21 May Paying into the Good Faith Fund
Ever start communicating with a potential client and you suddenly find they’re taking up an enormous amount of your time? Way more time than they should? The Good Faith Fund is there for a reason, but it has it’s limits.
I recently made an acquaintance with a potential client who was going through a tough time in business dealings with another vendor. I felt for this person and the unpleasant situation. I inadvertently became a sounding board, and realized quickly that I was getting pulled into a drama over which I had no control. A lot of my time was spent listening and replying to emails, but I also gave advice, did research, wrote up tutorials, conferred with my team, did tech work, and had our programmer donating his time to help this client out as well. Our hours spent “helping” – before ever getting a signed agreement – started really adding up.
Is this time billable?
The answer is, it should be. The only reason it’s not is because there is no signed agreement in place. Time spent working with a client – time that you cannot bill for – is called the Good Faith Fund.
There is a certain amount of time that you inevitably spend with a client prior to signing them. You’re getting to know each other and learning to trust and like each other. Each client relationship takes different amounts of time to build, and it’s mostly always time well spent. However, there is a point when the Good Faith Fund is used up and then it’s either we need a signature on the dotted line and we start billing for our hours, or it’s time to part ways.
I guess I’ve been lucky – I’ve not often run into problems like this before. With a couple exceptions, most of my clients have been respectful of my time and I’ve not had to consider this issue. In this situation, the client’s deadlines did not fit into our schedule so I had to turn down the work. I never had to have the Good Faith Fund discussion. But in future, I’ll know what to do.