Get the Most Out of Chargeable Extras
by Mark Porter
Dienamic MIS Software Inc.
When was the last time you produced a job without any changes? Are you capturing the revenues for these legitimate extra charges, or are they falling through the cracks? If you’re not gaining more revenue, then you should at least be avoiding costs. If a job is changed during production and you did not collect the extra revenue for the change, then you probably incurred more cost.
Finishers/binderies provide quotes for customers and customers submit orders. The normal process is to ensure that the job submitted and the quote provided are similar enough that you can approve the production of the job. Once that approval has been given, any customer-driven changes to the order should be chargable. How do you track these changes and bill your customer so that they feel compelled to pay? And, more importantly, allow yourself to collect the charges without damaging your relationship with that customer?
You must follow a procedure to record all changes to jobs, chargable and non-chargable, to ensure that nothing falls between the cracks and is forgotten. But just recording changes will not allow you to collect your legitimate extra charges. The changes must be documented as to date, time, employee and reason the changes were made to provide the maximum support for your claims.
Documentation is not enough. The changes must be communicated to the customer at the time they are requested. The changes must be recorded as having been submited in writing to the customer, warned that they were chargable and that a price was quoted.
When the job is completed a full listing of all changes should be supplied to your employee in charge of invoicing. They can then decide which charges should be accepted, changed or deleted. The invoicing decisions are determined and the invoice is submited to your customer. If the customer questions these extra charges you can support your claims by providing the customer with the who, what, where, why and costs details.
Hopefully your customer will start to provide you with better information when the jobs are first submitted. Either way, your company is in a better position because you are either collecting legitimate extra charges or avoiding the additional costs of providing those changes without charging for them.