Billing customers for internal project management is a bad idea.

There’s a new phenomena in the service invoice category. Imagine this: Your company scores an account set for major growth. It could go from being a $10k account to $150k within a year. When scheduling your internal resources to work on this account and scheduling meetings or conference calls with the client you employ a “Project Manager”. Then you bill the customer back for this “Project Managers” time.

Sounds fantastic until the customer gets the invoice. Four hours @ $120+ per hour for “Project Management”??? Okay, where’s the Project Control document, the Gantt chart? Where is any deliverable at all? Where is there any value add to the customer what-so-ever for the hours you billed them to cover the cost of an internal resource scheduler? This is exactly what NWN Corporation tried to pass off to me over the last couple of weeks as billable work. I told them I would not pay another dime towards the salary of their internal project or resource planners. In fact there seems to be some confusion within some service providers these days as to what the title Project Manager means.

Yep, part of project management is resource scheduling. But unless you are scheduling THE CUSTOMERS RESOURCES you are providing precisely ZERO billable services to the customer. You are doing nothing but charging your Project Manager’s salary back to the customer. Put it in a scenario: I on a security component installation company. Imagine I win a contract to install 100 security cameras. Then imagine that I employ a Project Manager to come up with an INTERNAL project plan and schedule techs for the field. Now imagine I present that persons work as a line item on a bill to the client. WHAT? Why should any customer be forced to pay for someone to create our internal project control documentation and schedule when our techs will be on the job? Absurd. Next up, we will bill by the hour for the work our HR reps do in hiring the staff to do the work. Why not just go all the way to putting a line item for the Receivable Manager’s time to prepare the invoice? How about the janitor? I mean technicians have to pee right? Might as well bill back for toilet cleaning as a line item.

How about learning the difference between internal Project Management and genuine Project Management services for the customer. Nobody owes you a dime for the cost you incur for scheduling your staff or for a non technical person to listen in on conference calls.

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