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New customer set up charges?

New customer set up charges?

New customer set up charges?

(OP)
Greetings

When I convince a new customer to sign onto my services there is always time spent generating all of my documentation for this new account (I am currently putting this under the cost of doing business or overhead cost column)  How about the time spent creating new drawing formats, startparts, and all other formating procedures required when they are not using the software your using?  By the time you get everything set up and approved by their people that determine this it can be alot of hours.

Any opinions would be appreciated.

TIA

RE: New customer set up charges?

Anything that the client "requires" outside of your normal procedures/formats should be charged back to the client.  In the future, think about adding that to the contract language so that they can anticipate the charges.  Back-charging after the fact could turn some people off who will see it as being "nickeled and dimed" which could lead to less future work.

RE: New customer set up charges?

ProEDesigner00

That depends on how the contract, fee structure, or compensation is set up, what is agreed with the Client, and what the market looks like.

I would say normally this would be carried as you are doing, in overhead.  You may wish to use an allocation methodology to "burden" your projects so as to stay whole, that's up to you and depends on the competitiveness of your market.

If it is a competitive lump sum bid you can choose to include some of the costs in.  If it is a comppetitive Unit Rate contract, you may include a "Mobilization Fee" or allocate it into your rates.  If it is a fee basis, you could agree up front that there would be "set up" charges or, again, build it into your rates in the form of allocated costs.

It all comes down to how competitive do you have to be and if you include those costs will you still be successful on the tender?  And if not, then what is the overall impact of eating those costs with getting the work?

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website: www.oil-gas-consulting.com

RE: New customer set up charges?

(OP)
Greg

My last project was kind of a bear in the fact that the customer was using a different software than I (they had agreed to this) and the font size and type might not have been exactly what they had and I chased this for alot of hours that I felt should have been a done thing early on.  I will stipulate this in the contracts in the furture that this sort of aproval is worked out before much of the work is started.  Whether I charge them or "eat" it can then be figured out on my own and the hours muched around on the accounting side.

Norbert Gruman
GD&T LLC.
norb_g@hotmail.com

RE: New customer set up charges?

And Client's tend to have much higher expectations ........ after they sign the contract.

I, as many others on the forum, sympathize.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website: www.oil-gas-consulting.com

RE: New customer set up charges?

For me, there is always an administrative cost with setting up for a new client.  Setting up account numbers, project numbers, and whatnot.  The "How To Be Consultant" books say I should charge a flat adder fee for administrative costs.  So I do.  So far, no one has complained.  But no one sees the cost breakdown, either.

It's a real cost, so I think it should be charged.

TygerDawg
Blue Technik LLC
Advanced Robotics & Automation Engineering
www.bluetechnik.com

RE: New customer set up charges?

(OP)
Hey all

While dosing off here I am perving websites to get ideas for mine.  I believe simple is best. As much as its neat to see what an be done, the more straght forward it is the better a customer can pick up on your phylosophy on how you do business.

have a great evening.

Norb Gruman
GD&T LLC
Norb_G@hotmail.com

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