Handling client extras on the fly

Question

I sell a B2B software that I developed which is customized for each client. I offer a maintenance agreement with the software that covers technical support, updates, etc. Most of my clients take the technical support but I have a couple who did not. So in theory, I would bill them hourly for anything they have me do.

One particularly cost conscious client has me submimt estimates that their CFO must approve before they have me do any little thing. Right now I am working on an upgrade for them which has a flat fee.

So a few times, their in-house support staff has called me with questions. Sometimes they are reporting bugs in my programming. But sometimes the conversation turns to where I am giving them training and helping them troubleshoot things other than my software on their system. Today I spent over an hour on the phone with them and 75% of that time was dedicated to fixing their mistakes/questions.

Now I am in a quandary. Do I bill for this time? I don't want to get the help desk people in trouble for using my services without getting it cleared in advance. But I also don't feel it's fair to all my clients who happily spring for the maintenance agreement that I'm giving free support to a company that won't.

When people email me for stuff I always say "that will be $x" if it comes with a price. But when I am on the phone with them, I felt too awkward to say "By the way, I will bill for this time."

When I have new clients I do say in my agreement that I'll bill for this type of thing but I am aware that the people picking the phone up and calling me are not necessarily in communication with the people signing my agreement.

Do any of you face this type of thing? Do you assume they just assume you'll bill for your time? Is it normal business to say "by the way I'm billing for this" or is that bad business etiquette?

Answer 1

Personally, when I have a contractual agreement with a company, signed from the legal representative of the whole company as a single entity, I assume that every request coming from it is regulated in the contract.

So for every call and request that comes from any company office I assume that the caller asked to the boss or the supervisor for permission since I'm going to bill each request that takes more than 15 minutes.

If you have the flat rate for the support it's ok, otherwise put in the contract that each request is going to be billed with an hourly rate Of $x.

Sometimes happened to me that in some complicated case, I agreed with the company to have a single person reference and I could discuss and get requests only from this authorised person.

Answer 2

I once had a client that I did a great deal of smaller items for. I primarily dealt with 2 or 3 individuals at the company and they were organized and thorough in their requests.

As the their company grew, more people were hired on and then delegated to do various tasks. It was clear to me that at some point someone said "Contact this guy.. he handles that for us." Without much further explanation.

Change requests for small, piecemeal items started filtering in from a couple new people, no big deal. Client is in good standing, they work for the client, someone clearly provided them with my contact information. It's only natural to assume I'd be paid. I completed the work and invoiced for the time.

Invoice went unpaid and was hitting the 30 day limit.

It just so happens that around that time I got another call asking for something small again. During that call I asked the person if there was an issue paying for the previous changes they had requested since the invoice is approaching 30 days past due.

The response was "Oh, you charge us for this stuff?"

Now, it's not my fault that the our business relationship was not fully explained to this employee. It's not my fault if they are calling me and requesting work be done without the proper approval. All I know is I get a call from someone at an existing client's company asking for work to be completed. It's perfectly natural to assume the client is going to pay for work they are requesting from me.

I literally had to state:

You should assume when you call with a request for me to complete something that it is billable.

I then called the original person I dealt with at the company and explained voicing concern that employees were contacting me to complete work, I have a current outstanding invoice, and I just had a conversation with XXXX who seemed unaware that I bill for my work.

Things were sorted quickly, I was paid, the "piecemeal" calls stopped coming in and I only get requests for more substantial projects.

My advice, when someone new contacts you from company X that you've never dealt with before, and they are requesting something you traditionally bill for, state it up front.

I'm happy to do XXXX for you. I just want to verify with you that you are aware that this is billable time, correct?

It's simple, to the point, and avoids any confusion.

There's no harm in being clear and up front on the phone. Some people just don't realize there is a cost for the company involved. While they should have approval before incurring any costs, they don't always realize they need it. Reminding them to "check with the boss first" only saves them from that reprimand later when your invoice arrives and the client has to track down who incurred your costs. So really, you're doing them a favor by pointing it out.

My direct advice would be to call your primary contact and have a conversation with them. If necessary, get a list of approved employees that you can work with while any others are not permitted to incur any costs.

Answer 3

It shouldn't be free and in fact, it's probably the client who encouraged the employees to contact you. And your expertise also has a value.

Most companies that offer a maintenance service will charge for this and it can be used however the client wants it; in this case, to train his employees.

You can tell the client upfront about the billable communication but you can also simply add this time to the invoice under the label "communication" or something. Next time they'll receive the invoice, they'll probably ask you about it and then you can mention that "your timer" for this starts after xx minutes. You will let the client deal with the responsibility to tell his own employees about this. It's not your job to manage them and put yourself in that delicate position.

If you ever used the services of a lawyer, that's exactly how they do it and you usually realize this after getting the invoice!

Regarding the phone conversation and feeling uncomfortable with telling them it will be chargeable, you can still simply bill for that time OR you can simply tell them that you will get back to them; then you can write to them or the client by email instead if it's easier for you. That can also give you the opportunity to contact the client and ask if he wouldn't be interested in some maintenance upgrade since you got some calls from his employees. If you're not sure what mindset you should have when doing this, imagine yourself and your client as 2 adult parents, and his employees are his kids; you don't discipline others' kids but you can have a word with their parents though ;)

Since you're doing the project for a flat fee, you can simply send an invoice with that time at the end of the week; they'll ask you about it and you will have the opportunity to offer them a maintenance agreement. They will probably resist paying it, and that's alright; for you it's just a way to make sure things are clear without feeling like justifying yourself. As a response, you don't need to force them to pay it, that invoice is a warning in fact, and you can simply tell the client "It's alright for this time, I'll give you these hours for free." After this, they'll either buy your maintenance service or they'll stop calling you.

Personally, I request to deal only with one person, the client knows this before starting a project and I explain the reasons why (eg. lot more communication, lot more management for me, etc.) But if the whole team contacts me, I'm alright with this, I start my timer and I take care of their requests! Usually the client ends up taking the decision to manage these communications himself and I don't need to "discipline" anyone.