Was wondering what others in this industry are doing about change orders (we collect at time of request @time and materials) and was contemplating a charge(beyond the standard sevice call fee) for arriving at the job site only to find that the 'ready' customer is still a few weeks out. I know that this is the cost of doing business, so to speak, but when you travel @ 100 miles to a lake house only to find that the paved driveway is still knee deep in mud. We can only verify with the customer that they indeed are ready. We do ask, in great detail, as to the stage of the project but as you already know some people lie. So basically, are any of you guys charging a fee for 'rescheduling'(read:wasting my time)? Not wishing to be unfair or unethical just tired of eating the labor and rearanging my schedule on an hourly basis because of customer/contractor confusion.

You can charge for anything that you notify the customer ahead of time might have to be added. Explain in the initial bid, that wasted trips due to misinformation will be charged, as will changes, at least those that require additional work.

I never charge for the mere fact that a change is made, although some people do, but I do charge for undoing work, additional materials, added labor time, etc. A reasonable customer must understand this, after all, since you already expect to be paid for your time.

If I have to change a day's planning because of a customer, I will ask to be compensated for lost time (read: income) if I end up doing no work at all. Think of it as an apartment. If you can sub-let, then you lost no time. If, however, you end up with no tenant, the rent has to be covered.

Larry
www.fineelectricco.com

Change orders are particularly a touchy subject but IMHO one of the most important tools an installation company needs in doing any kind of an extended install. Of course, you may not be able to collect on all of them, but it allows you to document the job properly and at the end most customers will pay what they owe you if you can present evidence to support the additional charges along with their signature on the change order. I don't charge to move an inwall speaker 2 feet to the left if it doesn't have to be done twice but if it is a custopmer requested change after the fact then they will get charged. If you depend on their memory then you're out of luck a good part of the time. As far as wasted trips I havn't been too successful on the first one but I am usually able to collect additional travel time on many occasions for repeat occurances. Rarely can I get paid for additional down labor time but I'm not really sure I'm entitled to that.

A great idea to start a thread with.

We charge for change orders, and mention them in the contract the customer signs. The change costs include the cost to actually effect the change (often zero, for a sideways move in a speaker or some such), plus a documentation charge for my desk time to track the job. This is often zeroed out the first time or two, and mentioned as such to the customer. After that, if the changes keep coming, the customer knows that the $75 charge is part of the process, and it goes on the bill.

Missed time is a different story. I'm bad on that, and need to get better.

Keep it coming, guys!

Thanks you Larry, Shoe, and Theaterworks for the response. Thanks in advance to all that apply in the future. Shoe, I am not sure that I am entitled to down labor either, however, schedule changes dont affect just our companies but our other customers. We stay busy(thank God) and it causes us to loose 'face' with other customers when I have to move there scheduled date of install because of incorect information about the state of a project I am working on for another customer. Maybe I am just whining here?. I just feel that it is not my sole responsibilty to eat all the misappropriated labor.
Larry, I agree. Theaterworks, I will keep the $75 fee in mind(and in pocket).

No matter what biz you are in this happens. Hair dresser,doctor,lawyer. People make appointments don't show don't call. Dealing with the public generally sux but necessary. My family are big commercial builders and sometimes change orders on a big job over time can add up to over a $1,000,000. The clients have a bad memory just like the homeowner for $75. Even when they see there own sig. Just had one the other day. By the time they got to $750,000 the client said never mind I see. hehehehe

I agree Echoslob, however, if you dont show up for a doctor's appointment you STILL get billed for an office visit. Atleast in my area, and since a good majority of custom customers are doctors and lawyers shouldn't they have a preconceived knowledge that time is money?

They unfortunately turn out to be the worst people to work for.

bump

looking for more input

Ditto, I'm looking for more input too.

Questions might include:

Do you collect for the cost of change orders when they are executed, or at the end? If at the end, and if the change order is a larger percentage of the project, how do you contend with the skewed total cost of the project and the (in effect) large hold-out at then end. In other words, if the client adds a $25K change to a $100K project, and the final 10% of 10K ballons to $35K, what is typically done?

Who writes and approves change orders? If your guys go to a job site and find the cabinets in a different spot than planned, and that the wiring needs to be moved, do they just do it? How do you track the time needed? My guys are told to write a change order on the site and track the time for it right then, and it's up to me to retroactively notify the client and add the T&M cost to the bid. How else is this done?

More, ladies and gentlemen, more!

I work in a hifi shop and we dont yet have a policy. All of our customers are within 15 min, so not usually a big deal. Only one cancellation upon arrival within the last two years. My buddy is an electrician and bills time + materials for everything. If he shows up with a crew and is told they aren't needed, he bills for the entire amount of man hours for the scheduled visit - guess what...they only cancel once!

If you have already billed 90% of the original order then you bill 90% of the change order. Stay in perspective to your payment schedule.