Change Order Billing

[glorybound]

I thought I would take this question to some of the best people in the business. Clients changing things way late in the game has become very problematic. Today, after three late set of changes this weekend, I get some more changes they want to see. With this one, I replied to yesterday's changes, saying that this will be the third set of finals and I am going to put the project on hold until they give the go ahead that there will be no more changes. They said, there will be no more changes, but surprise, this morning changes. Are you guys charging for these things? I always email them telling them that it is chargeable. However, I always wave the charge. Another project the gray-scale was approved, however, the architect made some major changes, so they were given to me like I am their CAD Tech. How often do you guys create change orders and actually charge for it? Like a lot of trades, this is where the money is at, so I might be missing out.

[Neilg]

last time you asked this I gave a pretty thorough breakdown of how it's laid out in our contracts.

when getting changes that go beyond the contract scope, you reply to them and say 'this is beyond the scope agreed to in my fees. i can do these changes at the hourly rate mentioned in the contract, I estimate they will take x hours and cost x dollars, let me know if you would still like to proceed with the changes'
and then anything other than an explicit yes is a no.

[glorybound]

Yes, but do you follow through with it or do you forgive the fee? Basically, I tell them that the change will accrue a fee, but I do it without charging. Most of my project would have pretty hefty change order fees and I am always afraid, after the project, they would think that the process was just too expensive. I always do the project for what was qouted and agreed upon. It seems that this is what they expect, anyway.

[glorybound]

I just sent off some gray-scales for a project that had major redesign changes, after I already completed the gray-scale phase. I finished the model, sent off the gray-scale, which was approved. Then, my client's architect sent new drawings with some big changes. Would you charge for those changes? Or, do you initially charge enough expecting these kinds of things?

[dlparisi]

I just sent off some gray-scales for a project that had major redesign changes, after I already completed the gray-scale phase. I finished the model, sent off the gray-scale, which was approved. Then, my client's architect sent new drawings with some big changes. Would you charge for those changes? Or, do you initially charge enough expecting these kinds of things?

That's clearly an extra.

[Neilg]

Yes, but do you follow through with it or do you forgive the fee?

Why wouldnt you? You email back to changes telling them how much it's going to cost to do, but then do them for free?

if you 'feel bad' for billing what you told them you would and always give them a discount without being asked then i'm not sure why you're asking the question.

[glorybound]

Per hour, I am assuming.

I am reading a freelance book and they mention how fast the freelance adoption rate is rising. In the next 5 years, 2/3 of the American job market will be freelancers. For many of my clients, contracting a freelancer is a new thing, but it looks like that will soon change. Many of my clients act like I have skin in the game and they just keep sending changes, as if I am a salaried employee, or my fee is for an image, no matter what it takes to get there. I have a good contract that spells everything out, but they obviously don't read it.

Like spending a few hundred bucks a month for an accountant, it seems like freelance project managers might become a need. I would love for a project manager to handle my projects. I bet the money they charge for these changes will more than cover their cost.

[glorybound]

I would rather forgive a debt than to not charge at all if that makes sense. However, this is a business, so I want to get a feel what is normal. If most people bill, then okay, but if most people just make the changes, then it would be nice to know. Some of these projects would double in price if I were to charge for after the fact changes. I know contractors make their money with change orders. Is the consensus that any changes to the original agreement is billed?

Why wouldnt you? You email back to changes telling them how much it's going to cost to do, but then do them for free?

if you 'feel bad' for billing what you told them you would and always give them a discount without being asked then i'm not sure why you're asking the question.

[Morbid Angel]

It really depends though Bobby. In this business everyone wants to make money not lose money. Trust me, when clients don't want to pay, or want a lot more for what the budget is, some one will lose money. It should not be you. If you keep taking jobs and losing money, you know what will happen in the end. I always charge clients extra, and always clear about what the budget covers. And I always have clients ask for more then the budget is, its a constant battle.

[glorybound]

That helps. I just don't want to be known as the guy that always runs the bill up.

[crazy homeless guy]

Your client won't be surprised by a change order even if they act like they are. They are in business and it is a regular part of business. Always bill even if it is just a few hours of work unless you agreed otherwise before starting the project. Just make sure you let them know at the time of the request.

Even if you don't bill I would at least send them an invoice with the actual fee and additional hours on it, and then put amount owed $0 and make a note that the fee for this was waived in this instance. Then when it comes up again they know what to expect.

As a side note.. If you do a project at a reduced rate you should send the bill at the full rate and then add a line above the total that reduced by X percentage and make a note of it. Otherwise they will always expect your reduced percentage.

[glorybound]

Good advice!

[andybot_cg]

when getting changes that go beyond the contract scope, you reply to them and say 'this is beyond the scope agreed to in my fees. i can do these changes at the hourly rate mentioned in the contract, I estimate they will take x hours and cost x dollars, let me know if you would still like to proceed with the changes'
and then anything other than an explicit yes is a no.

Exactly this. As long as you tell them up-front before you proceed that the additional work will be billed, then it is up to them to agree to it. I usually give an estimate of how many more hours something will take before I start, so it's usually crystal clear what to expect. And then I bill it, period.

Andy

[VelvetElvis]

Remember, you are not the one running the bill up. They are. Next time you are at an expensive restaurant, try getting them to throw the steak in with the price of a salad because in the end it's all food right?

[glorybound]

Yes, and I do remember this video

Remember, you are not the one running the bill up. They are. Next time you are at an expensive restaurant, try getting them to throw the steak in with the price of a salad because in the end it's all food right?