Billing customers..Estimate vs. final bill???
 

I recently finished a job for a customer..friend of a friend. Very nice couple. We originally discussed some cabinets for their convenience store so they can expand their deli operations. Pretty straightforward cabinets with laminate on top and back surfaces..no doors on the fronts. They cabinets were 13x4x3; 2ea.. My original estimate for the cabinets was 4-4500. They ended up wanting a bar sink installed and plumbed, a raised floor and a short knee wall added.
Long story short, I agreed to do the job for cost plus 20%; total came to about $5800.00. I just got an e-mail questioning the charge. He's not mad and says he loves the way it came out, he just wants some clarity for explaining it to his wife and father-in-law how the price went up by almost 40%.

I explained how the job originally was for just cabinets but as things got added and changed, the price increased. I even broke it down to each category in the original bill.

Should I have reminded them all along that each addition raised the final bill? How do those of you that have to bill for your services handle these situations? When you see that the original estimate is going to be exceeded, how/when do you discuss with the customer?
It seems that people should realize that additions/changes = more cost. I don't want them to feel slighted or taken advantage of but I have to get paid for the time I put into a job.

thanks,
Ben

Any change/addition always requires an amended estimate.

Present it and let the clients wallet decide.

Amazing how "wants" change when presented with reality.

did you tell them $5800 or was the extra stuff open ended, estimate-wise? was it ever pencilled out for them or didn't they ask specifically? sounds like they were not paying attention very well.

The problem with what you did is you opened the door for, "If I had known how much extra it was gonna cost I might have said forget it."

By not letting them know up front you basically wrote a blank check with their money.

I know you are not really profiting from the extra cost but it is their money that you spent without their consent.

If they were not friends you could find yourself in a bad situation. There are people that would not pay you based on lack of up front additional costs and if you took them to small claims court over it you'd probably lose.

It really is not the right thing to do for yourself or the client.

My cousin is the shop manager for a large Caterpillar dealership.

He calls every customer and goes over the final bill before mailing it out. This has dropped the complaint level to zero.

Always, always keep the client appraised of the cost of the changes and get them to initial those changes!

You might point out that it's only 29% more (not 40%) than the high end estimate before all their changes.

Change order = updated estimate... in writing. Quickbooks is your friend.

Addendum and sign before work is perform. I always add the time factor in there too. When the additional work is done, request for payment goes out and I hand it to them and get pay in full (usually) and complete the rest of the job.

Good points by all. My mistake was not putting a number to the additional work for them eventhough they knew I was working by the hour and cost plus. I did however, remind them along the way that changes added to the final cost.
I have been lucky in the past I guess; my clients have always wanted to have an idea of the cost upfront but have always been aware of their effect on the final bill. Come to think of it, 95% of my clients have been business people that are either accountants, attorneys, etc. (time is all they can bill for) or involved in the construction business also.
Lesson learned.

That is why in the construction business contractors issue change orders when a client decides to make changes to the project. It could either be an additional cost, but could also be a credit. A change order is issue for any changes discussed, including any additional cost and any additional time.

In the construction industry ADDENDUMS are issued after the project is submitted for bids, but prior to awarding the contract. Addendums could be in replies to request for information (RFI) after a contractor has have a chance to review the construction documents.

I had a very large industrial building built for me years ago. I signed off on every single 'change order'. Then we paid the quoted price and negotiated each change order on it's own.

Changes need to be documented, ideally they should be priced, but they do need to be acknowledged at a minimum.

Sounds like it time for someone to "grow-a-pair".