At one point in every event planner’s career, there has been the situation of receiving a final invoice from a venue with added costs that were never included in the budget. This refers to power costs, internet costs, extra catering labour costs, and so on. This is especially problematic when a third party such as a DMC has given an inclusive price to the client and must absorb the extra costs or an in-house planner must go back to their client and advise them the costs are unexpectedly higher.
Why does this happen and how can this be avoided? First of all, it is a matter of educating the venues on how the budgets are prepared. As a third-party planner, I always advise the venue that I am submitting a budget to my client that must include ALL potential costs, including power, security, cleaning, set up and tear down.
The venue needs to advise which costs are fixed and which are variable. Security, for example, would be a variable cost as the final price would depend on when the event ends. If the guests are enjoying themselves and the client/planner approves a later closing time, then additional costs will apply, such as for security, beverages, catering labour costs, entertainment costs, and so on.
When submitting a budget to a client, I always indicate which are fixed costs and for those that are estimates that may increase, I also include their hourly costs. I review the budget with the client and discuss the possibility of additional charges so that the client is well informed as to the possibility that the budget may increase.
For host bar costs, there are venues that quote a per-person price, regardless of the amount consumed. This is especially advantageous when producing a charity event with a reception, dinner and an after party. You know what the costs will be upfront and can adjust the admission ticket accordingly. The other option is being invoiced based on consumption, at which time I advise the client that the cost is an estimate only. For a standard one-hour reception and seated dinner, I usually estimate two drinks for the reception and half a bottle of wine per person, unless the client advises me that they are large consumers.
If the client is very budget-conscious, I ask the venue to give me notice if we are reaching the estimated budget of wine with dinner. We can then slow down the pouring of wine. Another recommendation is to pour one glass when the guests sit down and then return to pour a second glass but not keep continuing to pour unless requested by the guest.
