Don’t get stuck with the bill! How to ensure your project costs are covered

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Reader Matthew asks:

Between the designer and the client, who pays for what and when?

Great question, Matthew!

It’s one that many of us stress over, especially because it often feels like a trade-off between simplicity, good customer service, and financial security.

Sidenote: Once you finish, read how 4 freelancers built recurring revenue models that changed their business. You'll love it.

For example:

  • It’s much easier to cover the cost of web hosting than to ask a client to go through the unfamiliar process of purchasing hosting only to forward all of the emails to you anyway.
  • It’s much more efficient to purchase stock photography than it is to have your client do so and then send you all of the images (especially if they’re big or numerous).

And really, that’s not our clients’ jobs…they’re project managers and CEOs, not virtual assistants. They’ve hired us to make their lives easier.

Imagine if your lawyer sent you a list of case files to round up before your next meeting. Or your dentist itemized a list of materials for your upcoming cavity filling. I’d cancel the appointment and look elsewhere, and I’m sure you would, too!

So what’s the best approach? How do we protect ourselves while providing excellent customer service?

Here’s what I do, and almost never encounter client resistance or eat project costs.

You'll also enjoy this episode of our new podcast...

Share your own awesome system in the comments!

Put it in your contract

Even if you’re not sure exactly what you’ll be purchasing, add a line of “typical” project purchases to your quote.

These might include:

  • Stock photography
  • Web hosting
  • Themes or design templates
  • Domain names
  • Plugins
  • Etc. (this is important!)

Note: I handle printing costs totally differently, so I always add “printing costs not included.” More on this later.

Some designers add a markup fee to these project costs, but I simply state “at cost to designer (if necessary).”

Your choice.

This gives you legal recourse in case a client balks at paying for a specific item, and the “etc.” ensures that they’re still responsible for an additional cost not on the list.

But let’s try really hard not to get to that point, because if a client’s refusing to pay for a $60 theme, you’re probably struggling to get paid for your time, too.

Clearly communicate all additional costs

This sounds like a no-brainer, but all of us can list off at least 2-3 clients that fired their previous designer because they had a bunch of “surprise” additions to the final invoice.

Even when we’re not trying to be subversive, sometimes we purchase something we assume our clients knew cost extra.

Like additional domain names (.net, .co, .biz, etc.): all of a sudden they’ve spent an extra $50-75 on domain names we assumed they understood cost money, and they’re irate that we didn’t inform them of the extra expense. They’d never have asked us to do it if they knew it’d cost extra!

So before you spend money above and beyond what you’ve already agreed upon, get it in writing that they approve the additional cost.

“As you can see, I’ve used stock images here, here, and here. If you have your own images, I’m happy to test them out, or we can purchase these images for <insert price per photo here>.”

“The hosting company I recommend is <insert your favorite here>, and their pricing structure looks like this…”

“Here are three themes I think will work well for your site and their associated costs.”

Itemize project costs on the invoice

Now, even though your client happily approved additional project costs, it’s not uncommon for them to forget how $20 here or $70 there adds up.

So they get the final bill and freak out because that number doesn’t match the deposit payment.

But when you itemize all of your project expenses on the invoice, it’s hard for them to dispute why the final bill doesn’t match what they were expecting. They can see the “final payment” matches their deposit as well as all of the additional costs.

And if you really want to go the extra mile, you can note the date each was approved.

How I handle printing costs

I mentioned earlier I handle printing costs totally differently, and truth be told, I’d do everything this way if there were an automated, painless way to do it.

I stay totally out of printing costs and let that transaction occur between the printer and the client.

If the client wants their finished product, they’ll pay for it.

So when I contact a printing company, I’m very straightforward. I explain that I’m the designer and all questions/concerns regarding the:

should be directed at me. All questions and concerns regarding:

  • substrates (printers’ fancy word for paper),
  • finishing (think collation and folding),
  • payment, and
  • pick-up/delivery

should go to my client, and I list their contact information. (Depending on the project, sometimes I handle the paper queries.)

Side note: If someone reading this wants to make a service such that all those project extras we’ve been talking about allow the client to purchase and have all further correspondence (except billing) sent to a different email, I’d totally use your services. All. The. Time.

What do you do?

So there you have it.

That’s how I handle extra project costs – sacrificing neither financial safety nor customer service, both by adding verbiage to my contract as well as confirming additional purchases before actually purchasing them.

And like I said before, if they aren’t willing to pay for the additional items, they’re probably not planning on paying you at all. Or at least it’s going to be a fight.

Questions? Suggestions? Critiques? How do you handle payments? Drop me a note in the comments!

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About April Greer

April is the Director of Projects at Reliable PSD, a design-to-code company for designers, by designers. She’s the glue keeping everything together, organized, and right on time, and giving everyone a fantastic experience while she does it.

 

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Comments

  1. Great answers to Mathew’s question! I think starting out we (designers) all have a hard time with this one and it takes having to cover some extra costs to figure it out. It’s extremely important to have a good idea before the project starts of any prospective costs and go over the possibilities in depth with clients. Agreed that no one likes a surprise increase to their invoice and no designer likes loosing profit to project costs.

  2. Great information! I usually include most of the costs you mentioned except hosting, in my clients bill just so they don’t have to think or worry about it.

    Then I explain everything in my policies which my customer then has to sign.

    So for instance my customer never has to worry about picture cost, theme cost, or other little fees because I’ve already added that plus an extra contingency fee in the price I estimate for them.

    I found that my clients felt uncomfortable or were confused when I line itemed every cost even if they agreed to it.

    When I eliminated that they felt more comfortable knowing everything was “included” even when my prices were higher than other

  3. I agree on preparing the invoice in the way you explain it. With all additional costs and extras. Totally. But dealing with the printer is also an extra service that I bill. It is a lot of work going back and forth, not mentioning the various last minute changes of the client, advising on paper, convincing on paying a little extra and get economic quantities. Plus, most clients don’t want to deal directly with the printer. They don’t have time and don’t understands most technical words. As a graphic designer I do think our job is to be the intermediate between them. What do you think?

    • Hi Mark,

      To be clear, I interface with the printer until it’s ready to be printed. Then I have the client and printer converse directly for payment and pickup. There are no technical words there…just credit card information or invoicing and shipping/pickup.

      Sorry I was unclear!

      April

  4. Carolynne says:

    I have a couple thoughts about web hosting and stock photos. If you buy the photos under your name and the client asks for the original files, you are violating the licensing agreement. And the client may not understand why they are paying for the photos but then don’t get to have the files.

    As for web hosting, that’s another thing I don’t want in my name or on my credit card. It’s much easier in the long run for all that to be in the client’s name in case the working relationship ends. It also cuts down on the time you have to spend billing people for all those additional recurring expenses. And potentially having to chase after them if they aren’t a prompt payer.

    Just my two cents. 🙂

    • Hi Carolynne,

      I see where you’re coming from with the images, especially if they want to use it in other marketing. I think that’s something you and the client need to discuss prior to the site…what else is going with it (if anything). Because if you’re doing the website and a brochure, for example, you might do the design for both, and then they are less likely to need the files. (Although some really want them, and that’s certainly something to address ahead of time…whether they’ll want the original files or not.)

      For web hosting, as soon as I purchase the hosting, I change the credit card information and set the renew to “manual.” That way my card can’t be used to auto-renew next year. All you have to do is change the number and the address if they won’t let you delete it. Then they add their information, or you do it for them.

      Thanks for your input!

      April

  5. April – very enlightened advice. I love how your approach keeps the client informed while keeping you free of losing the profit you make per project by handling all of these costs yourself.

    What do you think about an approach where you do manage the client’s hosting for a monthly fee and that can cover maintenance too – and where you would pay for hosting but that’s worked into the cost of your ongoing fee?

    I’ve always wanted to do something like that but just never gotten around to it lol. I mostly do what you do and think it’s so wise to keep your client free of things that are simple for you but a crazy hassle for them. That alone will keep clients around for years.

    Thanks as always for the insights!!!

    David

    • David,

      I’ve thought a lot about that too – especially because that’s a great possible “dependable” income until their contract is up. I tried just providing maintenance for a small monthly fee, but that wasn’t quite enough to entice my clients, and mostly they hired me to “fix stuff” enough that they didn’t see preventative maintenance as a necessity, because I do updates and such when they hire me for web updates/maintenance.

      But perhaps upping the cost a bit to include hosting and maintenance would be significant enough to get clients interested.

      I find there’s some education involved as to why they would need regular web maintenance, and that can be a difficult hurdle, too. But overall I like your idea. I think it would lower client costs on websites overall, and be more efficient for the designer.

  6. Hello All,
    Really enjoyed reading this. I am an amateur designer and re designed a web site for a friend. My friend gave me some money for his first site but I have spent a lot of time on his new one and I must admit it looks pretty good, it is ready to go live. This is where my amateur shows up! Payment hasn’t been mentioned yet! Gulp! Any advice will be more than welcome,
    Thank you

  7. Great article. I tend not to itemize costs as this allows the customer to pick and choose like a shopping list. Also it may show a bit too much information sometimes but of course there are exceptions.

    • Hi Mark,

      I find that I have a lot of extra explaining to do when I lump things together, whereas when I itemize (especially on the final invoice), there’s less back-and-forth before getting paid.

      Just my experience…maybe your clients are different!

      April

  8. I’m also curious about how other designers handle printing costs. For small jobs and/or repeat clients (i.e. a business card reorder) I’ll make the order and bill the client plus an upcharge of 10%. For new clients or larger dollar amounts, I will work with the printer directly (I don’t trust clients to choose the right paper or finishing haha) and tell the client what they charge and have them either cut me a check prior to printing (for online orders) or have the printer bill the client directly. Then I bill hourly for the time I spent working with the printer. It’s worked well so far.

    For things like stock photos, I say in my quotes/contracts that stock photos and the like are not included in the quote. Then if we need those items, I have them approve the cost in writing and bill them for it.