Were this a commercial issue, I would not be address it here in my blog. Billing for work cancelled or delayed has very little to do with business. It has little impact on a consultant’s revenue. It is however a major component of trust, fairness and mutual respect.
I have put together my view on billing for work that was cancelled or delayed into a few statements of principle that have served me well in the 47 years that I have been an OD consultant.
- If the client himself does not sign a contract with me, but rather I need to negotiate my professional service with Purchasing or Supply Chain, I will always insist that all hours cancelled or delayed be paid in full for all work cancelled/delayed 4 days in advance. This is a matter of principle. The purchasing agent will maximize the clients’ commercial interests; I will maximalize mine.
- But let’s assume that I negotiate directly with the client. In the initial stages my work, I will not charge for work cancelled or delayed. My initial contract will only cover 2-3 months, usually “stage one” or whatever. During this time, I will document the revenue lost due to cancellations and delays. After the initial 2-3 months, I will talk with the client about what has happened. I will ask the client what he plans to do, either to reimburse me, take corrective action, both or tell me that “you should have factored that into your initial costs”. Then I will adjust my terms of the seond stage.
- When I travel abroad to work, the client will be billed for all work that is/was planned after I have taken off. There are no exceptions to this.
- Let’s say a meeting was supposed to start at 14.00 and starts at 14.20. If the meeting goes on for one hour, ie until 15.20, I bill for one hour and twenty minutes. If the meeting lasts till 15.00, the client is billed for one hour.
- All work cancelled the same day depends on the amount of time that I have been working with the client. Veteran clients are somewhat accommodated; new clients pay full fare. I do not close my eyes when clients cancel willy nilly on the day of my work. It may say something is very wrong with the relationship.
- As far as my being delayed or cancelling work, I am always at the client site 30 minutes early. I never cancel unless ill.
- Delays due to illness or security threats are never billed.
As relationships develop the quality of the relationship with the client replaces the contract, and financial damage due to delays and cancellations are solved more naturally in the framework of an ongoing mutually beneficial relationship.