The Zero Charge (but huge value) Invoice
In conversation this morning the topic of 'scope creep' came up. If you aren’t familiar with the term, as a Freelancer or small business owner you will be familiar with the practice. You take on a contract or project from a client to deliver x, yet as the project progresses, they also ask you to audit y, have a look into z. - sound familiar?
Often, we don’t charge for this work and include it as ‘value add’, a key part of developing that long-term client relationship.
However, if the ‘user’ and the ‘buyer’ are different people within the client organisation you need to find a way to highlight all this additional value that you provide otherwise at contract renewal time, if the purchasing department obtains cheaper quotes, all your ‘added value’ throughout the year can easily go unnoticed.
It reminded me of a practice I used in my Account Manager days – The Zero invoice.
The concept of the Zero invoice is to capture the monetary value of any work you provide, that you choose to give to the client at zero charge.
From telephone support, audits, extra staff training and even deliveries; anything that you could charge for and don’t – capture here.
Ensure that you submit these as formal invoices through your accounting system so they are captured by the client’s accounts department and will be reviewed by the purchasing department when making future buying decisions.
If you include the zero-charge work within your regular monthly invoice, show the full price and then adjust to a zero charge.
This practice also helps you to keep a record of additional work provided rather than trying to remember everything you did at the end of the contract. Are these services which you could (or should) be charging for in future? Are there opportunities to create new service offers?
Now the customer, (users, buyers and decision makers) can see the full value of the services you provide throughout the contract, those cheaper alternatives may not look so attractive.
Janet Doran, works as a Strategic Business Coach in Harrogate, Leeds & York. enabling small business owners to win in competitive markets.
Find out more at www.thepositivepen.co.uk or call 07505 120051