I contracted out some work and they are billing me for internal communication

Question

I have a LLC that builds web applications for clients. We received a big contract lately and needed more help, so we partnered with another LLC. We are all located in the USA for context.

Their work has been fantastic and I'm happy with how things have been going. Their latest bill to me included a lot of billing for training a new employee and internal communications. I am more than happy to be billed for meetings they have with me. However is it normal for me to be billed for their internal communication? I have never partnered with another LLC before and want to make sure that I am not out of line for not wanting to pay that.

If is it abnormal, is there a good way to communicate this without breaking the relationship I have? We have a strict deadline and a set back of finding another shop to partner with would make us late.

Answer 1

First, check your contract. See how much detail it does (or doesn't) lay out.

Then, check any surrounding communication. What did you and the other company actually say to each other?

And then the important thing: You and them need to get on the same page about what this contract does and doesn't cover as soon as possible. I'd phone them or send an email that goes like this:

Hi (whoever your primary contact is),

Your work has been fantastic so far.

I've received your latest bill and I want to discuss a couple of items. Specifically there's a lot of training being billed, which I wouldn't normally expect to see included. When are you free to discuss?

I'd consider internal comms to be fine. Work is work, and a fair amount of it is communicating with other people.

Training is iffy. Generally, the point of outsourcing is that they are responsible for providing people/equipment to do the work, not you. If it were one-off specialist training for something unique to your project, then maybe. But training their new employee is hardly something you should be paying for.

So have a discussion, see what they say, and then see where it goes from there. If their work is as good as you say, and you need them as much as you do, then maybe you decide to allow this bill as it is but agree that going forwards, this kind of thing isn't covered. Or if it's not too much then just pay it without issue and chalk it up to experience for the next time you do one of these deals.

There are a lot of unethical/not particularly great consulting companies out there. If this company is doing awesome work at a total price that works for you then I'd be inclined to accept the bill (after a discussion) in the interests of maintaining a good relationship until the project is finished.

Answer 2

However is it normal for me to be billed for their internal communication?

This strongly depends on the contract you signed with this other LLC and the things you agreed that would be charged and billed, so do check your contract to get more insight on this.

Almost all interactions within and between parts of a partnership project involve communication, both internal and external. Thus, it's no surprise that some costs and expenses were incurred when carrying out the project. The fact that they are explicitly listing it in the billing charge suggest that perhaps they want to be completely transparent and detailed on the breakdown of the costs.

Again, check your contract with them and consider asking (politely) what this "internal communication" involved and why is it being charged. There is no harm in asking politely, and they will definitely be able to explain why this is being charged so you can then decide how to proceed.

Answer 3

They seem transparent, they seem professional. I will not bother to see those kinds of cost if they deliver on budget and on spec.

While I would cringe if the project drags, the deliveries are out of spec and the cost explode the estimate because communication is to avoid all that.

It is a bit a question of trust and preference in the end because we are not discussing about the deliveries but about the invoice description. If you poke them about the invoice details, they may adapt and every billing activities will become "development", so you will lose transparency without any gain at first sight.

Answer 4

If you're unclear on an item in an invoice, ask them. Don't mess around or guess, just ask. You shouldn't even be involved at this level, your finance person should be asking the questions for you. If you are the finance person then you need to take that role seriously. It's not just about the size of the amount.

I would not expect to get invoiced for their internal communications like other answers seem to be ok with, that's normally their infrastructure and there is no way I could tell if my bill even reflects reality. Everyone needs to communicate but that's normal, Everyone needs to go toilet as well, but I don't want to see toilet paper on my invoice. Same with training, it's not normally your problem to pay for unless you request it or have at least agreed to pay for it prior to billing.

Their work has been fantastic and I'm happy with how things have been going

This has no bearing on the bill, solid work is absolutely normal if you're paying professionals for work.

If is it abnormal, is there a good way to communicate this without breaking the relationship I have?

Directly, promptly and professionally. Finance is not a popularity contest. You're not doing anything wrong by asking for clarification.