Why practices should charge no-show clients
As a practitioner, every minute counts and nobody wants time wasted. So what do you do when a client does not turn up for a meeting? Zoe Whitman argues that these clients should incur a fee.
I read the recent post in Any Answers about non appearance fees with interest. During busy season, several clients hadn’t shown up for out of hour’s appointments, and the poster was considering charging a £20 non-appearance fee as a deposit. This would be deducted from the client’s bill, or lost if the client didn’t turn up.
The majority of responses either recommended implementing an email or text reminding service or stop offering evening and weekend meetings because of the high incidence of no-shows. And as Della Hudson pointed out, “If they did turn up they were only the tiny fees but proved to be the most hassle.”
Now, we don’t offer out of hours appointments unless there’s a real exception – such as finding out your brother in law hasn’t filed his tax return last thing on the evening of 31st January, for example. But we have suffered some very last minute cancellations recently for office hour’s appointments.
I have a lot of startups and small business owner parents in my network. Their businesses aren’t big enough for them to feel they can justify outsourcing their bookkeeping, but they do often need support with getting started, for example with setting up Xero.
We obviously want to help these clients so we offer 1-1 sessions where they can just sit down with us and ask us everything that’s on their minds. It’s a great service, it builds goodwill, those clients finally feel organised and able to tackle their finances, they recommend us to other businesses in their networks, and they come back to us later when things have taken off and they need more support.
Depending on the length of the 1-1 we charge up to £150 for this service. We know we add a huge amount of value in these sessions, but for a kitchen table startup it can feel like a lot of money. And I have found that people email at the last minute to rearrange – often rearranging several times, or they cancel at the last minute. It’s frustrating. We book time out for that specific client.
Of course, there’s other work I can be doing, but the ability to charge for that time has gone. Not to mention that inevitably I can’t rearrange for next week as they request, because my diary’s booking out six weeks ahead most of the time.
Is it reasonable to charge a deposit?
So the poster in Any Answers has decided to invoice a £20 deposit. It’s great idea if you don’t mind the admin, and we’ve started to take deposits as well. So far we’ve invoiced these with the client paying the balance by card at the meeting.
Personally, though, I think a really great way to do things would be for clients to book and pay directly through our website. I already have the ability for clients to book their own appointments in my diary, getting them to make payment at that point, would just be one extra step.
Would a deposit stop no-shows?
For the clients I’ve tried this with, the client has paid the deposit without question and has shown up for our appointment, so I’d say so far it’s been a success. But there is research that shows that a fine can actually encourage more of the “undesired behaviour”.
Now bear with me as I go off on a bit of a tangent but when I read the non-appearance fee post in Any Answers I immediately thought back to a study that had been conducted in Israel.
Some economists wanted to see how parents would respond to a fine for picking their children up late from nursery. If you’ve read Freakonomics you might have already come across it but in a nutshell: the nursery was finding parents were frequently late for pick-up and staff had to stay late to look after the children. They started to charge a $3 fine per child each time a parent was late.
The study found that rather than the late fine deterring parents from picking their kids up late, the number of late pick-ups doubled. The economists concluded that rather than seeing the fine as a penalty, parents saw it as permission to be late. And I think this is really interesting.
I wonder whether implementing a no-show charge will actually result in more cancellations and then that begs the question: “is the deposit enough?”
So how much should you charge?
If the client does cancel at the last minute, will £20 be enough to compensate for your time, the prep work you’ve done, and travelling to the office to make yourself available for that appointment? I’d argue probably not, and we’ve been invoicing 50% upfront without too much resistance.
Of course, we need to explain what that charge is for and why there’s a need to charge it, but it’s working for us and it’s something we’ll continue doing.
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Zoe runs But the Books, a bookkeeping practice in Bristol helping businesses owners who know how to do everything for their business... but the books to stay on top of their bookkeeping and to understand the story their numbers are trying to tell them.