
Ideal Practice
Ideal Practice
#67. What Should You Charge When Clients Cancel at the Last Minute?
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If a client cancels at the last minute, or worse, doesn’t show up at all - it doesn’t feel so great, does it?
And even when you understand why they had to miss, you can still be left feeling frustration, disappointment - or, if it happens often, even resentment.
And I know that's not how you WANT to feel about your work, or your client.
So what do you do? Do you charge them for that time? If so, how much, and how do you collect it?
I know this is tricky for a lot of you, so I’m going to walk you through potential strategies and options to manage those late cancellations in a way that honors the client and yourself, and protects your relationship.
In this episode, you’ll hear about 4 steps towards crafting your response for any time a client cancels at the last minute, or worse, doesn't show up at all.
Check it out.
~Wendy
xoxo
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Wendy Pitts Reeves, LCSW
Host, Ideal Practice
Private Practice Coach and Mentor
www.WendyPittsReeves.com
Wendy@WendyPittsReeves.com
You're listening to Ideal Practice, episode Number 67. And y'all, after we talk things through today, I've got a little exercise that I want you to do. So be sure to stick around for that, because we're talking about something I see a lot of you struggling with. And what is it? It's how to handle it if a client doesn't show up or cancels on you at the last moment. What do you do with those late cancels and no shows? Well, don't you worry about that for another minute, because I'm going to help you with that today. So stay tuned.
Wendy:Hi, I'm Wendy Pitts Reeves and, with over two decades of experience in the private practice world, I've built my six-figure business while learning a lot of lessons the hard way. This is the first podcast that shows you how to apply the principles of energy, alignment and strategy to build a practice that is profit-centered, but people forward. This is the Ideal Practice Podcast. Hey folks, thank you so much for tuning in to another episode of Ideal Practice. This is your host, Wendy, wendy Pitts Reeves, and I am thrilled and honored to be hanging out with you guys today. How are you? How are you doing? It's kind of a crazy day. I'm actually trying to get out of town, but I wanted to record this before I left, and it's been one of those weeks where every minute seems to be kind of full. You all know what I'm talking about. You just do the best you can to fit it all in, don't you? Yeah, I do, and I'll tell you what makes this worth it. It is such a treat when your clients, or the people that are in your orbit, let you know that you're having an impact on them. Does that happen to you, and when it does, do you notice it? Do you pay attention to it?
Wendy:Just this week, there was a moment with one of my counseling clients earlier in the week when I had someone that I adore, that I've spoken, I've worked with off and on for a good while and know her really well, and she looked at me after we had done some brainstorming around a solution to a specific problem that she was dealing with. She looked at me and she said I don't know if you have any idea what a difference you have made, and I had seen her through another situation a few years ago. So she said you know you've helped me in the past and that was great, but that's nothing compared to what I'm dealing with now and she said what was it? She said I just don't think you realize, just in the short time I've been coming this time, what an incredible difference you're making, not just for me but for my whole family through me. I just want you to know how like it's really something and we are all grateful. Like that's kind of how she was talking and she was.
Wendy:This is a she's a very serious person. Like she doesn't say things like that lightly and I was very conscious of receiving those words. Like I made myself just look at her, hear what she had to say. I actually put my own hand on my heart, which I think is kind of an unconscious move I make sometime when something really touches me, and I just said, well, thank you, I'm glad, that's good, that's what I want and, and it's an honor, when your clients do things like that for you or say those kinds of things for you, take it in y'all, take it in, don't blow it off, Because that's why you do what you do, and those moments will carry you through the days that are a little bit harder, okay, so let's get into this topic. Let's talk about a situation in your practice that actually is often a little bit harder.
Wendy:I decided I wanted to talk about this because this happened with me this week. Just this week I had a client who had scheduled a two-hour visit after our first visit. We met recently for the first time and it went great. I really like her, I think we're going to do some really good work together and I think she felt the same because she left that visit, went home and immediately scheduled a session for the next week. And I have in my scheduling tool when people go to schedule a session, they have an option of scheduling a standard. I call it a one-hour session, but you know what I mean 50 minutes, 55 minutes, whatever one-hour session, or they can schedule an extended like a two-hour session if they want. I started adding that because I had people asking for it and it's fine with me if that's what someone wants. So I do have people who will do that from time to time and actually recently I've had a couple of different times where people did that immediately after our first visit, which I love. It means that they're gung-ho, they're excited, they're feeling encouraged and they're ready to get into the work. I love that. That's exactly how I want it to go Well.
Wendy:That happened here and it was great. I was really excited about that. But this week, when it came time for that two-hour session, she ended up having to cancel at the last minute through no fault of her own. Someone, something had come up in the family that she needed to deal with. It was perfectly legitimate and it only it was about 15 minutes before I was supposed to see her that I got a text that she wasn't going to be able to come and could we reschedule? And she said I'm happy to pay a rescheduling fee, of course, if that's necessary. Hope we can. Hope it can work something else, something like that. Well, that was fine, and I, in that moment, had to make a decision about how I wanted to handle that. Well, when we finish today, or by the time we end, I will tell you what I ended up doing, but I want to talk this through with you first.
Wendy:Before I dive into the nitty gritty, the, the, the details about how I think about this, let me address one issue that often comes up, and that is the issue about insurance contracts and what you can and can't do if you have those. If you are in an area of healthcare you're a wellness professional that works with third-party reimbursement meaning you are a psychotherapist, physical therapist, chiropractor, something like that where you may have a contract with an insurance company that helps to cover the cost of a client's working with you. You may be concerned that you don't have much of a choice about how to handle these kinds of appointments or these kinds of situations. You may think there's nothing you can do about it, but that's actually not true. The only time I have seen there be an insurance-based block to this was in working with people who are on some kind of a Medicaid type of plan.
Wendy:Sometimes there are limits there about what you can and can't do, but in my experience at least of decades and I did, I did insurance-based practice y'all for a long time I have never, ever run across a commercial insurance plan that in any way in any way said anything about how I wanted to handle this part of our work together. Now, I'm not an attorney, I don't work in risk management etc. So I certainly encourage you to do your own due diligence. Of course, if you have any questions about this, pull out your contract and look at it, or call provider relations of any company that you contract with and talk to them about it, but I personally have never seen any traditional major commercial plan that says anything about this. What when they do come? Like there's lots of rules about what you can and can't do with an insurance company, but if they don't show up or they cancel the last minute, that's a whole different ballgame. So I don't think that matters. But if you're not sure, check Okay. So we'll just say that upfront before we even get into this.
Wendy:All right, let's talk about. I want to walk through three or four specific things to do, ways to approach this, ways to think about this, and I and for each of these I'm going to tell you things to think about and I'll tell you what. What I think is um is ideal and how I handle it, and my hope is that this will help all of you. Uh, because I? Well, because you need it. So the the first thing you've got to decide is what does last minute mean? What is a late cancel for you?
Wendy:For me, late cancel is 24 hours in advance, which is extremely common. Most doctors offices, most medical practices. That's pretty standard, and I think a lot of people are kind of used to that. A 24 hour cancellation policy is pretty standard, and what that means is if you have an appointment with somebody at three o'clock on a Tuesday, you have to cancel that before three o'clock on Monday to avoid a consequence, whatever that consequence is and we'll talk about that in a moment I have seen people who have a 48 hour cancellation policy, depending upon the type of service. It might be even a week out. If you're doing VIP day intensives, where they're going to be with you for an entire day and they've paid you a few thousand for that, you might require I don't know a week or two weeks notice. So what late means will be different for each one of you, but that's the first thing you've got to figure out.
Wendy:What does late mean in terms of a late cancel? The second thing I want you to figure out is how specific do you want that to be? How hard do you want that to be? And and uh, or how, how strong do you want that boundary to be? And I? The reason I want to say this is because so my policy for forever has been that I need people to cancel 24 hours in advance. That said, I actually don't care that much If they cancel 23 hours in advance. 22 hours in advance, right.
Wendy:What I would always tell my people was yes, it says 24 hours in advance. I'm not super stickler about that in a literal sense. What I really just need from you is to cancel the day before. And I said to them I say I've said this forever, I need you to do that, because if I don't want to come into the office tomorrow, if you're not going to be here and I hate to show up for an eight o'clock appointment, who has canceled overnight? And I didn't know about it. So I say 24 hours in advance, I mainly mean the day before. Okay, and I will say sometimes, you know, even if you cancel in the evening or whatever, it's my job to kind of check the calendar, check my emails, just kind of make sure everything's clear for the next day. So I don't really worry about that too much. But it does have to be the day before, or if it's the day of then we're going to handle that in a different way.
Wendy:So first of all, decide what does late mean for you? Second of all, decide how, how solid do you want that boundary to be? I myself, I had a family member that was seeing a therapist at one point who was a real stickler about this. She had a 24 hour cancellation policy and if you canceled literally on the hour, if you had a four o'clock and you canceled at four o'clock the day before, sometimes she would charge you for that full fee, like she was really a stickler about it. I didn't like the way that felt. That's why I don't do it that way. I'm kind of like you know, give me a little bit of wiggle room here, just not too much. So that's the first thing to figure out is what does late cancel mean to you? And secondly, how firm do you want that boundary to be? Is it literal or is there any space on either side of that boundary? That's the first thing.
Wendy:The second thing you've got to figure out is what's? What will you do with that? What is the charge, what is the fee that you're going to charge for this? And I'm going to put this out there right now. Get this out front, and some of you are not going to like this. Some of you are going to be nodding your heads and saying, yeah, it's about time.
Wendy:Personally, I strongly encourage you to charge your full fee. Your time is worth what your time is worth Y'all I have and I and I say this with love and compassion, because I know that a lot of you have different situations here where you might say some of the things I've seen people do is they'll say you know, I'll charge 50% of what my fee is, or I'll charge $50 for what my fee is, I'm kind of flat rate. I personally think that that is a disservice to you, because your time is worth what your time is worth and it does not lose value because somebody cancels the last minute. All right, so I personally would hold the line on that. I've also seen some of you say I will charge them, but if they can reschedule within the week, I don't. Or if I can find somebody else for that time, I won't. And that also does happen Just this week, when I had that two hour cancellation at the last minute.
Wendy:I forgot about it at first, but as I was sitting there thinking about what to do about it, I remembered that just the day before I had had someone who had said if you have a cancellation, let me know. I'd love to come in or I'd love to see you, even online, and I did actually do that. I reached out to that person and said, as it turns out I have. I have an open hour. I hadn't planned on and we were able to schedule it. Some of you will say if I can fill that time, I won't charge them personally. I don't do that again because your time is worth what your time is worth. That's the first thing.
Wendy:The second thing is anything you do that makes this more complicated is harder on you and it's going to be an energy drain. So if you've got a last minute cancel let's say somebody has an appointment at one o'clock on a Wednesday and they can't do that, okay, and they cancel six, seven PM the night before and you get a text or an email that they're canceling. It's inside the 24 hour window or whatever the wind, unless you've got something different. But let's assume you've got a standard policy it's inside that window and you might say if I can find somebody to offer that time to you know it'll be okay. Or you might say, well, if you can't come tomorrow, as long as you can come today it'll be okay.
Wendy:But now what happens when you do that? What that means is you have to scramble to find somebody else. You've got to think who else is out there that might want this time. Who else has told me they might want a time. You have to turn around and send out emails or texts to other people at the last minute, trying to scramble to feel that time. That's one thing. And even if you don't do that, if the whole thing about they might come the next, like a few days later in the same week, that still throws your schedule for that week because you had not planned on that either. So your whole schedule kind of gets tossed up in the air. If you're okay with that, that's fine. This is totally a matter of personal preference. So goodness, like there's no judgment from me on this. If that's how you like to do it, that's fine.
Wendy:I personally don't like to do that. I like things to be clean, clear, simple, and personally I think our clients do better when it is clean, clear and simple. So my recommendation is that you have a 24 hour cancellation policy at least. My recommendation is that you're not super strict about the exact 24 hours, but that there's a little bit of leeway there, but just a little bit, as long as they tell you the day before. And my recommendation is that you're. It's really simple. If they cancel at the last minute, it's full fee. They will be. They are responsible for that full fee. That's the first batch of information you've got to figure out. Okay, you're with me on this so far. So we're talking about your policies, getting your policies clear in advance, and now you know what I think about that. The second thing is to think about kind of what your rules are, about how you want things to go when this does happen. So not just your policies, but your process, how you're going to enforce this. My recommendation is that when this happens, that they must do it, that they must pay that fee, whatever you decided is before your next session.
Wendy:I have gotten myself into trouble a long time ago. I don't do this anymore, but I have gotten into trouble when I let someone quote get away with this unquote for one session. We go ahead and we meet a few times. They know they still owe me that, but they haven't paid it. They either never paid it or eventually, before you know it, it happens again. And now they owe me for two and all of a sudden something gets messy again. It's so much cleaner and so much clearer If you have a really clear policy that says here's how it's going to work If you cancel it this time or later. Here's what the fee will be and here's what is required. They really need to pay that before they see you the next time.
Wendy:Now, if you, as a lot of people do, keep a card on file for them and I think that's a great idea you can literally just go ahead and process that card that day. I do know many of you do that and my you know. Hats off to you If you're. If that's if you've already got that in place, that's great. But if you don't have a card on file that you can process, then you have to text them or send them an invoice or an email some way. That says dang. I hate that this happened, but you know how it is. Of course, you'll have to. You'll need to cover that time. The fee is this and we'll need to get that from you before we meet next time.
Wendy:How would you like to take care of it? How would you like to take care of it? Would you like me to send you an invoice? Do you want to just mail me a check? Do you want to drop by the cash? Whatever you want to do, how would you like to take care of it? So, figure out what your rules are and how you're going to enforce this. Have all of this decided in advance. When you've made these decisions in advance, it's much easier to know what to do when this happens.
Wendy:The next thing I want to say to you about this so I want you to figure out your amount. I want you to figure out how, like how you define a late cancel. I want you to figure out your rules. And in terms of the rules, one more thing about that you are welcome If you want to have a reason for when they cancel, like I have some people who will say 24 hour cancellation. Or in the case of illness, for example, like you know, somebody comes up sick in the middle of the night or whatever. I don't want them to come in and see me anyway. So that's fine, you can totally do that. I do have a cautionary note about that that I'll explain in a moment.
Wendy:But so figure out your kind of the details about how and when you want to enforce this, and then then you know what you have to do. At that point, the main thing you have to do is keep your word. This is what it means to act with integrity as a practice owner. It is. This is also what leadership looks like, and y'all may not think of this this way.
Wendy:If your policy is X and you don't enforce that policy, you are not keeping your word. You are not acting with integrity. You have said your policy is one thing, but you're not following it through. That's just like a parent who tells a kid that there are certain consequences if certain things are wrong, that there are certain consequences if certain things happen, and then they don't follow through with those consequences. Well then nothing happens. That what is? What does that kid learn from that? And I'm not saying that your clients are kids. They're not. Please don't take me that way. I mean absolutely no disrespect. I mean that boundaries serve a purpose.
Wendy:I mean that policies are in place for a reason and I, if you all have been following me for any length of time, you know I feel really strongly that this is a therapeutic issue as well. What you will find when you enforce a clear, fair Policy and to me everything I've said today is completely fair your clients will understand it, they will respect it and they will follow it my clients, if they do have to cancel the last minute for some reason which hardly ever happens. But if it does, they will say I know you've got to charge me, that's fine, I'll see you next week, like it's. Like it's just nothing, it's, it's not an issue at all. So when you have a clear policy that is in place and you hold to it, it really kind of becomes a non-issue. That's the cool piece of this from a financial perspective and from an energy perspective. You get paid, you do not lose your time and the energy is so much easier. There's nothing to be anxious about. Like people, everybody kind of knows what the rules are, and it's so much better.
Wendy:Now I know that this is hard for some of you and I do want to offer you one idea to make it just a little bit simpler. Oh, wait a minute. Let me, before I go there, hold on One thing. And one other thing I want to say about the beauty of enforcing a regular policy like this is Not only is it better for you financially, not only is it better for your business from an energy point of view. This is so much easier. It's also better therapeutically or clinically, because you know what's gonna happen when people know that they're gonna have to pay if they don't come, they're much more likely to come, which means they're gonna show up to do the work and they're gonna get better. It means they are much less likely to cancel for frivolous reasons. They may still have to cancel sometime for important reasons like being sick or a flat tire absolutely, but they are much more likely to do their best to get there and that's going to serve them Right. I know you get that. So there are a lot of reasons why I think it's extremely important to have really healthy boundaries and policies around this particular issue.
Wendy:Now I want to offer you what I call a spoonful of sugar. Yes, I am a hardcore, long-time Mary Poppins fan. I love Mary Poppins. That's like my favorite movie of all time. I don't care how old I am. It will always be my favorite movie of all time. For all kinds of reasons and Some of you who know that show you just you've know the song a spoonful of sugar who helps the medicine go down.
Wendy:Right that, when you have to say something that's difficult or you have to enforce a policy that you're feeling bad about, a spoonful of sugar can help. Well, what does that look like? For me, most of the time, what that means is I will, in the moment, like the first time this happens with somebody, whatever the reason is, doesn't matter what the reason is. I will say something like you know what? It's the first time this has happened. I tell you what. I'll let you off the hook this time, but just this time. If it happens again or the next time, I will have to charge you, and and what do you think? The responses? It's always oh, thank you. I appreciate that so much and I mean it. I don't mind it. It is the first time, it's okay, and I also mean the next time I will have to charge. It's such a non-issue, right, because that feels good. That's very helpful. It kind of gives everybody a chance to get used to the system. It's a little bit of grace in the moment, which is really nice, and it still holds that boundary in place, right.
Wendy:Another way, I saw someone do this just recently. Actually, I had one of my own coaching clients who was telling me that in her practice, what she's instituting is the concept of a waiver. So when and her prices are premium level prices people pay a lot of money to work with her, which I love, and they don't mind because her work is exceptional. They get really great results. It's worth every penny. But because it is a major investment, she offers them two quote waivers a year and what that means is from January to June, for six months of the year they can have one late cancel or no show. Same thing for the second half of the year. They are forfeited if they're not used right. So she's just kind of building in the grace, in a way upfront, and letting them know about that. I love that. I think that's very creative, I think that's fair and that is also clear and easy to implement. So I want you to notice what I'm doing here. I'm wanting you to do this in a way that makes your life easier, because everybody kind of knows what the rules are, everybody understands them, everybody stands on them. So I think you will be surprised at how much better you feel when you can do it this way.
Wendy:Now let's talk about a special case. What do you do when somebody really does have like it's a legitimate issue and maybe it's the third time it's happened? I worked with a client at one point who often had migraines and got a fair amount. It was a real complicated kind of medical situation. I did not enforce this with her for a long time because I was really sympathetic to what she was dealing with. Physically she could not help it. I understood that.
Wendy:But what that meant was she missed probably a third of our scheduled sessions and the day came when I'd been seeing her for a good while like I wanna say, maybe a year, I don't know, I've forgotten. Now it's been a while when I just could not afford for that to keep happening and I sort of felt like if it was gonna be a rough day, there was. She often kind of got clues the day before or the evening before in one way or another. So the day came when even then I had to say I've got to start charging for this. We can't keep doing last minute cancels. So what happened? She showed up more often. Things got a little bit better and when she really couldn't show up, she understood what I had to do. So we still had a mutually respectful and great relationship. It was fine.
Wendy:I won't say it was easy, but it was good and it was right and she understood. And what does that do for me? It meant that I felt better about our work, because if somebody's missing a third of their times with you, it's easy to start feeling a little bit resentful about that, right, and of course, that's going to impact your work as well. So, spoonful of sugar, give them a break, but give them a break in a very conscious and intentional way. So think about that, okay.
Wendy:One other version of grace here that I will add to this is that if you have to cancel on them at the last minute, well, you too should have a consequence. So there are lots of ways to handle that. It could be that you give them another session for free, which is kind of your version of paying for that time. Right, you could totally do that. There's probably other things you can do, but that's the first thing that comes to my mind. So, to sort of pull this together, if you're following me, decide what a late cancel means. Define it. Decide what your fee is if someone does cancel. Define it, and you know where I stand on that. Decide what your enforcement policies and procedures are going to be around that. How will you collect? When will you collect? What do you require? What are the boundaries? And I told you what I think about that. Then act with integrity. Keep your word. Be someone that they can trust to do what you say you're going to do by enforcing those policies and then, when you need to, you can extend a little grace, have a spoonful of sugar with a couple of different options which we talked about as well.
Wendy:So does that make sense? Are y'all with me? Are you feeling good about this? Are you feeling uncomfortable about this? I'd love to hear from you kind of what you think and if it would help you. Here's where I want to tell you. I want to suggest an exercise for you. This is going to show you something. What I would like to suggest is that you go back over the last six months, whatever time you're hearing this episode, look at your appointment calendar for the last six months and count how many times has this happened. I hope you've marked this. Do you mark these appointments as a no show or a late cancel in your notes or on your calendar? I hope you do. I do. If you don't, you might want to start with that, but hopefully you can go back and look at the last six months at your appointment calendar and go oh, had one there, had one, there had one there. Count how many times has this come up? And I'd like to know has it happened more than once with any particular client, because that's a bit of a red flag that there's a therapeutic issue there to deal with which we can talk about from a clinical perspective. But I just want to look at it from a financial perspective as well, because they're intertwined y'all. They're always the same thing. So here's what I want you to do. Thank you, add those numbers, those sessions up, count them.
Wendy:When somebody canceled the last minute or no showed on you, did you collect for that time in some way and if so, how much Overall for X number of hours that were missed, whether it was a late cancel or no show for X number of hours, what did you actually collect for that amount of time and what did you actually lose for that amount of time? So, just as an example, if your rates are $100 an hour and your policy is you charge 50%, that means maybe you collected $50 for those hours. I don't know. If you charge $100 an hour and your rate is a hundred, your no show and late cancel fee is $100 an hour. Hopefully that's what you collected. If that's your policy, but you're really terrible about enforcing it, maybe you didn't collect much at all. I don't know. I don't know, but do the math, figure out how much you brought in, how much time did you lose in literal hours? How much did you collect for those hours and how much did you lose for those hours?
Wendy:And the last thing I want to ask is how much would you have collected if you had charged full fee? And you want to take it one step further how would it have impacted the work if you had done that as well? For most of your clients, it won't impact it at all. They'll just pay and they'll show up the next week and everything will be fine. If you do have a few who tend to do this more often, my guess is you'll find that they don't do it as often. They show up more regularly, and that's good for them as well as for you. So I hope this is helpful. That's what I've got for you today. I hope it gets some wheels turning for you.
Wendy:I would love to know what your takeaway is from this, and if it makes some of you a little bit angry or a little uncomfortable, that's okay. I part of having an ideal practice is designing something that works for you. So you do. You design your practice the way you want to. I'm sharing with you how I do it and why I do it.
Wendy:A certain way, as far as the client who had the two hour session, I told you I would explain that back, tell you what I did about that. Come back around to that. Well, a two hour session is a lot of money and I had two points of view about this. On one, that was a lot to ask her to pay as a last minute cancellation. I felt kind of bad about that. It was also a lot for me to lose as a last minute cancellation. Felt bad about that too, right? So I did my own version of a spoonful of sugar. I charged her for half that time, which is actually more in keeping with how I would normally handle things. She did get a little bit of grace and I still held a boundary, right. So that's my two cents about this.
Wendy:Hope it's helpful for you. I would love to hear from you what you think about all this and I hope that this is helpful for you in all kinds of ways. All right, have a great week, everybody, and I will see you next time right here on the ideal practice podcast. Bye now, hey y'all. Do you ever get overwhelmed with what you're doing, get overwhelmed with all there is to do to grow and manage your private practice. I know there are a ton of things fighting for your attention taking care of clients, keeping up with the billing, much less sorting out your marketing, and all of that you name it. It's a lot.
Wendy:So, gosh, how do you know, like, what to work on at each phase as your practice grows? Well, I've got you covered. I've put together a little quiz, a tool that will help you take stock of your practice as a whole, and when you complete it, you will know exactly what to work on next. It's based on my proprietary framework the seven pillars of an ideal practice. This really quick and easy process will guide you through a series of questions that will help you identify for yourself where your practice is solid and where it might need a little work.
Wendy:I call it the IP 360 scorecard and, honestly, you can finish this in less than 10 minutes. Not only that, but once you've completed it, I'll also send you some guidance on how to think about your scores in the context of which phase of development your practice is in. And, the best part, it's completely free. When you go to my website windy pits, reeves dot com forward slash 360, three, six, zero the numbers. You'll find a complete description of the scorecard and how it's going to help you. And from there, guys, it's just a simple click of a button or two to get your own. So go get your copy today, complete it, fill it out and figure out where your practice is ready to go next.