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Invoicing, how much do you tell them?
Just give them the bottom line mate. There’s no reason to be too transparent.
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12 Replies
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Hi Gary,
I am new to the sign business but have worked in print/design/web for a a while now. I started off by not indicating material (print) and labour seperately, many of my customers just wanted to know how much it was costing. So, I built in a markup for the print and then time for print management (proofing, signing off, delivery if local) and then how long it took to deisgn.
However, now with tax implications I tend to seperate the costs: print vs design. I have even got to the point where I charge a higher rate for design and take a smaller cut on materials, this way I can design, bill it. Print, bill it. This way cashflow is spread (many of my larger clients insist on 60 days or they won’t use you!).
As far as signage is concerned I will be billing for design (invoice on sign-off) and the rest (materials, markup, time) on delivery. I am always a little confused about deposits, ok with smaller/one offs but with my larger clients I tend to just bit the 60day bullet!
Anyway, this is how I tend to do things.
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This reminds me of a friend who 10 years ago was working as a self employed decorator he always used to charge his customers £75.00 A day + materials his customers excepted this as a reasonable days pay at the time for a skilled decorator and would not have paid him much more on a day rate basis He was always busy but was never going to earn more than £450.00 a week for 6 days work.
The material s were always a fairly low percentage of the overall job price
(similar to vinyl work and signwriting) But his customers had this perceived value based on his day rate.Take off his advertising costs running costs of his van time in the evenings doing estimates seeing jobs accountancy fees ect ect … well you get the picture he may as well have worked for a company he was getting by but only just.
My advice was simple quote the jobs on a fixed price he had the experience to judge how long the job would take him so he worked that into his price at £150.00 a day + materials. And quoted the job on a fixed price. this also gave him the opportunity to adjust his prices in slacker times and quote profitably when the going is good adjust prices for more affluent customers and reduce them for people who weren’t so fortunate.
He hasn’t looked back literally overnight he doubled his income now employs 4 full time staff and plays Golf religiously on a Thursday,
What im trying to say Gray is I don’t think giving a detailed breakdown of costs before or after a job is done is to your advantage If you quote A job and its excepted why tell them after its done on your invoice what your profit was ( labour ) what they don’t know wont get there back up
after all if you buy fruit in a shop when you get to the till the receipt doesn’t tell you how much the farmer got how much the cashier is on and what the store manager, cut was. you see the price on the label and you pay your money.well that’s my theory ill stop rambling now ….zzzzzzzzzzzzzz time for bed
Regards Neil…
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Thats what I meant as well Gray,
One of my dad’s sayings is ” Profit is not a dirty word…” You don’t have to let people know what you make. Have a sliding scale of charges depending on who the customer is. This week I security tinted a little old lady’s place and gave her a 20% discount, felt good about it.
Today I’m pricing on a job for a large Company who I’ve done jobs for in the past and I’m making 200% markup on materials plus increased labour rates. This company doesn’t think twice about making as much as they can out of everyone I don’t feel bad about it at all.
By the way the little old dear (84 years young) got her all of her windows cleaned inside and out, and some bits moved around.
Mate, I know you have strong moral convictions but play it a little close to your chest.
If the customer accepts your quote then the invoice should reflect just that.
That’s me off my soapbox…I’ll get back to work.
Cya
Lee
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Essentially , one should charge what the market can bear for your services and products.
I think your break down is telling the client too much , you should charge for the job as a unit and bill accordingly – in your “private” version of the bill , you can do the breakdown for your own information.
I wouldnt even show materials an labour as a 2 items , just the totals.
Of course it depends on the nature of your business on how you itemise things – we do multiple services and often one job is a combination of various items , so we do itemise these but will do it like this:3 signs @ $xyz
4 awards @ $efg
Etc Etc.What we do do is enter this into our computer system with far more extensive descriptions so we can look up exactly what was done and costing at some future stage.
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I think you’ve had some good advice there Gray, One thing i’ll say the name of the softwear you use for invoicing “MYOB” take it as “Mind Your Own Business” when refering to the break down of costs involved.
The only time i ever show labour charges is if its a job i don’t want to mess about fitting then i will give a fitting charge seperate at a largely inflated price, hoping the customer will DIY
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quote :The only time i ever show labour charges is if its a job i don’t want to mess about fitting then i will give a fitting charge seperate at a largely inflated price, hoping the customer will DIY
You beat me to it! That’s exactly what I do too. Any awkward fitting is very profitable, farmed out or handled by the customer.
On most Invoices I will break down what they have received to *enhance the value, but always quote a combined price where possible.
If their getting BS88842 7 year Full Gloss Exterior Grade Super Dooper Viny,or 100% cotton, PremiumQuality Heavyweight T’s……..I tell em! (:)
If I’ve priced the Artwork into the job and delivered for nothing I tell em that on the Invoice as well. ……..’FREE ARTWORK & DELIVERY’ (:) (:)
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Hey Lorraine, that’s exactly what MYOB stands for. Clever name huh?
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Glad to be of help Gray
discussion stimulates the creative juices, Martins point on FOC is a great way in getting your customer to realise just how much time and hidden effort has gone into the process in manufacturing there signs and its a nice touch at the end of an invoice to see something for free its just good marketing making the customer aware and added value.there is nothing like stating the obvious it reminds me of a story of two diners either side of the same Desert highway in the States.
One always seemed to be busier than the other it wasn’t that there was more traffic on one side or that the appearance of the diners was any different both had signs out side offering food and drink and it puzzled the owner of the quieter diner for years why he wasn’t doing as well, one day he was so fed up he saw a car who was going along on his side of the road do a u turn to visit the dinner on the other side.
He ran across and asked the driver Why had he gone to the other Diner The Guy said well I’m real thirsty at the moment and I saw the sign that said Cold Drinks and that’s why I pulled in here The Diner owner who also sold cold drinks but who’s sign stated just Drinks altered his signs the next day and saw A marked improvement in trade instantly.
Neil..
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I used to be very detailed when invoicing
but now simply keep it very brief indeed especially if I have already quoted for the job.Why go into the nitty gritty? In fact you could lay yourself open to the customer asking questions.
Imagine putting down something like ‘3metres of vinyl @ …’
when of course its got nothing to do with the amount of vinyl you use, rather your expert use of this medium.Like the rest I make sure the fixing charge is down there. And as already mentioned if you don’t fancy doing the fixing put an inflated price down, one which will cover a sign fixer doing it and you still ending up in pocket
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Gray, is there a way you can turn features on and off in MYOB.?
I use Quick book Pro for my invoicing and this is quite good at working, it seems similar to MYOB where you have your materials with prices entered into the system and if you want say 2 mtrs of vinyl you input this and it gives you a price.
In quick books I dont have to show all this detail in the invoice so I can work out a price by entering all the materials + labour etc but the customer doesnt get to see this, all he gets is a price for whatever job we are doing ie: 1 x sign @ 1mtr x 1mtr two colour vinyl, supply only £XXX etc. If I am installing I dont even give a price for labour unless the customer asks or like some above I dont really want to do it and them I will put the installation costs seperatly and wind them up a little, don’t do this very often though because we need all the money we can get at the moment. -
No problem Gray, glad I could help, I thought it might be similar to quickbooks, most of these account packages have similar functions.
I use about three different styles of invoice depending on what job I am doing, I think two of them were standard templates and the third was one I custom made. Although I use three different invoices they all have a similar layout and all are instantly recognisable as Kingdom Signs invoices so the customers dont get confused. -
Except in very special circumstances they get the total only. Too much detail is just giving them ammunition to haggle over details.
We also use MYOB in exactly the way Gray and Martin are discussing. We have the details for our own information, but the customer doesn’t see it.
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