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CASE FROM PRACTICEIsland ?, recently eliminated adviser for retail trade, has agreed on the fee depending on results under the insisting of the client – the owner of a network of shops of clothes. The client has signed the contract, 25 % guaranteeing to it from increase in profits within the next two years. Island ? has finished the project for five months (without any income), really remarkably having worked, as was the present expert who had long-term experience in sphere of retail trade. And suddenly in the report on profits and losses within the next two years there were losses! How such could occur? At this time the client has decided to put up money in two more points, considerably having raised the salary. Island ? could tell nothing about it as was not a member of firm. Now it again works, operating its shop of clothes.
Some times we referred to an overhead charge and we are not going to to lose sight of this important part of the agreement on the fee. Earlier we recommended to you not to demand from clients of compensation of an overhead charge. However if they are connected with job over the project of the client, it quite another matter. The list of an overhead charge which should be compensated the client is more low resulted. 1. Cost of long-distance trips. 2. Payment for hotel accommodation and a food in the places removed from your city. 3. Long-distance telephone conversations on problems of the client. 4. Cost of research job. 5. The fees paid or other advisers, or for the services rendered to the project of the client. It is better to agree, that the client did it directly, relieving you of responsibility and from conducting difficult accounts department.
Besides, you should give bills on all overhead charge, and the client should pay at once almost them (weekly granting of bills became good practice).
If you are not familiar with the possible client, wishing to hold with you a fact-finding meeting at the remote office, it is reasonable to ask to send it air tickets and to reserve a hotel accommodation. In that case, if something goes not so, you will not be the loser.
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