Billing policy template for agencies: hours, increments and payment terms

What should your billing policy say?

The template has thirteen clauses covering billable work, increments, rates, invoices, payment and delays. Copy the list, replace the bracketed placeholders and delete clauses that do not apply.

1. What we bill: all time spent on your work, including design, writing, development, research, project management, calls, meetings and email about your project.
2. Increments: we record time as it happens and bill it in [15]-minute increments, [rounded up / rounded to the nearest increment]. We apply this to the total time on your project each day, not to each email or call.
3. Short calls and emails: a short email or call is billed as part of that day's total. On days when the total for your project is under [10] minutes, we do not bill it.
4. Meetings: meetings with you, and our internal meetings to plan or review your work, are billable for each team member who attends. Our general team and company meetings are not.
5. Revisions: each deliverable includes [two] rounds of revisions. Further rounds are billed at our hourly rate, and we will tell you before a round starts if it will be billed.
6. Travel and expenses: travel time is billed at [50]% of our hourly rate. Expenses such as stock images, fonts, software or printing are billed at cost, with your approval for anything over [$100].
7. Waiting on third parties: time we spend on hold or waiting in real time with a supplier, platform or authority on your behalf is billable. Time we are simply waiting for your feedback is not.
8. New requests: work outside the agreed scope is quoted before we start if it will take more than [two] hours. Smaller requests are billed hourly and shown on the next invoice.
9. Our own mistakes: time spent fixing our errors, learning a new tool, or running over a fixed estimate without your agreement is not billed.
10. Rates: our hourly rate is [$120]. We review it once a year and give [60] days' notice of any change.
11. Invoices: we invoice on the [first working day] of each month for the previous month's time, with a report of hours by task. Retainers and deposits are invoiced in advance.
12. Payment terms: invoices are due within [14] days. If an invoice is more than [30] days overdue, we may pause work until it is paid.
13. Delays and approvals: if we are waiting on your feedback or approval for more than [10] working days, we invoice the work completed so far, and the schedule moves by the length of the delay.

Add one line at the end for questions: "If anything on an invoice is unclear, ask within [10] days and we will send the detailed time entries behind it." That single sentence heads off most disputes, because it shows you have the records and are willing to share them.

The numbers in brackets are placeholders, not recommendations. A design studio with long projects might choose 30-minute increments and three revision rounds; a consultancy billing senior advice might bill in tenths and include no revisions at all. What matters is that the number is written down and the same for every client.

Why does an agency need a billing policy?

Because without one, every invoice is a set of small judgment calls made by whoever drafts it, and they are made differently each month. A written policy makes the calls once, in advance, where the client can see them.

The questions are always the same. One agency owner with 25 years in the business asked a forum whether 5-minute emails count, whether a call to plan changes is billable, and whether to bill in tenths or quarters of an hour. The most useful replies did not answer the questions directly. They said to write a one-page billing policy with a minimum increment and a rule for which meetings and emails count, then review write-offs monthly. That is what the template below does.

A policy is not a contract, and it does not replace one. Think of it as the billing section your contract points to: short enough to attach to every proposal and plain enough that a client reads it. Have your contract or terms reference it, and if you work in a regulated field or across borders, have someone qualified check the payment clauses against the rules where you and your clients are.

Should you round each entry or the daily total?

Apply the increment once to the daily total for each project. Rounding every email and call separately multiplies the billed time; rounding the daily total keeps the bill closer to the time worked.

Here is a sample day of small contact for one client at $120 an hour: five emails of four minutes each and one seven-minute call, 27 minutes in all.

The same 27 minutes can be billed at anything from $54 to $180. A per-item minimum of 15 minutes bills more than three times the time actually spent, and any client who reads the hours report will spot six quarter-hour lines in one day. Rounding the daily total costs the client $6 and costs you nothing in trust.

Whichever rule you pick, say "rounded up" or "rounded to the nearest" in the policy, and keep the exact minutes in your records. The 6-minute billing chart walks through the same choice for firms that bill in tenths of an hour.

Are internal meetings and hold time billable?

Internal meetings about a client's work usually are, and general team meetings are not. Hold time spent on the client's behalf usually is, and time spent waiting for the client usually is not. The policy should say which, because these are the two categories clients are most likely to question.

Internal meetings are where agencies lose the most time without noticing. One consultant described four to six hours of meetings a day on top of about nine billable hours. Not all of that belongs on an invoice, but a planning session about one client's campaign is work on that campaign. The fair line is the one in clause 4: billable when the meeting is about the client's project, not when it is about running the agency.

Hold time is the same question in a different form. A paralegal described spending three hours on hold with a trademark office on a client's matter. Some firms bill that; others record it as unbilled time so it still counts toward the person's targets without appearing on the invoice. Either works, as long as the policy says which, and as long as the time is recorded in both cases so you know what it costs you.

Travel is the third category clients notice. Billing travel at a reduced rate, half is common, acknowledges that the time is lost to you without charging full rate for sitting on a train. If most of your work is remote, you can drop the clause and quote travel separately when it comes up.

How should you review monthly write-offs?

Compare the time tracked as billable with the time actually invoiced, and sort the difference into reasons. Some write-offs are policy working as intended; others are leaks that need fixing. The review exists to tell the two apart.

Eleven of the 17 hours follow the policy. The six hours over estimate need attention: the next quote for that kind of project needs more time in it. If the same reason appears three months running, change the policy or the quoting, not the invoice. The method for that is in pricing fixed-fee projects from the hours they took last time.

Keep the review short and regular, ideally the day before invoices go out. A write-off decided then is a business decision; one discovered at the end of the year is just a loss.

What payment terms should a marketing agency use?

Short ones, stated plainly: invoice monthly, payment due in 14 to 30 days, deposits or retainers in advance, and a clear consequence for late payment. The exact number matters less than the fact that it is in writing and the same for everyone.

• Monthly invoicing: invoicing on a fixed day each month, rather than when a project finishes, keeps cash coming in on long projects and keeps each invoice small enough to check.
• Deposits: many agencies ask for part of a project fee up front, often half for a new client. It filters out clients who were never going to pay, and it funds the first weeks of work.
• Due dates: 14 days is common for small clients; larger companies may insist on 30 or longer because of their own payment runs. Agree it before work starts rather than discovering it on the first invoice.
• Late payment: pausing work on overdue accounts is the consequence most agencies can enforce. Late fees and interest depend on local law, so check before you add one.

If you are deciding between hourly and day-rate billing for some clients, the payment terms work the same way for both. The trade-offs of each are covered in daily and hourly billing.

What happens when client approval is delayed?

The policy should let you invoice for work done even when the client has not signed it off, and should move the schedule when they are slow. Without that clause, a client who takes six weeks to give feedback leaves you funding their project for six weeks.

Clause 13 addresses the wait for client feedback. Small studios describe the same fixes: Invoice monthly for phases already started rather than on completion. If feedback has not arrived within a set number of working days, send the next invoice anyway. And make the deadline move with the delay, so a late approval does not turn into a rushed final week that you absorb.

Write this clause in neutral terms. It is not a penalty, just a description of what happens. Most clients accept it easily when it is in the proposal; very few accept it when it appears for the first time in a frustrated email.

What records does the policy depend on?

Every clause above assumes you know how long things took. The increment needs the day's total per client, the write-off review needs billable time against invoiced time, and the dispute clause needs entries you can send. A policy without time records is a promise you cannot check.

Any time tracker that records entries per client with a billable flag will do. Timen is a free one: it keeps each entry as tracked, with a client, project and billable switch, and builds an invoice from tracked time. It has no rounding setting, so entries stay exactly as tracked and the increment is yours to apply; the free daily billing calculator rounds a client's day to 6, 15 or 30 minutes if you want the figure worked out.

Here is a sample client month turned into an invoice from a report grouped by tag, one line per type of work.

What else belongs in an agency billing policy?

Should an agency bill for 5-minute emails?

Bill them as part of the day's total for that client rather than one by one. A per-email minimum multiplies quickly: five 4-minute emails billed at 15 minutes each come to 75 minutes for 20 minutes of work.

What is a normal billing increment for an agency?

15 minutes is a common choice for agencies, and 6 minutes (a tenth of an hour) is usual in law and some consulting. Whichever you use, apply it to a daily total and state whether you round up or to the nearest.

Are internal meetings billable to the client?

Internal meetings to plan or review one client's work usually are, for each person who attends. General team and company meetings are not. Put the rule in the policy so the client sees it before the first invoice.

Where should a billing policy go?

Attach it to every proposal and reference it in your contract or terms, so the client agrees to it before work starts. Keep it to one page so it actually gets read.

What should you do with the template?

Fill in the brackets with your own numbers, delete the clauses that do not fit, and attach the page to your next proposal. Then hold a short write-off review before each invoice run, and change the policy when the same reason keeps coming up. Use the policy to make consistent billing decisions each month.