How well are your invoices working for you?
How well are your invoices working for you?
Many business people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Though the invoice comes down to a figure that is payable, those numbers are symbolic of value; those figures symbolize what your client expected to receive and if they are higher than what they expected to pay they will not be happy.
A friend hired a landscape gardener to tidy her garden. When she asked for a quote she was led to believe the job was going to cost around $400. However, when she received the invoice it was closer to $700; here is the detailed description the company provided of the work for which they charged her:
Landscaping works completed including: Full weed & trim gardens, removal ivy & trim back invasive creeper on back fence, cut back hydrangeas, deadwood & feed fruit trees, tidy miniature agapanthus, transplant agaves & miniature agapanthus is main garden, removed lavender, prepared soil for & installed client's own potted color, potted aloe vera, tidied spider plant & jade tree in pots, tidied pathway at letterbox, full fertilise all gardens, derris dusted cabbage trees, supply compost, fertilisers, derris dust, water retention crystals. Full load to tip. Day charge. Total hours 9.5.
My friend had no issues with what the company said they did, her issue was with the unanticipated expense. When she queried why the invoice was $300 higher than her expectations, here is the reply she received.
Dear L,
We had a phone conversation regarding the expected $ for the day. As it was a charge up (not based on the original quote), I stated an hourly rate of $38.50, plus materials and rubbish removal and that we have a day charge of $150 for an 8 hour day, which is reduced if there is less time on site. Basically is equates to $150.00 divided by 8 hours = $18.75 per hour. Times this by the physical time on the job (not by the number of crew hours) i.e: 6.75 hours (9-3.45) including rubbish removal time. So $18.75 x 6.75 hours = $126.55 day/overhead charge.
The materials and waste removal were quantities not known till the end of the job.
I hope this is clearer for you.
Kindest regards J
What???? How many times did you need to reread that to understand it?
Here are 7 ways this company failed to communicate effectively with their client:
1) They failed to make it clear that they planned to 'charge up' the work as they incurred costs.
2) At no time did they provide an estimate of how much these costs might be.
3) In their reply they focused almost exclusively on their hourly rate (their issue) when their labor charges were not the main issue.
4) Nor did they provide a relevant response -- in this instance the total hours billed for this job were 9.5, not 6.75 as explained in their email.
5) The reply was needlessly complicated; befuddlement sends the signal they feel they have something to hide.
6) Nor did they acknowledge the client's feelings. Yes, they provided a left-brain informative response which might be the official line their accountant has suggested they follow but at no time have they addressed the customer as a disappointed human being.
7) Nor did they show any appreciation for the business. Even though she queried the invoice, my friend let it be known she would pay the full amount. Will my friend use this company again? No. Will she recommend them to someone else? No.
Many people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Invoicing is a process that starts from the moment you first meet the client. Your numbers tell a story and you need a congruent and SIMPLE explanation to accompany them. How much detail you provide on the invoice will depend on how well you have communicated with your client on previous occasions. Your invoices are about communication; be sure you communicate clearly so you gain a happy customer -- one that will recommend you to their friends and not write about you behind your back!
How well are your invoices working for you - To learn more about this author, visit Jane Francis's Website.
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Have you ever queried a bill? Can you remember the bad feelings it created?
Many business people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Though the invoice comes down to a figure that is payable, those numbers are symbolic of value; those figures symbolize what your client expected to receive and if they are higher than what they expected to pay they will not be happy.
A friend hired a landscape gardener to tidy her garden. When she asked for a quote she was led to believe the job was going to cost around $400. However, when she received the invoice it was closer to $700; here is the detailed description the company provided of the work for which they charged her:
Landscaping works completed including: Full weed & trim gardens, removal ivy & trim back invasive creeper on back fence, cut back hydrangeas, deadwood & feed fruit trees, tidy miniature agapanthus, transplant agaves & miniature agapanthus is main garden, removed lavender, prepared soil for & installed client's own potted color, potted aloe vera, tidied spider plant & jade tree in pots, tidied pathway at letterbox, full fertilise all gardens, derris dusted cabbage trees, supply compost, fertilisers, derris dust, water retention crystals. Full load to tip. Day charge. Total hours 9.5.
My friend had no issues with what the company said they did, her issue was with the unanticipated expense. When she queried why the invoice was $300 higher than her expectations, here is the reply she received.
Dear L,
We had a phone conversation regarding the expected $ for the day. As it was a charge up (not based on the original quote), I stated an hourly rate of $38.50, plus materials and rubbish removal and that we have a day charge of $150 for an 8 hour day, which is reduced if there is less time on site. Basically is equates to $150.00 divided by 8 hours = $18.75 per hour. Times this by the physical time on the job (not by the number of crew hours) i.e: 6.75 hours (9-3.45) including rubbish removal time. So $18.75 x 6.75 hours = $126.55 day/overhead charge.
The materials and waste removal were quantities not known till the end of the job.
I hope this is clearer for you.
Kindest regards J
What???? How many times did you need to reread that to understand it?
Here are 7 ways this company failed to communicate effectively with their client:
1) They failed to make it clear that they planned to 'charge up' the work as they incurred costs.
2) At no time did they provide an estimate of how much these costs might be.
3) In their reply they focused almost exclusively on their hourly rate (their issue) when their labor charges were not the main issue.
4) Nor did they provide a relevant response -- in this instance the total hours billed for this job were 9.5, not 6.75 as explained in their email.
5) The reply was needlessly complicated; befuddlement sends the signal they feel they have something to hide.
6) Nor did they acknowledge the client's feelings. Yes, they provided a left-brain informative response which might be the official line their accountant has suggested they follow but at no time have they addressed the customer as a disappointed human being.
7) Nor did they show any appreciation for the business. Even though she queried the invoice, my friend let it be known she would pay the full amount. Will my friend use this company again? No. Will she recommend them to someone else? No.
Many people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Invoicing is a process that starts from the moment you first meet the client. Your numbers tell a story and you need a congruent and SIMPLE explanation to accompany them. How much detail you provide on the invoice will depend on how well you have communicated with your client on previous occasions. Your invoices are about communication; be sure you communicate clearly so you gain a happy customer -- one that will recommend you to their friends and not write about you behind your back!
How well are your invoices working for you - To learn more about this author, visit Jane Francis's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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