New to DMM and Question on Discovery Process

[Anonymous]

Hello All….I am new to the DMM community as of January 2019, just starting up my business in Bethlehem/Lehigh Valley, Pennsylvania and have a question about the initial client set up (what I’m calling the “Discovery Process”). The Discovery Process in my mind is sitting down with the client and finding out what accounts they have, what needs to be paid and when, setting up their budget of expenditures, etc.. and I’m curious what others are doing with regard to compensation for this “Discovery Process”.

I’m thinking it should be part of an hourly rate in the beginning because you have no idea how long it’s going to take and then once you have a handle on how much time you need to invest each month with each client based on their needs, then I can migrate those clients to a monthly flat rate system to make their budgeting of my services to them easier.

I’m struggling a bit in this space because I know the initial investment of my time and their time to set this up properly is worth something, but I’m just not sure what the right thing to do is here. Do I give that away for free and part of the cost of doing business? Any help and insight that the seasoned professionals can give me and others just starting out would be fantastic and much appreciated.

Thanks in advance for your responses. Best Regards….diane

[Anonymous]

I tell clients that the first 2 to 3 months involve a lot of fact-finding and documenting their DMM needs, not to mention organizing their paperwork. It generally involves 10 to 20 hours per month until we develop an idea of what the monthly needs will be. By month 4 we’ll have an idea of a range of hours will be.

However, I never bill at a flat rate because I find that the work we do is unpredictable and each month brings different responsibilities and hours spent servicing our clients. We track our work carefully and account for all work on our invoices.

I hope this helps.

[Anonymous]

Thanks for your insight Peter…to follow up with an additional question. Do you charge your hourly fee for those 10-20 hours during the first few months? And are you clients OK with paying that fee or do they challenge it when the bill comes in that it was more hours than they thought it was going to be times the hourly rate that you charge? That is what I’m afraid is going to happen.

[Anonymous]

I always bill clients hourly in the beginning. I always warn them that it takes substantially more hours in the first 3 months than it does after that initial term. I try to get most of my clients over to a flat rate, but that won’t always make sense. For example, I have a client who I probably spend 6-7 hours a month on the phone with. If I put her on a flat rate, that would be more like 15 hours a month. She would never stop calling me. For the most part, however, once we are in a routine, the work is pretty consistent from month to month for most of my clients and I am comfortable with flat rate billing. It saves me a lot of time in my billing and it is more predictable for my clients.

[Anonymous]

Thanks Caitlin….I will follow your lead and stick with hourly billing and revisit Flat Rate Billing down the road. I appreciate the advice.

[Author]

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