20 min away.

This being 'on site' and warming up the office with your body heat is bogus. Most of the time you communicate via mail or phone and don't see the client. You can do the same from home.

Once I had a project for Hongkong and Taiwan, driven out of Melburne. They insisted I be in Foster City (Bay Area HQ). That's completely stupid given the time difference. From home, I could have worked late hours and be much quicker with mail or calls. Being in the office, I had to get out when they started to work. Thus a lot of delays for no apparent reason, but the managers ego.

In old times, we charged 75% of the rate in travel time. Unfortunately you can't do this today. Plus sitting in a Hotel is a waste of time. You have to move everything to the weekend.
Here here!!!

I totally agree.
Regards

Rich

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Martin_US
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Re: Rates

Post by Martin_US » Mon Jul 08, 2013 9:01 am

We should start billing for travel time again. You can call it combat pay as well.

Getting to the airport, all the pain with security, the flight, ugly food, screaming kids, traffic jams.

Then you hang in a conference room making conference calls with people all over the world and you are the only idiot that's there every week. Most likely sitting in a crappy space in worn out chairs working with a company laptop with no access to your old records.

Or maybe we just have a new line item: 'on-site fee' as a percentage on top of the rate :)

Craig
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Re: Rates

Post by Craig » Thu Jul 11, 2013 8:08 am

I use to offer a discount off my regular fee if I was remote from home.

But I think you might have a good idea. You start with offering your "standard rate" and offer on-site service at say a 20% premium plus expenses. If they want the infamous "all-inclusive rate" you make it a 50% premium, or whatever you think is appropriate for the travel involved.

So rather than a "discount" which implies cheap.. and "your doing me a favor by letting me stay at home", you reposition your service. The standard becomes at home. On-site is extra. It's a luxury benefit that if the client wants that, they have to pay for it.

Might be a tough sell to some, but if most consultants started doing that, it might change.

Sometimes it's not just the product, but the packaging.

Craig

Martin_US
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Re: Rates

Post by Martin_US » Thu Jul 11, 2013 8:27 am

So true Craig,

I only want to get out of this 'best rate' catch 22 one way or the other.
But seriously, some agencies and companies still don't get it and consultants are being cheated left, right and center.

I once had a gig in the mid-west. The client figured out after 6 month that their implementation plan was crap and laid off about 50% of the consultants, based on the stream they are working on.

I had bought a few flights way in advance to get a better rate and got stuck with them. Obviously the project manager got an ear full and I learned a lesson.

However you want to sell it, if the base rate is from home, plus phone charges or as I propose base rate, plus on-site 'fee'.

I only want to get out of this 'rate' BS all the time. So, to proove my point, I like to use what is transparent and official. Meaning, I am not making up stuff out of the blue and my base rate is what I consider fair compensation based on my skills.

Martin

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Re: Rates

Post by bgamble » Thu Jul 11, 2013 10:24 am

I contracted in the US for about 110 years and I never once took a project where ALL of my expenses were not covered by the client. Is this not the case anymore?

US has kind of gone to shit since I left.
In my opinion, Pepper Spray is underutilized as an effective tool for scope control

Craig
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Re: Rates

Post by Craig » Thu Jul 11, 2013 1:06 pm

In the last few years the move in the US had been towards an all inclusive rate. I do think that has tapered off a bit though.

I think a lot of it was triggered by the rise in gasoline (petrol) prices. Some clients found that the expense budget went up a lot when airlines drastically raised fares and added new fees. Rental car fees went up along with gas.

Normally things were stable enough that not a lot of change was seen between the beginning and ending of a project. That kind of changed and some projects saw pretty significant increases in their expense and travel budgets over what was originally budgeted for.

So I think clients figured an all-inclusive rate would isolate them from sudden changes in airfares and other consulting expenses and help keep their expenses under budget. But than all the risk is put on the consultant.

Craig

Martin_US
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Re: Rates

Post by Martin_US » Thu Jul 11, 2013 6:22 pm

I don't know, if you are right there Craig. You might very well be.

My impression is that at first, we had fixed per diem, then they went to have receipts for everything.
Which I think is nuts because of all the paper work. So I want to go back to the per diem and hotel rates.

Plus the agencies never disclose what they are billing and obviously always push the rate.

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Re: Rates

Post by Rich » Fri Jul 12, 2013 2:16 am

I think the 'All Inclusive' thing is starting to be the accepted norm these days. I for one think that this is not right because where you are travelling a lot in different countries, at the time of being asked for a rate you generally have not had time to research flights, hotels etc etc.

I would much prefer a daily rate plus expenses.
Regards

Rich

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Martin_US
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Re: Rates

Post by Martin_US » Fri Jul 12, 2013 4:57 am

I agree Rich,

hence my idea with the official per diem and hotel. I know that Germany has something like it.

The point is exactly as you say: You don't have the time to research everything. Especially when you don't have the exact address of the client. Imagine its a pure business district with no food or hotel near by and you need a rental car all the time even for lunch break.

So, if the government is doing that for you already and all you have to worry about is a car rental and flight, that's doable.

Of course the next step is to avoid the rip off agencies, but the friendly AP database will tell you sooner or later what they charge :lol:

Oh, next issue of course is payment terms. Recently they think monthly payment with 30 days net.
That means you finance their operation for two month before you see any money.
I think that's a non starter. I even had people doing W2 (employment) with 14 days net, which is illegal.
Of course, the rate on W2 can not include your expenses, which they make you, because per tax code, it wouldn't be tax deductable.

But as I wrote elsewhere, people give a sh*t about the law and what is legal.

Rich
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Re: Rates

Post by Rich » Fri Jul 12, 2013 7:10 am

One thing you find nowadays is that agencies are paying only on cleared funds. Ie you'll get paid when the client pays.

I find this a bit off because you are contracted to the agency so you should get paid straight away regardless of what the client is doing. If there is a problem since the agency is contracted to the client to provide services they should argue the toss and you as the consultant should not have to suffer.
Regards

Rich

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