Discussion on:

Deciding who pays for a client-related expense

Psychological therapy.........$180

And now that 122 Bar and Restaurant burned down, that rate might have to go up since the therapist will have to find a new place to get drunk after the session is over...

re the passing comment about employment status: there are Revenue-determined rules in the UK too and UK consultants can check via the online status checker at http://www.hmrc.gov.uk/calcs/esi.htm

In my travels for a client, I charge the government per diem, hotel, and mileage reimbursement rates (and declare that in my contract) unless something higher has been included in the contract.

Chip -

Good topic. All your comments are valid if kept in the context of how you choose to run your consulting practice. For my practice, my clients pay for everything that is germane to the engagement and all of it is negotiated up front. I've had engagements where I've billed for all travel - local or otherwise as well as temporary office space and equipment. For others, the rates have been all inclusive.

Given a preference I prefer to bill separately for all "incidental" expenses, and if they require considerable administrative work (added reporting requirements, potentially large carrying costs, etc.) then negotiating a handling charge to compensate for the added bookkeeping effort. This is also a negotiating point for payment frequency and late payment penalties as I am operating a consultancy, not a bank.

For relatively local onsite visits, I never bill customers for trip charges, even though many in my area (Pittsburgh, PA) do so. Instead, I state up front that I charge a one-hour minimum for onsite visits. That makes the trip worth my time, and gives the customer an opportunity to make the most of the visit. For more outlying customers, I state a two-hour minimum up front, and they generally face a higher hourly rate than my more local customers. I'm happy to do two hours' work while I'm there though, because then it's worth the trip for both me and my customer. If I've completed the task for which they called me onsite before the minimum has passed, I make sure there's nothing else they need from me while I'm there, or just use the time to follow up with customers onsite, review system logs, etc.

Incidentally, phone calls are a half-hour minimum. In addition to the documentation required, they're also either taking time away from another customer, or away from my personal time. In either case, it's an interruption of some other activity. It also makes the customer consider the consequence of their call. If it's not important enough to justify the charge, it can wait.

I have a 2 hr minimum if I come out, but there is rarely a need for that if a client has allowed rdp setup. When the gas went over $3 I billed extra 1/2 hr on appts over 20 mi. Never have had any issues with the charges from the clients.

Chip, I do like what you say about the re-use of stuff. If I use somehting for more than one customer, then it really is my expense. If it is something particular for one customer, then I am inclined to bill that customer for the expense unless I absolutely know that I am going to reuse that item.

For me with travel time, it's a 1.5 hour minimum for an on-site visit. That includes up to an hour of labor and 30 minutes travel. I only "bill" for the trip one-way. That comes from the days when I used to stack on-site appointments back-to-back. So it only seemed fair to bill customer A for the trip to their office, customer B for the trip to their office, etc. That way there was not double dipping.

One thing I like to do as it relates to medfordmel's comment...I do charge for travel time for all on-site visits. Then, if I want to be generous, it is easy for me to toss a credit on the invoice for travel time waived. When I send the invoice, I can then point out my goodwill toward that customer, making good all the way around.

Hi, I would like to hear how you handle negotiations with clients about travel by car of 50 to 100 miles that would fall outside the normal work day.

cryaeger:

For me, this would definitely be billable. This falls under the category of resources devoted to just this customer. In other words, for a client that is 50 - 100 miles away, I am likely going out to see them and only them. So I would bill for travel time at least one way if not both.