To Charge or Not To Charge

I did some work for a client last month who had a nice size F & B minimium to play with. Or rather I had a rather large size F & B minimium to play with.  We fed and watered the people all day long.  All of the guests of this high income group enjoyed themselves very much and no one wanted for anything. With all of this being said and done WE WERE STILL short a couple of thousand dollars of the minimium at the end of the day. Sally (that is what we will call this client) called me to discuss.  Sally received the invoice and of course she had to pay the  shortfall difference. That wasn’t the issue. What was the issue is that she was charged tax and service charge on monies that she technically didn’t use. Right or Wrong?

Personally, you have a couple of options.  FACT: This group meets every year at this facility and the F & B miimium is a nice chunk of change for this facility for the day.  One direction is to take the extra money pay it and roll it into next years contract is one scenario. If you are a loyal customers most facilities are willing to do that.  Second and I have done this with many clients – is make the difference up in alcohol. Even though TECHNICALLY this is against the liquor liscense they will do it and the client will use the bottles of wine to give out to clients throughout the year.

What do you say to your client in this scenario.  This particular client had a lot of coffee breaks on consumption for 800 people throughout the day. They had approxiamtely 200 people no show so you need to allow for that in the original figures.  We budgeted for the no shows and that budgeted money is what lead to the shortfall.

Back to the original question about tax and service charges on monies not spent.  RIGHT OR WRONG? I don’t have a legal answer on that and am investigating. What I think is the correct answer is tax needs to be paid because facility is receiving income from you so that needs to be taxed. But nothing was served so the service charge should be mute.  If any of you find yourselves in this situation make sure you note on the contract that you will pay taxes on attrition not pay service charge.

That is my story for now and I am sticking to it.

 

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