What should you do when clients don’t reimburse you for out-of-pocket expenses?
You know that saying, “Pay-to-Play” in sports? Well, it works with clients, too. No pay. No play. Even in the middle of a project.
Way back when, I always fronted out of pocket expenses for my clients. I thought it was easier, quicker, and less of a headache than waiting for approval, especially when the thing I needed to purchase was required to do the job.
And that, my friend, is how I got burned.
So burned, in fact, that I was left holding the bag on thousands of dollars of expenses – money that I assumed I’d get back, because why wouldn’t I?
Well, turns out, there are LOTS of reasons I wouldn’t get that money:
- the client had to stop the project
- the client had lost their funding
- the client decided to “go a different way”
- the client just didn’t want to pay for things after the fact (the worst one)
Turns out there are clients out there who want a say BEFORE money is spent, and what they think are unexpected expenses are actually required to get the job done.
Most service-based professionals are treating expenses like service fees. They’re not the same thing.
When you have a clear understanding of what it’ll take to bring your idea to life – from start to finish, all the time and energy and money and tools – then you don’t need to keep pretending that expenses don’t need to be paid immediately after you spend them. But more on what that looks like in a bit.
I think the actual problem with treating expenses like service fees is that we tend to lump them in with the “cost” of the project. Except the project cost of your LABOR is not the same project cost of your MONEY.
A lot of people feel uneasy about the fact that a project costs more than just the literal labor of producing it. That’s because chances are high that they’re undervaluing their work to begin with – from the start, in the actual fee being charged. It would feel weird to charge only $750 for a logo or brochure or website, but then tell the client they have to pay for all kinds of expenses on top of that amount, often which exceed that fee over time.
So, if you’re doing this, STOP fronting your client’s expenses. START doing this instead:
“What Would Sheila Say” about fronting expenses for clients?
🎧 LISTEN HERE FOR MY ADVICE! 🎧
The truth is that clients don’t know what they don’t know. What they think is normal – what YOU think is normal – doesn’t have to be. Avoiding confrontation about money, and avoiding the truth that a project is going to cost a client more than just the service fees to complete it … that’s a recipe for disaster.
I care about making sure you’re safe. Making sure your contract covers you. I care about whether you play the game – and who’s actually PAYING to PLAY. You shouldn’t be the one to pay. The client should be the one to pay. And it’s not to say you can’t front a little bit of money, $30 here or there, or even $250 if that’s within your disposable income, but not having a limit, not having an agreement about it – that’s asking for trouble.
So, I want you to look at your agreement. Chances are, you have very vague language about how to handle expenses. Or, you’ve lumped them together in your agreement with fees and other costs. Take a few minutes to go dive into it – then let me know where you need help in creating a client relationship that’s based on mutually beneficial money terms.
And, after you’ve done that, a great place to keep that momentum going is by reviewing the 12 Tweaks – it’s an Interactive Guide that will help you start to plug up some holes in your agreement, and it’ll help you start to see how to protect yourself AND your client relationship.
Next Steps
- Free Interactive Guide: “12 Simple Tweaks to a Clearer Client Contract” 📝
- Quiz: Find out which people-pleasing pattern is keeping your wallet empty 💸
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Hi! I’m Sheila, your guide to a Joyful and Thriving™ creative life! I have lots of titles: attorney, social worker, coach, consultant, keynote speaker, educator. And while I’m proud of those titles, I am a human first and a title second – just like you. I want to help you reset expectations, set boundaries, and make aligned decisions, so you can streamline and focus your energy on the people, projects, and pay that actually matter to you.
Instagram: @sheilamwilkinson | LinkedIn
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