A few weeks ago, I had a client cancel an already-started project. A decision was made higher up in the company’s food chain, and everything was amicable.
The three main reasons the cancellation was hassle-free were that 1) I had a signed contract, 2) I had processes in place, and 3) I had already pre-qualified the client and judged them to be in good character.
I’ve heard horror stories about freelancers working for weeks, and when a project gets cancelled, client relations sour, and they are left out-of-pocket. They are not getting paid any money for the work they have already done.
This newsletter is about handling project cancellations and the importance of a signed contract.
First, I want to talk about pre-qualification.
When you get a web project lead, you should always qualify that lead. Don’t just jump in feet first and accept the job. Perform due diligence by asking them questions about the project, budget, timescales, expectations etc.
Also, research their company website and see what they post on social media to get a feeling of how they interact with others. The research will help you qualify their voice, character and ethics.
I’ve politely declined proposals because my morals and ethics didn’t align with the prospective client’s. Please ensure your prospect is a good fit before accepting the job.
Let’s talk about contracts.
You must sign a contract before starting any work on a project. It’s the legal agreement that covers the operation of the project between you and the client. A project contract includes total costs, delivery times, deliverables, expectations, liabilities and, of course, project cancellations (and much more).
You and the client’s key stakeholders should sign your contract. Send a copy to every signatory.
If things go awry with the project, for whatever reason, your signed contract is what you fall back on.
Technically you should be providing your client with a Scope of Work (SoW) and a Master Service Agreement (MSA) to sign, but I’ll leave those for a future newsletter and blog posts.
Projects can get cancelled for any number of reasons. Regardless, your contract should state what happens when this happens.
Here’s my contract cancellation clause.
“CANCELLATION – Should the project be postponed or cancelled by the client, then the client shall be liable for our fees, costs and expenses up to the time Zero Point Development is notified in writing of such cancellation.”
That’s it. Short and to the point. But if you don’t have something like this in your contract, it opens the issue up for “interpretation” by all parties.
When a project cancellation happens, it’s clear that we should get paid for the work we have already done.
How do you handle getting payment and closing down the project?
Your business should have a set of Standard Operating Procedures (SOPs), and project cancellation needs to be one of those.
Here’s my SOP for project cancellation.
- Get the client’s signed confirmation of project cancellation, the reason and the effective cancellation date.
- Collate project timesheets and calculate the total cost up to the cancellation date.
- Create a Xero invoice and send it to the client. Include timesheets.
- Provide the client with any owned project assets.
- Remove client access to the Jira project and archive it.
- Disconnect the client Slack channel.
- Disconnect the client’s shared Google Drive/Dropbox folder.
- Archive and delete the staging server.
- Archive and delete the LocalWP server.
- Archive the local project folder.
- Add primary client contact to ActiveCampaign “Project Cancelled Amicable” email sequence.
Having a standard operating procedure makes handling things like project cancellation a breeze. Handle it like the business boss you are.
Let me know if you’ve had any problems with project cancellations that could have gone better if you had all this in place beforehand.
Until next time.
Wil.