Retroactive compensation for weekly meetings whose hours were not logged

Question

I have worked as a freelance developer for a startup for 22 months. I have a weekly meeting with my manager for 1 hour, so 4 hours per month.

Since I started this freelance work, I never added these meetings to my hour sheets. I suppose that I never really thought about the meetings as hours-worked for the company (this is my first time freelancing). The recognition finally hit me when having a meeting with another employee, for which I was compensated.

The total 'missed' hours at this point is 90, which is a pretty big number considering that I work part-time about 30-40 hours per month.

I would like to pitch to my boss that I would like to be compensated (retroactively) for these hours, but it's my fault for never logging the hours so I feel that I may not have any right to compensation at this point. Furthermore, it would be a decently large sum of money that would be paid all at once, as opposed to spread over 22 months as it should have been, so that may cause problems for my employer even if they wanted to pay me.

Do I have any right to ask for retroactive payment, considering that I forgot to log the hours? Should I ask for compensation? If so, is there a preferred method for asking?

Answer 1

I think there is an issue here and it is mostly on you. If this were just a few times then it is easy to say, "I forgot to add those hours into the bill."

But you have started a pattern. And as a client they could easily have used that pattern in their decision making process of using you or not. So in theory the free counseling could have tipped them - it shouldn't have but it could have.

I would simply breach the subject with the client. I would do this in person if you can. If you are lucky, your contact is playing with someone else's money. If they act like they want to make amends then I would offer a discount because it was your issue (I am thinking something fair would be 50%).

If the client simply acts disgusted or is negative - which they should be because you are dropping a huge money bomb on them - then I would personally chalk it up as a learning experience. I would then act like the purpose was to just inform them that they will be billed for these meetings in the future. It is highly likely they won't like this either but this is the price of hiring a freelancer. I could see a client making these meetings once every 2 weeks if they are concerned, which might be good for you too.

As a fellow freelancer I have too made mistakes about not charging for meetings. Sometimes given the opportunity or the amount of work involved I may just waive these costs and work it into the hourly rate. But the mistake was yours. If the client has a budget for your work they should not have to suffer. Really this is about your own accountability and reputation.

Answer 2

It's entirely normal for businesses to have billing errors caught in an audit that result in retroactive billing. It's also possible this will cause some hard feelings. As legitimate as the charge is, you have to weight the cost against your business. Is it worth cutting this discount to keep the customer? Waiving the retroactive pay may seem expensive, but you lose the customer, how much will that cost? Roughly speaking, you're looking at a 10% forgiveness, which is probably worth keeping the goodwill. You can cash in on that by letting the client know. That does two things--it lets you play the good guy for saving them money, and it lets them know you'll be charging for the meeting moving forward.

Answer 3

It really depends on what you want and what you will agree to, and what the client wants and will agree to.

First, check into the relevant laws for your country and state/ province/ whatever. Although I do NOT think it likely in your case, there could be laws that bar you from collecting for some of the prior hours on the grounds that they have been unbilled for too long; how long is 'too long' may vary by the type of bill. A few keywords: "(Doctrine of) Laches", "Estoppel by Laches", and "Time-barred debt".

Then when you talk to your client, stay honest, and ask your client what he suggests. ("I only just realized that I have never logged my hours for our weekly meetings. How would you like me to handle this?") Depending on the answer (and the mood) you get, and how close it is to what you feel reasonable, either implement the clients' suggestion or make an alternate suggestion.

The possibilities range from the extreme (you drop it because you think the client may fire you over it, or your quit and sue the client), to the more equitable. You may (or may not!) want to offer to drop the first year charges entirely, or everything before x months ago, to make the rest of the debt more palatable to the client. "Since I was the one who dropped the ball on this, why don't we forget everything before this past year..." (or six months, or eighteen months, or whatever you decide if you go that route).

If your client is unwilling or unable (start-up!) to pay a lump sum, you could arrange to bill the unpaid work over a longer period, either by billing for the current hours plus X hours of the unpaid for each week, or by the client making several smaller lump-sum payments. Be flexible on repayment arrangements, especially if the client is cash-strapped, but once you have reached an agreement, stick to it. Do not let your client 'forget' to repay you, or to delay the payments on the older debt (beyond any provisions you agreed to).

Answer 4

Some contracts include clauses indicating how far back you can bill. Check yours.

I would tell the client that you're going to start charging for the meeting before putting it on an invoice. Give them a chance to respond. It's possible they may want to limit the meetings or cancel them altogether.

Some consultants don't charge for initial quotes, but usually includes that charge if the client decides to work with them. You don't want to continue anything for free for too long. Clients don't appreciate it as much as you think.