How to Create a Company Cancellation Policy [Template + Example]

With a well-written customizable cancellation policy, you can avoid losing up to $26000 per year on missed appointments.

When clients cancel a scheduled service appointment right before your team sets out to perform the required task, you'll most likely lose the opportunity to attend to another customer who's ready to pay for your services.

If you're in the services business, you'll need to create a professional cancellation policy that informs clients about your cancellation processes and requirements. While you might not know how to go about this as a business owner, here are some samples you can customize for your contractor business.

Table of Content

1. What Is a Cancellation Policy?
2. 4 Essentials for Company Cancellation Policies
3. Cancellation Policy Examples
4. When to Inform the Client of Your Cancellation Policy?
5. When to Charge a Cancellation Fee?
6. How to Prevent Cancellations?
7. FAQs
8. InvoiceOwl Can Help Your Financial Management

What Is a Cancellation Policy?

A cancellation policy is an official statement usually included in the terms of service that details why, how, and when a client can cancel an appointment or service subscription with or without penalty.

4 Essentials for Company Cancelation Policies

Every effective cancellation policy should include these four critical components to protect your business and set clear expectations with clients.

1. Define a cancellation widow

Ensure you include a timeframe when clients can cancel an appointment or service without a penalty. Feel free to determine what works best for you but for most businesses, a 24 to 48-hour bracket after confirming an appointment or service should suffice.

2. Late cancelation fee

Determine how much you feel is fair to charge when clients cancel appointments at the last minute due to an unavoidable emergency.

Depending on your business type, a flat rate may be ideal but you could also consider charging a percentage of the job. The most important thing is to ensure that it is clearly spelt out in your cancellation policy so your clients can refer back to it when necessary.

3. Service cancellation procedure

Ensure you have a standard set of procedures to help the client reschedule or cancel an appointment. Also, include your preferred contact method so clients can easily notify you of their rescheduling or cancellation.

4. Client signature column

Ensure you include your cancellation policy on quotes, estimates, and contracts so that clients can acknowledge or review it before signing an agreement.

This enables you to charge cancellation fees once they choose to break the agreed appointment terms and conditions.

Here are a few cancellation policy examples you customise for your business.

Cancellation Policy Examples

1. Short and clean cancellation policy

You can cancel the appointment within [48 hours] or less to avoid a .

Ensure you notify our team via as soon as possible to avoid the cancellation penalty.

2. A detailed cancellation policy example

Please note that cancellations made before [24 hours] would be processed without a penalty. But cancellations made less than 24 hours are subject to a charge of which includes instances where the client is unavailable or our service provider cannot handle a rescheduling request.

3. A professional and detailed cancellation policy template

Please note that once we've confirmed your appointment, we reserve time in our schedule to attend to you. But if you wish to cancel our appointment after [ X hours ], you'll be charged a cancellation fee of [$__ ].

To avoid our cancellation charge, we recommend you provide cancellation notice at least before your appointment.

You can reschedule or cancel an appointment by emailing us at or via telephone on .

When to Inform the Client of Your Cancellation Policy?

You should ensure that clients are aware of your cancellation policy before they book an appointment or request your services. Here are a few ways you can present your cancellation policy.

• Inform new clients via quotes, estimates, or contracts.
• Update your existing clients with the cancellation policy when booking a new appointment.

You should also send an email or text highlighting a change or update in the previous cancellation policy to ongoing clients.

When to Charge a Cancellation Fee?

Here are a few scenarios where a cancellation penalty is applicable:

• When the client doesn't turn up for their appointment or schedule.
• When you are unable to reach the client via the provided contact channels.
• When a client cancels the appointment beyond the cancellation window.

It's also important to note that not all cancellations should be charged a fee. You should offer a cancellation fee waiver when:

• You have not implemented recent changes in the cancellation policy.
• Clients follow the terms listed in your cancellation policy.
• Clients book an appointment or service before your cancellation policy is enacted.

Ensure you give your clients a full refund when you charge a cancellation fee in these scenarios.

How to Prevent Cancellations?

One of the best ways to help prevent appointment or service cancellations is to use a service that automates scheduling and appointment reminders. Most scheduling apps also support automated appointment reminder emails to help clients keep to their appointment. Some appointment scheduling apps also offer a cancellation fee email template you can easily customize while you set it up for your business.

To minimise cancellations, ensure you have the best software to manage your service estimates, credit memo journal entries, invoices, and purchase orders.

If you're currently searching for an app that can manage business finance effectively, you should consider InvoiceOwl.

InvoiceOwl Can Help Your Financial Management

InvoiceOwl is the leading estimate and invoice software for contractors that helps you centrally manage your business expenses.

With InvoiceOwl's sleek and intuitive user interface, managing estimations, invoices, purchase orders, and credit memos is a lot easier.

Get a FREE trial today, and build a strong clientele by lowering schedule and appointment cancellations.