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Charge-Out Rates ​

Configure how much you bill per hour for different team members, projects, and job types.

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Learn how Hidma determines which charge-out rate to apply when creating bills.

Overview ​

Charge-out rates are the foundation of your billing calculations - they determine how much you charge clients per hour of work. When you create a bill from tracked time, Hidma automatically applies the appropriate charge-out rate to each hour logged, calculating the dollar amount that appears on the invoice. Getting charge-out rates right ensures accurate billing, proper revenue recognition, and appropriate pricing for different levels of expertise or types of work.

Hidma provides a sophisticated rate hierarchy that gives you tremendous flexibility in how you price work. You can set default rates that apply organization-wide, team-specific rates for different practice areas or service lines, project-specific rates when clients negotiate special pricing, job-specific rates when certain work commands premium pricing, and user-specific rates that reflect individual expertise and seniority. This hierarchy ensures the right rate applies in any situation while maintaining clear, understandable rules about precedence.

How Charge-Out Rates Work ​

The Rate Hierarchy ​

When Hidma creates a bill and needs to determine what rate to apply to each hour of work, it follows a specific precedence order - starting with the most specific rates and falling back to more general defaults if no specific rate exists. Understanding this hierarchy helps you configure rates appropriately and predict what will be charged.

Default Charge-Out Rate sits at the bottom of the hierarchy as the ultimate fallback. This organization-wide rate applies when no more specific rate exists for a particular piece of work. Think of it as your baseline hourly rate - perhaps $150/hour for your firm. If someone logs time and no team rate, user rate, project rate, or job rate applies, Hidma uses this default. Setting a sensible default ensures that even without extensive rate configuration, billing can happen with reasonable amounts.

Team-Specific Rates override the default when a team member belongs to a team that has configured rates. Many firms organize teams by practice area or service line - perhaps a Tax Team, Audit Team, and Advisory Team. Each team might have different baseline rates reflecting market positioning or client expectations for that service. When a team member from the Tax Team logs time, Hidma checks if the Tax Team has specific rates configured. If yes, those team rates are considered before the default, providing the first level of specialization in your pricing.

Within team rates, Hidma further considers specialization: job-specific team rates (what the Tax Team charges for research versus preparation), client-specific team rates (what the Tax Team charges this particular client), and project-specific team rates (what the Tax Team charges for this specific engagement). These team-level specializations let you price different types of work or different clients appropriately even before considering individual team members.

User-Specific Rates override team rates and represent pricing based on individual expertise and seniority. A senior partner might bill at $500/hour regardless of their team, while a junior associate bills at $150/hour. When that senior partner logs time, Hidma finds their user-specific rate and applies it instead of the team rate. This ensures clients pay appropriately based on who actually did the work, not just what team they belong to.

Like team rates, user rates can have further specialization: job-specific user rates (perhaps this partner charges more for expert witness work), client-specific user rates (negotiated rates for specific clients), and project-specific user rates (special pricing for particular engagements). These user-level specializations provide granular control over pricing while maintaining the hierarchy's clarity.

Project-Specific Rates sit at the top of the hierarchy for most situations. When you negotiate a fixed rate for a specific project - perhaps this client will pay $200/hour regardless of who works on it - that project rate overrides everything else. Project rates ensure contractual commitments are honored automatically, without requiring billing review to catch and adjust rates. If work is logged to a project with specific rates, those rates win, period.

Rate Precedence in Practice ​

Let's walk through how Hidma actually determines which rate to apply when creating a bill, using a concrete example.

Imagine you're billing for work performed by "John Smith," a member of your Tax Team. John logged 10 hours to the "Acme Corp 2024 Tax Return" project, performing "Tax Research" work. Here's how Hidma determines the rate:

Step 1: Check for Project-Specific Rate Does the "Acme Corp 2024 Tax Return" project have a configured rate? If yes, use it immediately - we're done. Project rates override everything, so if you negotiated $225/hour for all work on this engagement, that's what gets billed regardless of who did it or what type of work it was.

Step 2: Check for User-Specific Rates (if no project rate exists) Does John Smith have configured rates? If yes, check for specialization:

  • Does John have a rate specific to the Acme Corp client? Use that.
  • Does John have a rate specific to "Tax Research" work? Use that.
  • Does John have a general user rate? Use that.

If John is a senior tax partner with a configured rate of $450/hour, that's what gets applied.

Step 3: Check for Team-Specific Rates (if no user rate exists) Does the Tax Team (John's team) have configured rates? If yes, check for specialization:

  • Does the Tax Team have a rate specific to Acme Corp? Use that.
  • Does the Tax Team have a rate specific to "Tax Research"? Use that.
  • Does the Tax Team have a general team rate? Use that.

Perhaps the Tax Team bills $275/hour, so that's what gets applied if John doesn't have his own rate.

Step 4: Fall Back to Default Rate (if nothing else exists) If none of the above rates exist, use the organization-wide default charge-out rate. Perhaps your firm's default is $200/hour, so that's what gets billed.

This hierarchical checking happens automatically every time you create a bill, ensuring the right rate applies without manual intervention.

Date Ranges and Rate Changes ​

Charge-out rates aren't static forever - you raise rates periodically as your expertise grows, market conditions change, or inflation requires adjustment. Hidma handles rate changes gracefully through date ranges, ensuring historical billing uses the rates that were current when the work was performed, while future billing uses updated rates.

When you configure a charge-out rate, you can specify effective dates: a start date (when this rate begins applying) and optionally an end date (when it stops applying). For work performed during the rate's effective period, that rate applies. For work outside the period, Hidma looks for other rates that were effective then or falls back to the default.

This date-aware rating means you can set up rate changes in advance. On December 15, you might configure new rates effective January 1 of next year. Work performed in December gets billed at the old rates (correct for when it happened), while work performed in January automatically gets the new rates (correct for that period). No manual rate adjustments needed, no risk of forgetting to update rates when the new year arrives.

Configuring Charge-Out Rates ​

Setting Default Rates ​

Navigate to Settings → Configuration → Charge-Out Rates. The default rate appears at the top of the configuration screen. This is your organization-wide baseline - what gets charged when nothing more specific exists.

Enter your default hourly rate - perhaps $150, $200, $250, whatever represents your firm's baseline pricing. Save it, and this rate immediately becomes the fallback for any billing that doesn't match more specific rate configurations. Setting a reasonable default is essential before configuring specialized rates, since it ensures billing can always calculate an amount even when specific configurations don't exist.

Configuring Team Rates ​

If your organization has teams with different pricing - perhaps by practice area, service line, or office location - configure team-specific rates. Navigate to Settings → Teams, select a team, and access its charge-out rate configuration.

Enter the base rate for this team - what members of this team bill by default. This might be $275/hour for the Tax Team, $225/hour for the Bookkeeping Team, $350/hour for the Advisory Team. These team rates automatically apply to all work performed by team members, overriding the organization default while remaining subordinate to user and project rates.

You can further specialize team rates by job type (Tax Research at $300/hour, Tax Preparation at $250/hour), by client (special rates for certain clients), or by project (negotiated rates for specific engagements). These specializations let you price work appropriately without having to configure rates for every individual user.

Configuring User Rates ​

For individuals whose pricing differs from their team baseline - typically senior partners or specialized experts who command premium rates, or junior staff who bill below the team average - configure user-specific rates.

Navigate to Settings → Users, select a user, and access their rate configuration. Enter their base rate - what this person bills by default. Perhaps a senior partner bills $500/hour, a manager bills $250/hour, an associate bills $150/hour. These rates override both the default and the user's team rate, ensuring clients pay appropriately based on who actually performed the work.

Like team rates, user rates can be specialized by job type (perhaps this partner charges $750/hour for expert witness testimony), by client (negotiated rates for certain relationships), or by project (special pricing for specific engagements). This granular configuration ensures accurate pricing in any situation.

Configuring Project Rates ​

When you negotiate special pricing for a specific project - perhaps a fixed hourly rate for all work on an engagement, or a client who negotiated rates lower than your standard pricing - configure project-specific rates that override all other rate calculations.

Navigate to the project and access its rate configuration. Enter the negotiated rate for this project - perhaps $225/hour for all work regardless of who performs it or what type of work it is. Once configured, any time logged to this project automatically bills at the project rate, ensuring contractual commitments are honored without requiring manual billing review.

Project rates can also be specialized by user (perhaps the partner bills at a different rate than associates on this project) or by job type (different rates for different types of work within the engagement). This flexibility lets you honor complex pricing agreements while maintaining automated rate application.

Best Practices ​

Rate Configuration Tips

Start Simple, Add Complexity as Needed Don't feel obligated to configure rates at every level of the hierarchy immediately. Start with a sensible default rate and user-specific rates for your team. This simple configuration handles most billing scenarios. Add team rates when you notice teams consistently billing at different amounts. Add job-specific rates when certain work commands premium pricing. Add project rates when clients negotiate special terms. Let complexity grow organically based on actual needs rather than configuring exhaustively upfront.

Document Rate Negotiations When you configure non-standard rates - particularly project-specific or client-specific rates - add notes documenting why the rate exists. "Negotiated 15% discount for high volume commitment," or "Premium rate for rush work," or "Reduced rate for nonprofit client." These notes are invaluable six months later when someone questions why this client is being billed differently, or when renewing the engagement and needing to remember what was agreed.

Review Rates Annually Set a calendar reminder to review all configured charge-out rates at least annually, ideally in Q4 before the new year. Are your rates keeping pace with market conditions and inflation? Have team members' expertise levels changed, warranting rate increases? Are project-specific rates from old engagements still in the system but no longer relevant? Annual rate review ensures your pricing stays current and profitable while cleaning up outdated configurations.

Use Date Ranges for Rate Increases When raising rates effective at a future date, configure the new rates with start dates rather than waiting until the date arrives to update configuration. This advance setup ensures the new rates apply automatically when the date arrives, eliminates the risk of forgetting to update rates, and provides clarity about when rates changed for any historical analysis or client discussions.

Test Rate Application Before Big Bills Before sending a major invoice - particularly for new clients, new projects, or situations where rates changed recently - create a test bill with a small amount of time to verify the correct rates are applying. Check that the rate shown matches your expectations based on the hierarchy. If it doesn't, investigate the rate configuration to understand why. This testing catches rate errors before they reach clients, preventing awkward corrections and maintaining professional credibility.

Align Rates With Value, Not Just Cost Charge-out rates should reflect the value delivered to clients, not merely cover your costs. A senior partner's experience means work gets done faster, with better quality, and with strategic insight that less experienced staff can't provide. That value justifies premium pricing even though their actual time cost might not be proportionally higher. Price based on outcomes and expertise, not just input costs, and clients will accept the rates as fair.

Common Scenarios ​

Scenario: Partner Premium Pricing ​

Situation: Senior partners should bill at $500/hour regardless of project or team, but other team members bill at varying standard rates.

Solution: Configure user-specific rates of $500/hour for each partner. Leave team and project rates at standard levels. When partners log time to any project, their rate overrides the project and team rates, ensuring they always bill at their premium rate.

Scenario: Negotiated Project Rate ​

Situation: Client negotiated $200/hour for all work on their annual tax engagement, regardless of who performs it.

Solution: Configure a project-specific rate of $200/hour on the tax engagement project. Don't set user or job specializations. Now anyone logging time to this project automatically bills at $200/hour, honoring the negotiated agreement without requiring billing review to catch and adjust rates.

Scenario: Premium for Specialized Work ​

Situation: Expert witness testimony bills at $750/hour, but regular work by the same partner bills at $500/hour.

Solution: Configure the partner's user rate as $500/hour (their normal rate), then add a job-specific override for "Expert Witness Testimony" at $750/hour. Regular work bills at $500/hour, but when this partner logs time to the expert witness job type, the job-specific rate overrides the base user rate, charging $750/hour.

Scenario: Different Teams, Different Pricing ​

Situation: Tax Team bills $300/hour average, Bookkeeping Team bills $175/hour average, Advisory bills $350/hour average.

Solution: Configure team-specific rates for each team at their respective amounts. Team members without individual user rates automatically inherit their team's rate when billing. Team members with user rates (like partners or specialists) override the team rate with their individual pricing, but general staff bill at the team rate.

Troubleshooting ​

Wrong rate appeared on bill Check the rate hierarchy to understand which rate Hidma applied. Navigate to the project, user, team, and job to see what rates are configured. The most specific rate wins. If a rate you didn't expect appeared, likely there's a more specific configuration than you realized - perhaps a job-specific rate or project-specific rate you forgot existed.

Rate change not applying Check the effective date range on the new rate. If you configured it with a start date in the future, it won't apply to current work. If you configured it without ending the old rate, Hidma might be confused about which applies. Ensure old rates have end dates before new rates' start dates, with no gaps or overlaps.

Same person billing different rates This is typically intentional due to the hierarchy. Perhaps they have a base user rate of $300/hour, but certain projects have negotiated rates of $250/hour, so their time on those projects bills at the project rate. Or certain job types have premium rates. Check for job-specific, client-specific, or project-specific rate overrides that would cause variation.

Need Help?

Understanding charge-out rate hierarchy ensures accurate billing. If you're unsure which rates to configure, start simple with defaults and user rates, then add complexity as needed.

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