Creating an invoice for the entire project seems like it is the simplest way to track payments and have the current balance. The harsh reality is that if all of the work is NOT done, accounts receivable is reflecting a balance due that is NOT REAL. Without proper tracking and matching of income and expenses, most construction companies never know if they made a profit until the job is over.
However, due to your work’s nature, as construction contractors provide services on a per-job operation, issuing invoices make it all the more challenging and difficult than it has to be. The good news is that it doesn't have to stay that way. Consider the following invoicing errors contractors make and take actionable steps on how to avert them.
You and your entire staff need to stick to a single standard invoice template that everyone will use throughout the job transaction. Not only will this make your paperwork look professional, having a uniform appearance gives your company credibility and integrity. Your client will appreciate how clear and straightforward it is to understand and check the payment details. A confused client will ask more questions that could’ve been avoided if accounts are itemized and charges are explained.
Terms and conditions of payment should be discussed before starting a project. When a system is in place, it seems effortless to remind a client regarding prompt disbursement of money. Whether you incentivize with discounts for early payment or penalize for paying late, it all starts with formal documentation as agreed upon by both parties. Relying on good faith alone won’t pay your bills especially when you’ve completed your service on time.
Knowing when and where to send the invoice is an essential part of the procedure that changes with each job you take. Eliminate any confusion right from the start by taking note of the payment terms you’ve made, the company name, department, or contact information you are directing your invoices to.
Failure to back up and save copies of invoices invites trouble and disaster. Maintaining an accurate and up-to-date record of issued and paid bills will keep you from stress in the future. Use a numbering system to track and manage your invoices efficiently, this will save you time when you need it in case of customer disputes, pending accounts, and sending duplicates.
Human error, though inevitable, could at least be avoided in this case. Take time to develop specific rules and documentation for you and your employees to follow when invoicing a client. Investing a few hours learning accounting software is never a bad idea. You can start by asking your construction accountant to provide you and your crew with training and best practices so that everyone can deliver paperwork in accordance to your company’s standard.
As a reminder, billing your clients is dependent upon your signed contract and sending invoices is based on the details of this agreement. Preventing these errors will undoubtedly help in speeding up the process of you getting paid and more so, getting paid on time. If you don’t know what to do or how to start, I recommend our Contractor Bookkeeping Review and Consultation with Randal. It is one of the most sought out services we provide and have helped many small construction business owners across the United States.
To help with invoicing, Contractor Payment Application is also available in our store.
Helping Contractors around the world is one of the reasons we added the Fast Easy Accounting Store.com
Follow our blogs, listen to Contractor Success M.A.P. Podcast. We Appreciate Our Visitors, Listeners, and Subscribers. – Thank You!!
Please feel free to download all the Free Forms and Resources that you find useful for your business.
We are here to Help “A Little or A Lot” depending on your needs.
About The Author:
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 206-361-3950 or firstname.lastname@example.org
Download the Contractors APP today from the App Store or Android Store
Access Code: FEAHEROS
Simply scan the QR code or search for ‘MyAccountants’ in the App Store and enter the Access code: FEAHEROS to utilize the powerful App features and capabilities, and benefit from having our Construction Accounting App at your fingertips, 24/7."
PS: Even if you are not a Construction Contractor you will find a plenty of benefits in the app so we invite you to download it too! It's Free so why not?
When You Become A Client - Then we can tap into our resources of knowledge and strategy banks. We use the reports hidden in your QuickBooks in order to diagnose and understand your construction business and develop plans and help you implement a path to success for you and you alone because every contractor has unique Strengths, Weaknesses, Opportunities and Threats (S.W.O.T. Analysis) that when understood can lead to a Strategic Roadmap which cannot help but make a lot of money.
We Remove Contractor's Unique Paperwork Frustrations
For Construction Company Owners who do not need the full power of a QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online, and we have a custom setup for construction companies. Click Here For More.
This Is One More Example of how Fast Easy Accounting is helping construction company owners all across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that, and a lot more valuable to people like you so stop missing out! Call Sharie 206-361-3950 or sharie.com and schedule your no charge one-hour consultation.
Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time, and now you know about it too!
Thank You For Reading This Far, And I Hope You Understand we really do care about you and all contractors regardless of whether or not you ever hire our services.
We Scan Your Receipts, And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.
Our Contractor Bookkeeping Services System Is A System
Thinking About Outsourcing Your Contractors Bookkeeping Services To Save Time And Money?
Click On The Button Below To Download A Free Guide
Need Help Now?
Call Sharie 206-361-3950
We Are Also Xero Accounting Experts Specializing In Construction Bookkeeping Services
PS: For The Do-It-Yourself Construction Bookkeeper Our Store Has Chock-Full Of QuickBooks Setup Templates, QuickBooks Chart of Accounts And More.
Most Contractors Setup QuickBooks Desktop Version In One Of Three Ways:
#1 EZ Step Interview inside QuickBooks Setup
#2 Asked Their Tax Accountant To Setup QuickBooks
#3 They Attended A How To Setup QuickBooks Class Or Seminar
And QuickBooks Does Not Work The Way They Want It Too!
Download the Contractors APP today from the App or Android store