End of a project and less time spent than quoted, so now what?

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MisterBigglesworth

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Howzit,

I have reached the end of a project and its taken me quicker than anticipated to finish it. I quoted X hrs and it came to RY amount based on my hourly rate. Im thinking I should just tell them I have finished sooner than the time I said it was going to take, therefore the amount they need to pay has been reduced.

What do you guys do in situations like these? Sure...I could just keep quiet...but that just doesn't feel right :wtf:
 
Have they paid you in full already? If not just invoice them for the time you've taken. Pretty sure you're honesty and prompt finalisation will go a lot further than the extra money.
 
Nope, havent received any cash yet. Ja recon Im gonna stick to my original thoughts on this...bill them for time I have actually worked ;) Feels right, and the business relationship will go a long way more than a couple extra grand...
 
Why did it take you less time?

If you bill them for less hours without an explanation as to why they will doubt any estimate you give them going forward.

The most important thing is to know why your estimate was off and how to get a better approximation next time, and explain that clearly to the client when presenting your reduced invoice.
 
so, what exactly do you mean by done? If you hand over the product to them are they going to try it out and come back to you with issues/minor changes etc. and if so how will you address those in terms of your time?

As someone else said you have to be able to explain why you have used less time than you quoted. Have you done a half assed job? Most likely not, but they might wonder.

If it were me, i would realise that your client has already commited to the spend. So rather than say "dont give me all the money you were going to give me because i estimated badly" perhaps offer them a choice to get more value out of your work. So:

I have finished early because x went faster/was less complicated/whatever than i expected so now I can:

a) Invoice you for my time, and save you some money
b) Utilise the remaining hours to provide you with added functionality

Something along the lines of b) sounds good to me, because everyone is a winner. Your client gets more than they were expecting, and you get more money. Win win. option a means they win. You lose an element of your pipeline :)
 
CrazyFig said:
Howzit,

I have reached the end of a project and its taken me quicker than anticipated to finish it. I quoted X hrs and it came to RY amount based on my hourly rate. Im thinking I should just tell them I have finished sooner than the time I said it was going to take, therefore the amount they need to pay has been reduced.

What do you guys do in situations like these? Sure...I could just keep quiet...but that just doesn't feel right :wtf:
Click to expand...

Bill them for the actual hours. Anything else is theft
 
Yep...done done. Came in lower because of a misunderstanding/break in communication...so I quoted on what I thought was needed only to discover recently I didnt actually need to do another part I was going to (was out of scope-gotta love scope creep).

Should have probed more...but ja, its all good. Everyone is happy...thats all that matters ;)
 
I have another suggestion. Tell them that you have worked less, but if they want, they can pay you the full amount and you will keep the money for when they need you again for a future project. Explain that you will still quote them for the next job and if it exceeds the amount still on "credit" with you, they only have to pay the difference.

This will allow you to:

1. Have them hooked as they might as well use you again next time (repeat work)
2. Take them money, have it invested somewhere and gain interest (depending on the amount)
3. Further your relationship with the team as it gives you a good excuse to visit / phone them for more work.
 
creeper said:
I have another suggestion. Tell them that you have worked less, but if they want, they can pay you the full amount and you will keep the money for when they need you again for a future project. Explain that you will still quote them for the next job and if it exceeds the amount still on "credit" with you, they only have to pay the difference.

This will allow you to:

1. Have them hooked as they might as well use you again next time (repeat work)
2. Take them money, have it invested somewhere and gain interest (depending on the amount)
3. Further your relationship with the team as it gives you a good excuse to visit / phone them for more work.
Click to expand...

This is possibly the worst advice I have read in a long time. You don't run a company do you?

OP, good call.
 
shogun said:
This is possibly the worst advice I have read in a long time. You don't run a company do you?

OP, good call.
Click to expand...

Hehe. Our opinions may differ, but I've seen it work successfully. The chances of it working is slim that they will buy into the idea.

PS. Yes, I have a business and the most difficult thing is to get money from your clients. So, if you have the potential of getting a "container", hell, way not.
 
CrazyFig said:
Howzit,

I have reached the end of a project and its taken me quicker than anticipated to finish it. I quoted X hrs and it came to RY amount based on my hourly rate. Im thinking I should just tell them I have finished sooner than the time I said it was going to take, therefore the amount they need to pay has been reduced.

What do you guys do in situations like these? Sure...I could just keep quiet...but that just doesn't feel right :wtf:
Click to expand...

What percentage of the quoted time did you complete the project in?
 
creeper said:
Hehe. Our opinions may differ, but I've seen it work successfully. The chances of it working is slim that they will buy into the idea.

PS. Yes, I have a business and the most difficult thing is to get money from your clients. So, if you have the potential of getting a "container", hell, way not.
Click to expand...

"Container"??? You mean "retainer".
 
shogun said:
This is possibly the worst advice I have read in a long time. You don't run a company do you?

OP, good call.
Click to expand...

And you run what? A small shop? Or something bigger? You seem to have an incredibly simplex view on business, no offence.

What he has stated is actually a common practise in business, and larger enterprise. Services are always being scrutinised and refuted and its common for a company to allow for credit on the "next" project. Noone is saying that this has to be accepted by the client or customer, but its a pretty easy compromise to make when there are good relationships between provider/client. R10 earned today is worth more than R10 earned next week.
 
Thanks for replies guys. Integrating with another system, so testing there will prob take up some time too...but at the end of the day it will be about 70% of what I quoted ;)
 
creeper said:
Hehe. Our opinions may differ, but I've seen it work successfully. The chances of it working is slim that they will buy into the idea.

PS. Yes, I have a business and the most difficult thing is to get money from your clients. So, if you have the potential of getting a "container", hell, way not.
Click to expand...

Yeah they differ a bit (possibly sounded a bit harsh earlier.. apologies). I definitely know the feeling of trying to get money from clients.

My reasoning is as follow:

The money has not changed hands yet... so effectively you are asking them if you can over-charge them now. You have nothing to back this up with but "hey, you're pre-paying on the next project", which may not ever come to pass. No company in their right mind pays out for work that isn't even scheduled yet. "R5 in my pocket is better than R5 in yours" scenario. They have no benefit in being tied to you for work not even decided on.

On the flip side as well... why would you want that money now? To spend it? If you do, and they decide they want a refund because they would prefer not to do further business then it may affect your cash flow, unless you keep the money unspent. If that's the case, then why ask for it now? To earn interest? If it's a few thousand, then what's the point?

If you want a retainer.. then that's a completely different animal and will require monthly payments and an equivalent amount of work done... in which case it does not fit this situation at all.

Then of course there is the good will in saying "Hey, it's actually going to be done cheaper and quicker than expected... lucky you". When we hear this, we immediately know the supplier is acting in good faith, not trying to stuff us around, and will definitely consider doing future business. If they turned around and told us that they finished under budget, but wanted to keep the full amount, I'd be concerned about 1) Their financial stability 2) Their ethics.

Markd said:
And you run what? A small shop? Or something bigger? You seem to have an incredibly simplex view on business, no offence.

What he has stated is actually a common practise in business, and larger enterprise. Services are always being scrutinised and refuted and its common for a company to allow for credit on the "next" project. Noone is saying that this has to be accepted by the client or customer, but its a pretty easy compromise to make when there are good relationships between provider/client. R10 earned today is worth more than R10 earned next week.
Click to expand...

^ See above

I'm so sick of the "screw them for every dime... lock them in... take it all" kind of mentality. But hey that's just me... clearly I'm a dunce when it comes to business.

When there is a good, well established, regular set of projects then sure, things like this can happen (if the money has already changed hands), but why when you haven't invoiced yet? Because you are too lazy to adjust the invoice? Even in complicated contracts it makes no sense unless the money has already changed hands.

You don't need to make business complicated to make it successful. I like my "simplex" view.
 
Usually I gave my clients a choice up front when quoting. Time-and-material or Fixed price. If they chose the first option, I gave them an estimate, but they only pay for the hours I've worked, but if I worked longer than expected, they had to pay for that as well.
For the fixed quote, I don't even provide them with the hours (in either the quote or the invoice). They pay the fixed amount regardless of the number of hours I've worked. I've found though that probably most of my clients prefer the latter option anyway, even though it is more expensive due to the larger contingency amount added. (they probably had some bad experiences with other consultants in the past)

I suppose in your case, you should ask yourself the question, if you made a mistake and the job took much longer than you expected, would you have gone back to them and charged for the extra hours?
 
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