Project Management

Justify charging clients drive time

Drive time costs could jeopardize your consultancy's profitability. Read tips on calculating and talking to clients about drive time charges.

Ancillary charges frustrate consumers; hence the uproar over surprise cell phone fees and debit card costs. For that reason, many technology consultancies (mine included) typically avoid charging for drive time. Depending upon the circumstances, you may wish to revisit that decision, however.

Drive time charges aren't just for plumbers anymore

Plumbers, electricians, HVAC firms, and other technicians levy "truck charges," "drive time," and even vague "materials" fees, as I was reminded following minor plumbing service this summer. Did it make me angry? Yes. Does that mean these extraneous charges are unwarranted? No. But smart service companies should work harder to explain such fees.

In the case of a simple plumbing repair, I was charged a truck fee and a materials charge, even though I provided the parts. Curious. I was so busy I didn't have time to dispute the invoice (which was almost doubled by these add-on expenses), but I will rethink which plumbing company I call the next time I need help.

Many ancillary charges are justified; for instance, few hesitate to question environmental disposal fees when changing their oil. The last thing, though, that technology consultants focused on delivering quality service to clients want to do is anger a client with silly or inane charges.

Therein lies the rub. Drive time charges aren't always inane; sometimes those ancillary fees are necessary.

A justified expense

Most firms aren't going to levy drive-time charges for clients located within 20 minutes or so of their office. Unfortunately, life isn't that cut and dried. What happens when a good client asks you to travel to a remote office two hours away? Or what if a one-time customer needs you to complete a complex project requiring several on-site visits 90 minutes away?

Depending upon the project, you may just eat those costs. However, there's nothing wrong with charging a client for the required drive time. The key is to be sure you discuss it with the client upfront, and you both agree on an arrangement that's fair.

Drive time costs add up

Some readers might think time spent driving is simply a cost of doing business, and in many cases that's true. Sometimes, though, the costs are very real and jeopardize a consultancy's profitability. To truly understand the costs your office incurs if it sends two technicians two hours away three times for one project, multiply the technicians' hourly rate times the amount of time they're on the road (which means they're unavailable to work for other clients). In the case of techs charging $125/hour, the opportunity costs for such a project reach $3,000 (four hours round trip times three trips times two technicians times $125/hour).

Thus, it's incumbent on tech firms that travel to capture those costs. Your best bet is to be upfront with clients and review drive time fees before they show up on an invoice. Avoiding surprises is almost always a good idea in business, but especially when it comes to billing practices.

Also read Chip Camden's IT Consultant post Billing clients for travel time.

About

Erik Eckel owns and operates two technology companies. As a managing partner with Louisville Geek, he works daily as an IT consultant to assist small businesses in overcoming technology challenges and maximizing IT investments. He is also president o...

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