Any IT contractors out there who might be able to help?

[SnowyHill]

We have ventured into IT Development work for a very large company. We are having difficulties managing invoicing. When we undertake work for them, we have no idea how long the piece of work will take. On the first occasion, we estimated that the work would take a week and it ended up taking three weeks. Effectively we worked free of charge for two weeks.

The second piece of work, we gave an estimate that the work would take three weeks and we would charge for any additional days on a per day basis. The piece of work ended up taking five weeks. The company concerned are not happy as they feel that it is more than they had anticipated paying. They only want to pay for the three weeks already invoiced for.

Clearly we are over-optimistic with trying to guess how long an IT project will take. It is virtually impossible to know really how difficult something will be. Unforseen snags arise and also clients want changes which seem trivial but take time to get sorted.

How do other IT Contractors manage re knowing how much to invoice? We are really struggling with this and are ending up doing lots of unpaid work in effect.

Yes, definitely! I've been at this for years and I wouldn't dare draw up my own contracts in spite of being the one who understands them all on our projects. As a big firm, we have a dedicated department for this in-house, but for a small contract a good solicitor should do.

For the importance of this, have a look at the NHS megaproject disaster (it's on the Wikipedia horror projects list). I sometimes use it as a case study when teaching this kind of stuff. In this case, one of the contractors withdrew after losing money and 'got off lightly' in that they ended up only paying somewhere around 60 million in penalties rather than the 1 billion this could have cost them. The other big contractor initially looked as though they were on the winning side but had also been bleeding cash and ended up being fined in the triple-digit million figures by authorities for not declaring their losses.

It's a bit of a minefield.

OP, there are draft agreements you could look at, like www.pandadoc.com/software-development-agreement-template/, seqlegal.com/free-legal-documents/software-development-agreement, or www.contractstandards.com/public/contracts/software-development-agreement. However, if you enter into negotiations about the contract, then best to take legal advice.

That template looks interesting. Thank you for the link. I have found a contracts solicitor close to our office that I will be contacting tomorrow.

Thanks to the brilliant advice of all you Netmums we are now much clearer about how we should be doing things. Just got to put all of the advice into practice now!

Netmums How very dare you! I've never been so insulted in my life.
Probably.

Oh no! Sorry!!!!! Used to be on Netmums many moons ago and transferred to Mumsnet due to a preference for the acidic, witty nature of Mumsnet!

I have always worked for firms that have their own standard IT contract templates so I’ve never had to draft one from scratch. It’s good that you have arranged for legal advice - contracts can be very one sided in favour of the client. The Pandadoc template linked above is particularly unfavourable to the developer in a number of areas including a cap on fees (potentially working unpaid) and unlimited liability, and confidentiality isn’t even mutual. (I like to think my contracts are more fair)

Blueroses99
Yes, I must admit that the Panadoc template looks like it would help our client more than us. I am hoping that a solicitor might be able to draft something more in our favour.

We're just moving this over to freelancers/self-employed at the OP's request.

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You need to have a set rate per hour which would make life easier for you and the company.
This does not necessarily mean that you will charge the company for every hour spent on the job.
For example if you have to do research, then that should be on your time, not the company's time.
If you are upgrading computers/software and you encounter serious problems, you need to determine, how much of this is lack of knowledge and how much stems from the equipment being old/slow Internet etc.