Have you ever not charged a client for something you did, then wondered if he or she truly appreciated the value of your time? One way to make sure your clients understand what your time is worth is by issuing a no-charge invoice. "From a business standpoint, it builds goodwill to let clients know what you're not billing them for," says Charles Heid, a senior manager with Ernst & Young LLP.
Heid says you have several ways to approach no-charge invoices. You can issue a standard invoice, describing the service provided and showing its cost, then discounting the charge by 100 percent. Or you can mark the invoice "Do not pay" and charge the amount to marketing expenses. Another option is to simply describe the work done and print "No charge" in the price column, which would not affect your income and expense records. Or send your client a letter describing the work you did and what its value was.
Check with your accountant or tax advisor to make sure you handle the paperwork properly to avoid creating an additional and unnecessary tax liability.
Whatever format you choose, a no-charge invoice or statement can be a powerful marketing tool that strengthens your client relationships.