The Overtime Charge Dilemma

An article in the Printing Industries Association of Southern California's Weekly Update offers some advice for printers faced with the dilemma of whether to charge clients for overtime when they deliver their files later than promised.

Most people understand that working overtime is golden since it means that more work is being produced, the overhead is being more fully utilized and we are getting closer to profitability. However, there is that irritating moment when the client who promised the file on Tuesday, finally produces it on Friday but still wants delivery on Monday.

We can make the Monday delivery with weekend overtime, but we’ve raised the cost of the job. We could tell the client, it was impossible, but we might lose the job and/or the client. Even with the overtime premium, there was still a positive contribution to overhead from the job (invoice minus materials, wages and buy-outs), so if we lost it we’d be poorer for it.

A reasonable course of action might be to say that you’d be happy to deliver on Monday but because the client has lost four days on the schedule, you would like to make a fair charge for overtime. The client might very well accept this. If they said that they were out of budget for the project, you would be in a position to help them out on this one by waiving the proposed charge hopefully turning a loss into a win.

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