My client doesn't want to pay for going over budget stating that I was unclear... was I?
Prior to beginning a specific design project I submitted a proposal to my client for her review and approval. It clearly specified the projected budget and terms. "Three concepts of the logo will be supplied to the client with-in 7-14 business days upon agreement of the design brief and receipt of 50% deposit. The intent is to narrow the concepts down to one with minor changes. If the client does not see what they like, and additional concept will be supplied based on their feedback. Client may request additional concepts beyond this. Please note that additional concepts and changes will incur an hourly fee of ..." When they used up their concepts and prior to beginning additional work, I let them know that they have gone outside the scope of the design brief. They said ok. I went through one more round of changes and they again requested more. At that point I mentioned that they already have gone 3 hours past their budget and asked how many hours did they feel comfortable going outside their budget. I didn't want any surprises. My client said that they didn't think that they went over their budget and that I wasn't clear about that and should have been. They asked me to give them a break since I wasn't clear. How should I handle this since I thought I was very clear? And how could I have been clearer so that I could avoid something like this in the future?
It sounds like you were very clear with your policy within your proposal, however I noticed that when you mentioned to your client that they were out of scope of the design brief, and at that time I would have also mentioned the status of their budget (over/under/right at the budget). We make it a practice to always let our clients know when their funds are running low, "before" they go over budget as well as keep up a consistent billing method with the balance so that they are not "surprised" at least monthly or weekly (depending upon how often that you are working hourly/daily or per project)for them.
This does create more accounting work on our end, but its worth it. At that point we let them make the decision as well as decide on the funding extra's that they need or want to make. Often, when they see a running bill/balance they will make decisions based on knowing ahead of time where they stand as it pertains to their budget.
Communication is key not only up front with the proposal, but throughout the engagement. I would give them the break this time for the reasons mentioned above and continue to communicate the status. As a client of our lawyer, accountant, etc. we always ask them for a running balance of our retainer (to them)for our business as we do have a budget for costs for them as well. Therefore we do the same with our clients. No one likes surprises when it comes to being over budget.
I would stick to the agreement they signed and insist that they pay you for your time. You could also cut it in half if you want to meet them half way. I fear this client is taking advantage of you or trying to take advantage of you...
yes it is a problem but if you are expert in your field and your reputation in the market is good than with little argue client pay extra money because they are satisfied that this plan bring more business o no problem if i pay little more ,but key is your good work and reputation in the market
Always make up Change Orders (i.e. additional SOW or statement of work) to cover anything that is beyond what was detailed in any original contract
Get them to sign each CO before you start the work.
Always reference the Contract so your basic terms and conditions extend to each CO..
You have gotten some good process advice from others.
However, the root problem might be that no matter what you do they are not going to be satisfied. Sometimes it is best to cut and run before you waste any more time. He have been sufficiently clear. I think you are dealing with someone who is not the kind of person you want to do business with.
i am a little confused with specification you gave your client. Perhaps the client needed to know clearly that the charge for extra will be after the 14 days. Also you may need to put a limit to the number of designs they would need to choose from before being charged for extra.
From my experience as a project manager, I have found that the simpler the better. Make your specifications simple so that there will not be any misinterpretation.
First of all I think we need to establish who 'they' is/are. As a project manager were you personally in charge of the contact points and agreements or did you assign it to someone within your company?
Did you deal with one person/office?
Do you have documented days and instances where the extensions on the hours were agreed that you can produce to the client?
Did you do your due diligence before taking up the job, it is often good to know what kind of client you are dealing with so that when making your budget you can include contingency provisions for extensions/abrupt adjustments even if from your own reserves.(manpower, resource pool and economies of scale, contacts and goodwill)
If everything was above board and the client has signed the project execution agreement then bill the client for the extra hours and take it up from there. The client has asked you to give them a break, meaning the job/project may be in review. You may just get to finish up on the current job but if you have a contract in place, let the client be the first to terminate the contract so that should you go legal you can argue you did not act in bad faith.
It is also not good for your brand should you be the first to terminate. Give them time and look for the guy who signs the cheque, or the guy in charge of the guy who signs the cheque. They may have bad news for you about the job but at least you will have time to cut your losses should a negative answer be in the offing!
This is very tough..."Design failures" is what your business and relationships are all about...I think you should try to clear the air and go from there...Especially if you want to keep the client...Clients usually will work with you if the Trust bond is established...evidently here not so sure it has been or been broken
Great advice below and it comes down to - communicate clearly, proactively and consistently from start to finish with reviews, sign offs and agreements...oh, and monies up front and before materials are turned over.
Though I also noted below...I smell a huge red flag here from this customer, not only on this project, but any future project they may offer you. And, not all money is good money. Consider it seriously.
For my projects I state "up to 3 designs." I supply one design then we have a discussion about what they like about it and what they don't. This gives me the information I need to hone in on the solution they need. It also avoids Frankensteining, "I like the type from this one and the image from that one so just smash them together and we are there."
I rarely get past the second design without approval. I also allow up to 3 rounds of minor revisions per design. Color tweaking etc.
Once we get to a point where it is out of scope and there is definitely a ways to go on the project I will speak to them and tell them that we are out of scope, what this means and what my hourly rate is. Once I have a verbal commitment to go forward I will send a confirming email. "as per our conversation this afternoon 12/112014 I am confirming your understanding that we are now operating out of scope..." and stipulate the conditions including a cap on the amount of overage approved.
I occasionally have clients who for one reason or another move out of scope. I use my judgement though before moving out of scope. If it is close to finalizing the project I will just wrap it up.
I hope this helps.
i don't think clarity is the real issue here. Agreement IS. When I enter a contract with someone to do some work I ALWAYS get their agreement on the terms of the contract BEFORE we start. I check if it is clear to them and they agree to it and this agreement is usually in writing. This BEFORE the contyract is commenced.
This would include any modifications that later may be needed.
Checking for clarity after the event is fraught with danger. Make sure all parties agree to the scope of the contract or brief. first.
And include that any additional work will incur additional costs.
Have everything documented as you go along. Get their signature on the items that state changes will incur additional hourly fee. Getting signatures on important milestones and notices is a great way to "make it clear to them" such that they can not say that you didn't tell them.
Another recommendation is to ask them to paraphrase exactly what you just told them. Having them state the information in their own words shows you what they think they heard. This gives you an opportunity to correct their understanding. Having the listener restate what you just said is the only way to verify that what you said is what they heard.
AS a small business owner, I have dealt with this situation many times in the past - unfortunately, this will lead to only one of two conclusions: 1) the client will agree that you were clear and pay for the overage or 2) you will end up having to take them to small claims court.
The first thing to do in this situation is to document all of your communications with your client. Send them a letter clearly outlining all of your communications and if you have any of it in email, include copies of the emails with the relevant texts highlighted. Then, include a copy of your original contract/proposal to the client. BTW, did you have the client sign anything agreeing to your terms? If you end up in small claims court, having their signature on a document really helps your case.
Once you have presented the chronology to your client, stop doing any work until they either agree to pay the overage fees, or the situation is otherwise resolved. Also, DO NOT provide them with any of your additional work. If you do, they have no incentive to pay you for the work you have already done.
If the client does not agree to the overages, then you really won't have any choice but to take them to small claims court if you wish to be paid. Fortunately, if you've documented all of your communications with your client, then you'll already have all the documents you need to present to the judge at court.
I believe its them, not you. The person you were talking to was loving the process but paying no attention to the expense. When the reality (like an invoice) hit, then they backpedaled on you.
Also, I am concerned that they will never pay you the additional 50% let alone the overage. Its one thing to forgive the overtime, just get the payment on the other 50% now.
Victtria, in this case, you can deal with your client a set of hours to additional features. Furthermore in the future, this set of hours for additional features can be included in the proposal and/or when the client ask for additional feature you can say ok, we will spend X hours, so please pay now because this is not in the scope of the project.
For this first you make your solid reputation , before any one come he feel he is going in good place where he get 100 percent result once you achieve this than your problem get solved
Victtria, I agree with what Ed, Jeff, Fred, Corey and both Marks said, although I don’t insist on having a written outline of the initial discussion signed by the client. The client should see the outline, however, and be invited to comment on it or suggest changes. I wish to add that whether you sever the relationship with your client and take steps to protect your intellectual property rights or write off the three hours’ worth of fees will depend on how valuable their business can ultimately be to you as opposed to the value of your logo design and copyright. If you explain that you're willing to forego billing for three hours but that future understandings involving billing will need to be documented (and perhaps signed by both parties), your client may willingly agree. That will establish a better relationship and for you to be paid for all the time you spend on providing service to the client from now on.
I didn't used to make it a practice to document discussions with clients, but I started doing it with a new client recently. I sent her a signed letter, similar to a proposal but without stating specific charges for services I’d provide, that summarized what we initially discussed, point by point, and clearly described what most of my services are and how much I'd bill for each service. I was concerned that this would turn her off, but during our conversation she had stated her desire to switch to using me as her accountant rather than continuing to engage her present accountant. Thus I saw this approach as serving only to improve my posture with the client rather than detracting from it.
The client must approve our agreement as to the terms of our engagement, which will be in the form of an engagement letter, to be signed by her and me. This is a recommended practice for accountants. The client hasn't responded to the proposal letter but she had told me she'd be very busy this month. I'll follow up with her again early next month.
Incidentally, when I visited a dental school yesterday to discuss possible dental treatment with a student dentist, he gave me an electronic signature pad to sign my name on after explaining to me some of the school's policies like a 48-hour cancellation requirement. I didn’t mind signing my name as there was no financial commitment. That’s why I don’t require that a new client sign an outline prior to an agreement: it can be intimidating and may scare away the client.
Make sure to outline everything in a document and have them sign it before moving forward. This way, when there are issues, you can reference the information. Always leave a paper trail to reference when there are issues. You will always have clients that want to save money by acting like you did something wrong. That is normal. My advice would be to ask yourself how important this relationship is with this specific customer. Can they leave bad reviews about you or your company if you make them pay more. It seems you have made it clear to them but if they are adamant about not paying more, then you will have to compromise or not give them their product until they pay more. If you feel like your reputation depends on keeping this person happy, even a little, then I would suck it up, take the loss and make sure to document everything up front prior to performing any services in the future.
Above and beyond the initial scope of work and projections, we recommend that each step of a project be tracked. This includes actual costs against projections, etc. When a client makes changes, outside of the scope of work, we issue a "change order," in writing in which we detail the directed changes as well as any new costs. They must initial/sign the authorization to proceed before new work and resources are committed. We also log all communications, dates, times, etc. Where necessary we will issue a "memorandum to file" as a paper trail.
I recognize that this is both time and detail intensive. After the first two times of being burned and in the rare instances where we have had to go to court, the paper trail with signed change orders will be invaluable.
I agree with Mark, Ed and Mark. For the most part you were clear, but I believe you could have been clearer.
A. By using Mark Fackrell's advice of providing a follow up email or client report document.
B. By using a client approval form which requires a signature and date stating they accept as is or request modifications.
C. Don't make any changes or modifications without a signed "Change Order Request Form." It documents all the changes they are requesting to be made with a signature and date. Furthermore, don't do any new work until you estimate the number of hours it will take to perform (and make the changes). The estimate needs to be signed and dated along with a deposit.
Additionally, I believe your contract needs to read that the balance of the contract has to be paid in full upon presenting the 1st round of concepts to the client.
Handling this current situation, since they are playing hard ball, is to not supply them with any files whatsoever and immediately file for copyright. You have 3 months to file for copyright. If you don't do it in that time frame you are left unprotected with respect of the client using your work as their own and having no recourse.