In the present business scenario of outsourcing various services, there are many outsourcing firms, based in India, which offer you different services. They are mainly working that you may encounter in your day to day needs. Whilst utilizing the services of these firms, the important question arises: What should be the billing method? Should it be per-task, lump sum, or hourly? 

It would appear, that in most cases, the hourly rate of payment would be the best option for both, you, and the outsourcing firm to which you have given the job. Although some countries like the Philippines may offer a lesser per-hour rate compared to India, one has to consider the expertise which is being offered. Thus, the determining factor will not just be the rates, but you have to strike a balance between the rates you pay, and the expertise you get.



While agreeing to the commercials with your service provider, it is important that you don’t pay more, it is also important that you don’t pay very less. The service provider may at times agree to lesser-than-market rates, but then would not offer you the quality of the service you desire. 

The first step, obviously, is to determine the hours which it would take, to get the job completed. You have to make a fair assessment. The best way to do this is to assume that your own staff is doing the job. Then make an honest assessment, how much time they would have taken. One has to be very fair in this calculation. Once you estimate the time that would be taken (with a ten percent margin for exigencies), then you and your service provider have to agree on the same. Most of the professional outsourcing service providers have been doing this kind of business for long and with varied clients, so, if you have made an honest assessment of the time, it is most likely, that they would also find it in order and agree to the same. This would be a good starting point, as both of you have agreed to the time that would be taken to do the job.

The next step is to calculate the hourly rates. This is the trickiest part of the deal, as there is no standard template or formula for the rates. One of the starting points would be to find the median hourly rates for similar kinds of work. This would, again, depend on the expertise required for that task. If you are giving a simple data entry kind of task, it would be done by the junior employees of the firm, who draw a lesser salary. Hence, the hourly rate would be less. But if you are giving a balance sheet preparation job, which would involve a certain level of expertise, then the charges would be higher. You need to have a fair idea of the wages market in the country to which you are outsourcing your job. India, due to its talented pool of experts, maybe slightly costly, but it gives you the best value for money which you could ever get. 

Opting for outsourcing admin work on hourly rates would be the best option in most cases. This not only is cost-effective, but also sets a time benchmark for the outsourcing firm, and you can be assured that your work will be done on time. You may also need to include a zero-error clause in your agreement. That is, if the outsourcing firm does an error, they have to rectify it, without billing it in your costs. This would ensure that your firm tries to do the work in an error-free way. However, in case you want to amend/modify anything once your work is done, you may need to pay extra for it, a fact which you need to reckon before you sign the agreement.

Hence, with the plethora of firms offering outsourcing services, it would be advisable to stick to an established and prestigious firm, which may charge you a bit more than the market, but with your hourly rate arrangement, you can be assured, that you will get the most of your money spent.