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    7 Replies Latest reply on Feb 21, 2008 11:54 AM by Lighthouse24


    MYOB08 Adventurer


      I charge $100 per hour. In my terms of agreement all clients sign, I stipulate a minimum of 2 hours call out charge.
      If a client cancels with less then 24 hours notice should I charge them?


      What do you think would be a fair and reasonable charge?


      Do you have a cancellation policy for professional services that you would like to share with me here?


      Thank-you in advance for your input.
          LUCKIEST Guide
          08, Welcome to this web site. CANCELLATION POLICY Great question.
          In this day and age, almost everybody has a CANCELLATION POLICY.
          The Airlines overbook, we can NOT. Dentists try to overbook and charge for no shows.
          I am also a Quickbooks Consultant and like you stipulate a minimum of 2 hours.
          It is very hard to charge for a cancellation.
          *I tried Googling "*CANCELLATION POLICY and cancellation policy for professional services"
          No great answers. Hopefully other members will have some great suggestions.
            Ed O'Gee Adventurer
            You have to charge them and a good client would understand that. You apparently run a service based business, so anytime you block off time to be with one client, that is time you can't technically sell to another client.

            So yes if you charge $100 an hour a good cancellation fee would be about a 3rd of that or $35.
            1 of 1 people found this helpful
              Lighthouse24 Ranger

              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).
              1 of 1 people found this helpful
                • Re: CANCELLATION POLICY
                  MYOB08 Adventurer
                  I don't actually charge travelling or prep time, even though it is included in my terms of engagement, so when they cancel, when I am driving there I gues I could charge travel time.

                  I guess I want to train them not to cancel at short notice, but I don't want to put them off so maybe a travel / prep time fee is fair.

                  So are we in agreement $35 Travel Preparation Fee as a result of cancellation, with less than 1 hours notice?
                    • Re: CANCELLATION POLICY
                      Lighthouse24 Ranger

                      For a cancellation with less than an hour's notice, that seems very reasonable to me. One option for implementing this would be to consistently invoice a line item like "Preparation, loading, and travel" for $35, and invoice your first two hours of work (your minimum) at $165. When you do the work, you make the same money and clients pay the same ($200 for the first two hours). When a client cancels on short notice, however, it will be easier for you to justify -- and easier for a client's accountant or senior manager to understand -- a $35 charge for work you had already done on their behalf prior to arrival (because that's an amount you always bill for that line item). Best wishes.