Monday, October 22, 2012

PSMJ Tips: 11 Reasons to Charge More for Changes

If clients are assessed a markup on every change that they make, they will be deterred from making too many. Here are 11 reasons why you should mark up changes, making use of a standard, firm-wide percentage:

1. Tell clients up front that no project is ever without an extra change. Your clients should include a contingency for these in their financial plans.

2. Project managers should regularly review their contracts and projects to determine that the firm has not inadvertently exceeded the contractual obligations. 

3. Always tell a client when you are doing something outside the scope of work, even if you are willing to include that item in your current fee arrangement. If you don’t plan to charge for that change, tell the client of its dollar impact anyway. Leave the door open by stating you are not going to charge “right now,” but that you might need to come back for additional compensation if conditions change. 

4. Inform the client in writing of every change in scope, whether or not it will be chargeable or not. Reference the extra work as subject to the terms in your contract. This may be important for professional liability reasons.

5. In the pre-project meeting, carefully review the scope of work. Make sure the client knows what is not included, especially if it is an exception to normal procedures. 

6. Help avoid disputes by developing a scope checklist and reviewing it with the client. Quantify as many scope items as possible. 

7. When you must bill for an extra or a change, bill promptly and at rates that deliver a profit by themselves. 

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