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If the services I'm providing involve "preparation time" on my part, or if I will incur any travel or communication expenses prior to performing a service, I explain all that up front and spell out the applicable charges (including when the client will incur those charges). The client is then responsible for that amount (and only that amount) if they cancel after that point. That approach is easy for clients to understand, plus their accounting departments, managers, and auditors will readily sign-off and pay the invoice for an agreed-upon "prep fee" or other direct cost -- whereas the bill for a "cancellation charge" (or, worse yet, two-hours of services that were never provided) can get hung up at about seven different levels of an organization.

So what if the service requires no billable prep work, travel, or direct communication costs? Then the client can cancel any time without cost or obligation. Yes, as Ed noted, I had blocked off time for that client, but there are plenty of worthwhile things to do with that time instead -- I can get ahead on a future project, coach an employee, donate a couple of hours to a non-profit, or even answer some questions here. The objective is to make it easier for the client to do business with me, not harder -- and charging a cancellation fee or billing the client for services that were not actually performed would make it harder in my view (and most likely cause me to lose any future work for that client).