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If I start a new job and I'm asked to do some work for a client. The company bills the client in 15min increments, I spend time learning my companies' setup, where things are, etc... I end up billing the client for "2 Hours". Now as I improve my skills each subsequent time I do the same or a similar task for a client it should take me less time. But this means as time goes forward I would be able to bill less hours for the same work. Now, I have to do more tasks to fill in the empty space created by the shorten work time.

Do I continue to bill clients for 2 hours for that same/similar task?

It seems like billable hours punishes those employees who are "faster" If I can do 2 hours of Bob's work in 15 minutes, I should be able to 

A. Leave for the next 1:45  
B. Bill 2 Hours, and spend the next 1:45 working on other billable work
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    You should direct your question to your management. They should have minimum hourly billing practices. In general, it is to your advantage that you are thoroughly familiar with your employer's billing practices. I once worked for a consulting company that allowed me to charge it for lunch time, if my memory serves me well - Never took advantage of that :) – Vietnhi Phuvan May 23 '14 at 16:35
  • You should either bill for as many hours as your company says you should bill for or bill for the number of hours you spent. Of course the first option sort of presents an ethical situation, why are you in a company, that won't let you bill actual hours. – Donald May 23 '14 at 17:12
  • This may not be specific to your company but it is not about navigating the workplace. It is a business quesiton that is off topic here. – IDrinkandIKnowThings May 23 '14 at 17:29
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    @Ramhound The first option is more common than you would think. My company (Fortune 500) only allows us to bill 40 hours in a week. So if I work 50 hours, we are only billing the customer for 40. Kind of the opposite problem from the OP, but still strange to me. – David K May 23 '14 at 19:27
  • David billing less is a separate problem unless your not be paid for those 50 hours. Billing the client for more is basically fraud, billing less, is a contract clause. I suppose you could have min billing hour clauae – Donald May 23 '14 at 19:34
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First, I am assuming you are an independent contractor. If you are not, then @JoeStrazzere's comment is the correct course - defer to your employer.

When businesses hire contractors, they know that you are not "tailored" to their business. They hire you because you have most of the skills they need, and can develop the ones you are missing. As your skill base builds, so does your efficiency. Eventually your skills reach the point where an increase in your rate is warranted, because you can now do in 10 minutes what used to take 30 minutes.

Also, don't worry about Bob. Put in your best efforts and bill for them. The client is the one to make the decision as to whether or not it's worth what you're charging.

Again, if you're an employee, then all of this is moot and you should defer to your employer's instructions.

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If the bill sent out by you (or your company) is based on hours worked, then it is at least unethical. IANAL, but I believe in some jurisdictions this is also illegal, deemed to be fraud. If your contract is to deliver a product or finished project and the tracking of hours is for internal use, that is a different situation and is an internal matter.

Let's take your example, suppose you are so good that it takes you 30 minutes to what would take someone else 2 hours. So you take the extra 1.5 hours and do the same amount of work for 3 other clients. If you bill them all for 2 hours based on your theory, you will bill for 8 hours. If you extend that thought, you will bill for 160 hours that week. Interesting, since there are only 168 hours in a 7 day period. Hopefully, this will demonstrate why this practice should not happen.

As your skillset and expertise grows, you or your company should adjust your billing rate to reflect that.

tl;dr
Part of your question is asking us whether you should lie to your clients. Hopefully looking at it in that light will give you some direction.

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  • I see your point. I actually prefer option A. I get it done in 15 minutes, bill what it should take 2hrs, and go to the beach for and hour forty five. (No double billing that way) :-) – Mr. Manager May 23 '14 at 17:37
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    @Mr.Manager, if you did that in my shop, I'd fire you. If I am paying you to work a full week, I am paying for the whole week not your beach time. If there is no other work to do yes then you can usually leave if you are salaried, but there is virtually always a backlog of work and I would expect that you would do it if you finished the first task. Bill the fifteen minuteas and then move onto the next task like a professional. – HLGEM May 23 '14 at 18:40
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    @cdkMoose, what you described is allowed/used in the Automotive industry. estimate writers use a "book" with established industry guidelines that indicate how long a job should take. "install wiper motor takes 1.5 hours" if the client accepts that estimate but the actual mechanic can fix the problem quicker, he gets paid off of the 1.5 hours.(because that is what the client agreed to) This system encourages efficient employees since he can "flag" over 40 hours a week, without working over 40 hours. The catch is that you must have a "book" with those accepted industry standards – Mr. Manager May 27 '14 at 14:43
  • @Mr.Manager, I would have to disagree. The difference being that I am told the price up front based on that standard estimate. So I am not being billed by the hour, I am just paying a price determined by a time estimate. If the mechanic can do it faster, the shop wins. If the mechanic can not do it fast enough the shop loses. This is really a fixed price contract, where the price was determined by estimating. This is the same model that fixed price development contracts work on. OPs question was specifically about hourly billing. – cdkMoose May 28 '14 at 14:18
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In general, your company will realize that you are more awesome and start charging more for your (more awesome) time - though it's decidedly not guaranteed that you will actually see any of that. It's generally frowned upon to bill for more hours than you work. That can end up on an invoice to the client, who can be upset when things don't add up. And it can end up on your internal reports which leads to questions about how you're billing 30 hours in a day...

But different companies have different standard practices. When in doubt, ask your boss.

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  • I think I understand your point, I guess I really don't get billing by the hour, I can only see the negative side; that it encourages working slowly, over-engineering, not learning a faster way to do things. I mean if I said to you, "Go to the store, I'll pay you for the time it takes you to get there". You would probably walk. However, If I said "I'll pay you 50 bucks each time you go to the store in an 8 hour day" You'd probably go in a Ferrari. I guess I need to be educated on the positive aspects. – Mr. Manager May 23 '14 at 19:13

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