Of projects, payment and planning

In business, it’s often the basics that we get snagged up on. I’m a web designer first and foremost and a businessman second. But it’s the criticality of your business that can usurp your day-to-day plans, throwing your future into doubt. A good example would be billing clients — but it needn’t be that way.

A while ago, I had to write out a set of terms & conditions. In all the years I’d been in business (Octane celebrated it’s tenth birthday in June), I’d not given serious thought to such things, largely because there’d never been a real need. But one particular client project changed all of that.

Even though the final stage of the project had been demonstrably complete, the client insisted on additional unscheduled activities being complete first before the final invoice being issued.

When the final invoice was issued, they were shocked by the cost. But why? Because these additional activities weren’t planned for, within the scope of the project, I was essentially supplying estimates on a daily basis. So over time, the client had lost track of the amount of work they had requested.

What we had was a classic case of “mission creep“, where a project has expanded beyond its original goals, often after initial successes.

I’d always been mindful to invoice as often as a project would allow, for two reasons:

  1. to mitigate cash flow problems, and;
  2. to fend off the damage delayed or none payment can cause.

Mitigating the cost of “mission creep”

Well, this one client project made me think again about this policy. As a rule, I have invoice breakpoints, which can be better explained by quoting straight from my terms & conditions:

“Our standard practice is to divide projects into separate stages, with each stage being billable. However, stages may be billed prior to an agreed milestone if the cost of the stage exceeds £2,000.00 or a cost breakpoint previously agreed between the client and Octane Interactive Limited is met.”

This way, we limit the prospect of any one stage within a project running on further than it should. And because we agree these terms & conditions up front, me using this condition as a fall back later within the project shouldn’t come as an unwelcome surprise to the client.

The other advantage to billing often is that you give your client a clear insight into just how much each stage of a project costs, and how much of a commitment of work that stage of the project is / was.

By encouraging your client to pay in stages, they’re making a major financial commitment, which then helps them to work towards completing a project with you, rather than just abandoning it and walking away, owing thousands, thinking that they have no financial liability.

Once a client is happy that the progress you’ve made is consistent with the agreed stage, they’re endorsing your progress with a financial seal of approval.

Because of what I do, it’s often very easy to demonstrate to a client the progress being made. I can often grant them access to any given website or web application during the various stages of its development.

In fact, I often encourage clients to begin using a website or web application (even if only for internal purposes), to trigger feedback, and for them to become comfortable with their project.

I’m sure you can find similar examples within your own work process.

In this current economic climate, it’s imperative that we all work together and not apart. For my part, I’m actively working on innovative web applications than can help my clients save money during the recession.

Hopefully, this advice may help you start a new conversation with your clients that could help stave off financial problems in the future…

2 Responses to “Of projects, payment and planning”

  1. Well I must say that this is true. Businesses do thrive on their income and with companies like website design, do have these problems. I’ve had my fair share of experiences and make sure that my accountant keeps me informed of all expenses, incomes and I keep him involved with the projects so that he can produce regular invoices to avoid such problems.

    Wisteria Formations offers financial help for businesses that are starting up. It’s good to cover these grey areas before problems arise.

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