With billable hours, you are choosing an hourly rate for your work. You may set up payments at certain milestones in the project or at the end of the project. All these details should be worked out in the contract before you begin the project. Also give a fair estimate of the hours you will need for the project.
Additional Hours and Tracking
You should also let the company know how many extra hours can be handled and realize that clients will generally want to approve any overtime hours. Clients should also be informed about what is classified as a "billable hour." Are phone calls, drive time, and other miscellaneous time included? Let the client know up front or risk losing a client.
To find out more about hourly billing and tracking, read the full article (link above).
Added by Computer Consulting 101 Professional Kit