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What approach do you prefer to take when a client thinks the billable hours on an invoice are too high, but you think they are reasonable based on the work performed/deliverables?

likehelpful
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Tell them this isn’t Walmart

likefunny

You should have gone to H&R Block

Overload them with information so that they back off

like

If you think the fee is reasonable, then I wouldn’t settle, if after explaining and justifying the fee, the client is still not having it, then it’s time to escalate to the partner.

likehelpful

OP, im not sure what level you’re at, but I’d loop in at least a director. Depending on the amount the client wants to reduced, possibly also loop in the partner. Generally, you want to consider the overall relationship with the client and/or specific buyer. Are they asking for $60k reduction when they spend $1M with us or a more substantial portion of fees? I would also understand why they think the hours are unreasonable. If they think you performed X but actually did Y then there’s a disconnect. Did they ask for X and we did Y then that’s not something they would pay for, but if we did what the contact said, then they should pay for it. You should explore why there’s a disconnect and come prepared with why the fee is justified. It may be helpful to compare to other recent, Similar work you’ve performed for them.

likehelpful

Negotiate in advance? How did it get to this point?

likesmartfunny

Gotcha, makes sense! I’m usually on big fixed fee engagements, myself (obviously, lol)

Next time hit with them overages that they can negotiate down. They’ll feel fine about the normal fee if they think they won by getting out of overages

like

Communicating with the client before they get the invoice is the key. They should never be surprised by the hours on the bill. Regular status updates smooth things over. I’ve never had a client refuse to pay a bill when they knew in advance what was coming.

like

Show him the wip, thats why i always demand that the staff put descriptions in their time entries

I’m in a deals environment so quick engagements but give them weekly updates on fees incurred to date so no surprises. Using that approach have actually never had a client push back unless a deal dies and they want a discount to carry fees to next one.

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