Archive for July, 2010

 

Are You Shortening Yourself at Work on Your Invoice

If You Sell Your Services, You’re Getting Paid Too Little

If you sell services, you may be working for free. When I’m working with self employed business owners who sell services, I nearly always find that they are not billing for some part of their work.  That is, their invoices are missing what they could get paid.  These lost billings can be the difference between making a living and having money for business and family security, expansion, and retirement.

Here are the major ways self employed professionals and contractors are losing money in their invoices:

Not writing down your worked hours daily. Lax time tracking leads to missing dollars on your invoices.  If you are charging time and materials, your customer has already agreed to pay for this time.

Not billing quickly for work completed. When you wait a couple weeks to invoice, the ‘newness’ has already worn off of the wonderful job you did.  This leads to customers questioning the invoice more often, leading to slower pay and sometimes challenging the invoice.  Either way you’ve lost money.

Missed additional services. When you hear your customer say, “hey, could you fix this thing over here…”, that’s the sound of appreciation and opportunity.  If you discuss the additional cost as soon as the customer makes the request, their most likely response will be “That’s fine.”   If you wait till you later invoice, or worse yet miss it, you may be losing money on your invoices. Extras clients most likely knew they would pay for but now assume they won’t because you didn’t mention it at the time.

Multiplying these issues with employees. If you miss invoicing opportunities on our own work, I guarantee your employees are too.  They follow your example, pay less attention to the money than you do, and generally get paid by the hour (sometimes even if the customer did not get billed for that hour.)

When my clients find, systematically reduce, and capture these lost billings they find the money to build operating reserves, pay themselves more, build expansion funds, and increase their retirement savings.  This often happens without working extra hours. In many cases it also saves time.

So how do you do it?   That’s the part that takes a little time, thought, and process.  Here’s one new solution that I’ve seen work well.  There’s an iphone application that allows contractors to quickly build quotes either while on the customer site or shortly thereafter, such as during a coffee break.  This application quickly turns the quote in to an invoice after adjusting for the actual hours worked and materials used.  Thus both the quote and invoice can be done quickly, usually the same day as the job.  Since it is easy to add hours on the go, it can be quickly adjusted to reflect actual time spent.  Finally, since it is simple to use as well as economical, employees can use it as well.

If you’d like to discuss profits through better invoicing or to find other ways to build your own profits without working harder so you can build a healthier financial future, give me a call.

Now stop reading about Your Invoices and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.