bad debts and compensation for to put work right

[richy]

hello everyone. sometimes i see these IR35 questionairs and say similar questions. not sure the best answer from 'em tho, suggestions much appreciates :-

1.Have you suffered any losses owing to bad debts etc? -- from Bauer & Cottrell doc.

thus..... this makes my Ltd company look more like a legit business, right? and not like an employee who always gets paid no matter how crap the work is he/she does etc..

2. Do you have to put right any work which is not to the satisfaction of the client?

thus..... this makes my ltd company look more like a legit business cos its the Ltd company that has to put things right, and won't charge for more "employee" hours etc, right?

thx. richy

[Sockpuppet]

1. Yes, losses are a good sign. Well not making them but the chance you may make them.

2. Same again. If you get paid regardless then that is bad.

[Ardesco]

I don't know about that. Just because it is not to the satisfaction of the client doesn't mean it needs to be put right. That may not have specified it correctly in the first place, or thier requirements may have changed. In this case it should go through a change control process and I would expect most companies to bill for any changes that go through a change control processes.

[malvolio]

I don't know about that. Just because it is not to the satisfaction of the client doesn't mean it needs to be put right. That may not have specified it correctly in the first place, or thier requirements may have changed. In this case it should go through a change control process and I would expect most companies to bill for any changes that go through a change control processes.

That's the reactive approach, and it's the one most companies seem to use.

The more effective proactive one is to agree the requirement and set the completion criteria up front, then work to that. Sadly. most clients won't expend that effort and most contractors don't.

[Ardesco]

That's the reactive approach, and it's the one most companies seem to use.

The more effective proactive one is to agree the requirement and set the completion criteria up front, then work to that. Sadly. most clients won't expend that effort and most contractors don't.

I agree that the requirements and completion criteria should be set at the start, however scope creep and changes to requirements do occur and they should go through a change control process. Ideally you will have something in the completion criteria that says we will procees x number of hours in change requests and everything else is chargable.

Unfortunatly the end client may still not be satisfied with the end product if there is a lot of scope creep and a lot of change requests. As a business you do need to draw a line in the sand and start charging for this extra work at some point.

[Bluebird]

I agree that the requirements and completion criteria should be set at the start, however scope creep and changes to requirements do occur and they should go through a change control process. Ideally you will have something in the completion criteria that says we will procees x number of hours in change requests and everything else is chargable.

Unfortunatly the end client may still not be satisfied with the end product if there is a lot of scope creep and a lot of change requests. As a business you do need to draw a line in the sand and start charging for this extra work at some point.

The question about IR35 is really about rectifing errors rather than the "client" being happy.
If being happy were the case nobody would ever get paid...

[DS23]

[QUOTE=Sockpuppet]1. Yes, losses are a good sign. Well not making them but the chance you may make them.QUOTE ]

what losses have forumits had and why?

i'll go first: £20K - agent went bankrupt.

[malvolio]

The question about IR35 is really about rectifing errors rather than the "client" being happy.
If being happy were the case nobody would ever get paid...

The IR35 side is about demonstrating actual risk that you may have to do work that you won't get paid for. In its own way, a good thing, it only hurts if you genuinely have got it wrong and have to put it right!

As regards scope creep, as per Ardesco's post, yes it happens, and is why 90% of HMG projects fail, for example. But the whole point of change management is that (a) the scope doesn't change significantly and (b) if it does, the extra cost is part of the Change Request. In other words, if the change will cost unbudgeted resources then either the resources are made available, or the change does not happen. But then that's ITIL speaking, not reality.

[Bluebird]

The IR35 side is about demonstrating actual risk that you may have to do work that you won't get paid for. In its own way, a good thing, it only hurts if you genuinely have got it wrong and have to put it right!

As regards scope creep, as per Ardesco's post, yes it happens, and is why 90% of HMG projects fail, for example. But the whole point of change management is that (a) the scope doesn't change significantly and (b) if it does, the extra cost is part of the Change Request. In other words, if the change will cost unbudgeted resources then either the resources are made available, or the change does not happen. But then that's ITIL speaking, not reality.

Problem sometimes is that a vendor will sigh up for a woolly scope just to get the contract, then the arguements start about what the scope meant...

[richy]

thx for the replies ;-) richy