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We’ve all been in the situation before:
You have at least a 12 month contract with a client, where you charge them monthly. This month, however, you spent the whole time waiting for them to approve things for you before you could implement them and move on to the next step. Because of their holdup, you didn’t do any work for them. The time has come to do your invoicing, do you charge them?
I’m really torn on what the best practice is for this situation, and I think there are arguments for whether or not you should charge them for that month.
3 Reasons Why You Should Charge Them
It’s their fault. You were in a perfect position to do a bunch of work for them, but they didn’t take advantage of it. Assuming you made it clear that they need to be able to turn things around quickly in order for everything to work well, you shouldn’t feel like you are being unethical by charging them. Especially if you frequently tried to get their attention.
You have a contract. In your contract it explains that they will be invoiced monthly for however long the contract is. It shouldn’t come to any surprise that they received another one.
You have a business to look out for. You have to be careful when you decide not to charge clients. You need to keep yourself in a position where you can be picky with who your clients are, and to do that, you need to collect the money that people owe you.
3 Reasons Why You Shouldn’t Charge Them
You didn’t do any work. What are you charging them for? They didn’t take up any extra time of yours (except for the nagging), so should you be able to charge them for work that wasn’t completed?
Your reputation. You have a reputation to protect. How will it look if you charge them and they get very upset and start spreading word that your business practices are unethical?
Keeping the customer satisfied. What’s worse than missing out on one payment? Missing out on all of the others. If the customer feels ripped off because you charged them, there is a chance they might cancel the contract all together.
This is a really important decision you need to make. On the one hand, you can always extend their contract an extra month. On the other hand, you have expenses that month that need to be taken care of, and it isn’t always as easy as it sounds to not collect a couple thousand dollars.
Whether or not you agree a web marketing contract should be laid out like this, which do you think is the right answer?
{ 10 comments }
Hi Taylor, you are in a tough position that I have been in before. What I did was charge the client according to the schedule. I felt that making any exception in the schedule of the contract would set a bad precedent so I chose to move ahead and charge them. This way there was never a breach in the contract on my behalf.
Ultimately once the contract was officially over I extended my services to make up for the lost time but I did this because their delays were understandable and I felt the investment in the client was worthwhile.
I hope that helps.
If this sort of thing arises a lot then it might be worth noting very explicitly in the contract, that if this sort of situation arises they still have to pay you. As well as reiterating that on the phone to them so the client understands ahead of time.
@Ross Dunn - I think that is a good point, and it allows you to do two things: collect your money and keep your client satisfied. It is a really tough situation that I have been in before and seen many others, too. Thanks for the advice!
@Brian Chappell - That’s also a good idea, and even if it doesn’t happen a lot, it might still be in your best interest to include it in the contract. It seems like no matter how much you tell them that you need their help, they always forget a month or two into the project. Thanks Brian!
In 99% of cases I will send the invoice.
The only time I don’t is if I know (and not just through their whining) that the company is having a tough time financially and my invoice might make the difference between them closing or staying open.
Of course, if I were currently in the same situation, then I would charge them. Feeding my kids comes before feeding their kids
“You didn’t do any work.”
But you did keep the time slot open for them, possibly turning down other income because they had reserved your time.
“Your reputation.”
But I did like Ross’ idea. Ultimately, keeping the customer satisfied is the goal that keeps meat on the table. You just have to make sure that what satisfies them isn’t taking advantage of you.
i do not believe that anyone worth listening to will slag you with “he billed us just like the contract said!! who’d have thought!”. if this worries you, make the contract a little more explicit.
“Keeping the customer satisfied.”
Ah, see - you haven’t sold hard enough - they should be ecstatic to have you
Hope it helps
Lea
I think the key here is #3 under why not to charge “Keeping the customer satisfied.” I thinkit goes beyond that, I would assume I am paying for the months no matter what, if I was called and told “Hey you know we weren’t able to get much down otgether this month, because of how buy you were. This one’s on me” That is a good phrase because it limits it to that onemonth and does not encourage them not getting back to you
@Lea Nice rebuttals for the reasons nice to charge. It seems like there is very little reason not to. You make a great point about them being ecstatic to have me.
@Ron Keeping the customer happy is a tough task, mostly when it comes to money. Thanks for the tip!
I would take the approach of sending the invoice as usual - after all you have a contract and they should be expecting the invoice.
If they pay without questioning you - great.
If they call and query it - you can always offer to either cancel the invoice (only do this if they seem very upset); or come to some arrangement - ideally I’d suggest spending double the time on the project this month - that way no one loses out.
I like that scenario, Hannah. It gives you the ideal situation, because (like you said) even if they do call and complain, you can still be the good guy and cancel the invoice if they are very upset.
I think it is really important to stand your ground and prove your worth.
What about if it’s your busy period that prevented work getting done? It’s happened to me and I’ve not billed them.
@Gab - I think the best thing you can do when it is your fault is to take responsibility and not charge, just like you said. I think it shows great character on your part.
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