I am being asked by a client to provide invoices from other clients showing that I was paid the hourly rate that I want to charge them. In other words, Client A wants to see my invoices to Client B and Client C to prove that I got away with charging $N/hr.
This doesn't seem right to me. Should I do it, and what information should I keep away from them? If I protect my client's identities, they won't be able to verify the invoice is true, so this is just an exercise in paper-pushing, but if I do show the full invoice, then I'm compromising my client's privacy.
ask him to share his YTD profit & cost of goods spreadsheet. When he answers "that's none of your business", you say "exactly".
Translation to english: "I don't believe you're worth $X - can you prove to me someone actually paid you $X?"
You DO NOT WANT to work with a client like that. Any client who's audacious enough to say that to your face will make you jump through hoops before you'll see a nickel from him.
Unless you're hungry and must have this client - do that:
Be very blunt. Tell him your finances or business records are none of his damn business. If he walks, good for you. You just saved yourself a lot of future grief. If he backs down from his demand, he'll know his place and your relationship with him will be better.
RED FLAG. This is either:
(1) negotiation tactic if he does not trust you or he thinks "market rate" is lower
(2) he needs to show management because they don't believe him.
(3) indication that you are asking for more than budgeted (you're the odd guy) and maybe he needs it to prove this to his management to get you on board.
(4) he's fishing for information because he really does not know the market rate (worst case because he may or may not really want you)
As rude as it is... clients will ask. But also try to work it out with him because its unlikely that he's TRYING to be a jerk (at least I hope not for your sake!).
a) Ask him why he would like this? You need to know what's in his head.
b) Go ahead and tell him that this is an unusual request. Because it is!
c) If you feel uncomfortable about it - don't disclose it. If he really needs you - he'll pay what you ask him to pay.
Other things to consider: Does your old NDA govern your disclosure: If you have an NDA with the past client, then its fair to say that you have a non-disclosure that governs your client's privacy including contracts and other documents like invoices. Therefore - you are not in a position to release this information because it shares what they pay for services.
Explain that the rate is your current expectation based on market rate and your skills. Discussing it with your past clients is irrelevant. It's like going to the gas station and asking to pay last months prices. (Ha)
Ask if the disclosure of this confidential information required to get the job? If it is, and you're uncomfortable with it, then you should think twice about joining.
Last - tell him that you're an honest guy and your reputation is important. If he does not trust you, give him the opportunity to talk with your references.
This is a red flag to me. Sounds like a client that is going to be a giant pain in your butt as long as you are working for them. I'd say no, and if that a deal-breaker for them then it might be a deal that's better when broken.
I'll agree with the other guys here that unless you're really hurting for money, the last thing you want is a client like this. Let somebody else who is more desperate than you handle him.
Just be respectful but firm with this potential client.
Tell them that 1) it's inappropriate to ask to see another clients bill 2) your quoted rates are reasonable and within industry ranges for your skillset and that if they feel differently they are free to look elsewere.
Unless you are dead desperate to pay your bills stick to your guns on the rates your charge. You know what your work is worth, as long as it's not crazy out of normal ranges you are better off not working for a client that would have the audacity to ask such a inappropriate question like seeing another clients bill.
Now that we know they need the information for a third-party (auditor) and you've worked on a previous contract for a lower rate, this isn't so outrageous.
amol's comment about charging for the additional explanation is a good point. Creating additional documentaion for specs, quotes, project time-frames etc. are costly with no guarantee of getting the account. Even worse, they use the figures to negotiate with a competitor or used to do the job themselves.
At least they could pay something up front which you could deduct from the bill if they accept your quote.
And even if you are hurting for money, it's probably still best to walk away, or you're very likely to have the client from hell who finds every possible opportunity to shave off $10 here and $10 there... Oh that can't possibly have taken 2 hours, I'll pay one... etc.
And after giving you a brutal kicking for your bill, he'll no doubt ask for a discount, whilst making comments about how you must drive a top end BMW.
In my opinion it would be a breach of trust with your previous clients to provide this information. If I found out that someone I had contracted with had shared invoices they had sent me with another company I would never do business with that person again.
The price that you quote is either acceptable or not. How much you have charged other businesses is irrelevant.
I would suppose that you can explain them that your services are worth this rate. They should do their own homework and compare your prices with the competition.
That is a standard process because you could always present falsified invoices. They do not have the resources to check that. Moreover, such information should remain confidential. Even, if you had charged a different rate, that is not their business. It is a free economy and you can charge whatever you like to whomever you like.
However, your claim that the time-frame was tight, in comparison to previous work, is not solid. One could challenge this on the basis that you should claim more time on the project but the hourly rate should remain the same.
It is plainly unacceptable to provide information to this client that is commercially sensitive to other clients and especially yourself.
The market rate for a service is the price that is finally accepted between supplier and consumer. It's as simple as that. Business economics.
If you manage to strike a deal then the agreed rate was correct.
If you fail to strike a deal then the offered rate was incorrect.
I would word a proposal that indicates the reasons for the rate difference with other work done for them, and they can file it with your invoices for their auditor.