Methods of Charging

Depending on the nature of the work, the time taken and the client's preference, payment can be made on the following bases:

1. Hourly charges and expenses
2. Retainer, hourly charges and expenses
3. Lump sum

Method 1 is generally suitable for occasional consultancy and the charges made are at the highest current rate. Method 2 involves commitment by both H+REI and the client, and lends itself to continuous work and tasks of unpredictable extent, but brings the benefit of lower hourly charges for a fixed period. Method 3 is suitable for clearly defined tasks for which the client wishes to have a limited commitment.

Accounts

The computerised accounts system used is based on data recorded on personal and machine time sheets kept in the office. The information from these sheets is entered once a month, using a code for each client, job and task. Each month a job statement and a budget statement is output, together with an analysis of the month's work. The 'job statement' for each task gives details of hours spent each day, the grade of staff involved, any expenses incurred and a cross reference to the relevant time sheet.

When work is being billed by the hour, a copy of the job statement is sent to the client each month with the invoice. In the case of work paid for on the basis of lumpsums, only the budget statement is sent with the invoice, and the job statement is used by H+REI for management purposes.

If a client requires more extensive reporting and cost analysis for job control or management purposes, the work involved to prepare this information is charged to the job.

Terms of Payment

Invoices are payable within 30 days of presentation. H+REI reserve the right to add interest to accounts outstanding more than 30 days beyond the date of invoice at a rate of 4 per cent over the current bank base rate. Queries on invoices should be raised within 30 days of presentation.

Budgets

At the beginning of each job, an estimate is prepared of the time and expenses involved in carrying out each task, and costed by the current hourly rates for the personnel involved. This estimate usually forms part of the proposal to the client, and the task numbers and estimated costs are the basis of the agreement for the work and future invoicing

The totals for each task in the estimate become the budget figures if charging is on simple hourly rates. If a retainer is paid, this is invoiced separately when due. In the case of lump sums, the estimate is increased by a margin to form budget figures for the stages of work

The agreed budget figures are set in the computerised accounts system and each month a budget statement is produced on each task to show the proportion expended

Except by special agreement, H+REI do not commit themselves to specific completion dates or, except in the case of lump sums, to fixed costs. Every endeavour is made to meet agreed target dates and budgets but, merely by undertaking work, H+REI do not give or imply any guarantees

VAT is not allowed for in the estimate, or the budget based on it, and it is shown as a separate entry on job statements and invoices.

Hourly Charges

Time expended by staff is recorded in half hourly units against agreed tasks. There are separate rates for Directors and four grades of staff, and each month the time expended at each rate is calculated and invoiced in arrears

Senior staff used on lower grade work are charged at the appropriate lesser rate. Current rates can be reduced by 20 to 25 per cent when a retainer is paid. Time spent travelling may be charged at the full hourly rate up to eight hours in any one day

When charging on an hourly basis without retainer (see below), H+REI reserve the right to adjust the rates following one month's notice to the client.

Retainers

The payment of a retainer is a means of ensuring prior right to particular services, fixed or reduced hourly charges and security of development work or as a way of initiating and supporting capital, or staff intensive projects. The retainer secures the services of H+REI for a period of one, two or three years, as may be agreed, and is related to a particular project or type of service

The size of the retainer is based on the period contracted for, the scale and nature of the project, and the responsibilities involved

The retainer is payable in quarterly instalments in advance for the whole of the period contracted for, and is a fixed charge, irrespective of the degree to which the demand for the relevant services materialises. It continues to be due for the agreed period regardless of changes in the work load or whether the work is abandoned.

Expenses

Expenses are recorded on time sheets by the authorising staff, either as they are incurred or when they are invoiced by subcontractors, and they are invoiced monthly in arrears

Travel by H+R vehicle is recorded as mileage and billed at the current rates recommended by the Automobile Association. The cost of public transport, subsistence and similar out of pocket expenses are charged at cost. In house photocopying, data preparation and computer time are charged at rates calculated for each machine

External expenses undertaken on behalf of the client, eg printing, couriers, bureau charges, and purchase of equipment, are charged at cost, plus 15 per cent.

Lump Sums

Clearly defined tasks can be carried out on the basis of a lump sum fee. Depending on the scope of the work and the time taken, the fee may be invoiced in one or more agreed stages related to the progress of the work. In cases demanding early capital expenditure or allocation of staff, or the commitment of other resources, a proportion of the lump sum may be billed in advance.

Lump sums are normally calculated on the basis of an estimate of time and expenses weighted by 20 to 25 per cent to cover contingencies, inflation and the irregular cash flow involved.

Standard Rates

Standard rates are charged as follows:

Senior Legal	Rate S	£150 per hour
Legal	Rate L	£110 per hour
Director	Rate P	£85 per hour
Senior scientific	Rate A	£75 per hour
Senior technical	Rate B	£65 per hour
Technical	Rate C	£55 per hour
Assistant and clerical	Rate D	£45 per hour
Rothound		£150 call out

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