Tradie Tuesday – Invoice before you leave
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This week’s episode is for Tradie Tuesday and it’s out there for all of you trades people. A lot of Tradies come to see us with their ‘magic book’ which details every job they have done in the past couple of weeks – the time taken, for instance, the parts they have used, on particular jobs.
In a week’s time, the Tradie cannot remember what they did a couple of days ago as they have been very busy. (I know for myself that I cannot often remember what I have done last week). So, I have a challenge for you guys and gals. I want you to start invoicing before you leave the worksite.
I get it, sometimes you think it’s a bit too hard to figure out the pricing of things but I can guarantee that you are actually losing money because you are not invoicing before you leave the worksite. Even if you miss a little bit here and there in terms of pricing, I tend to find that when tradespeople don’t invoice before they leave the worksite, they are 20-30% less profitable than those that do invoice before they leave the worksite!
Why is that?
Because details are fresh in the mind, it only takes five minutes, then it’s done and dusted and they can get on with the next job.
How do you do this magic thing – Invoicing before you leave the worksite?
It is very easy if you have a product or tool that enables you to invoice from your phone or tablet. These tend to be either specific to your industry or a simple accounting package that is cloud based that will allow you to key in all the standard costs of the things you use.
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Bundle your jobs
For example, if you are an Electrician and there is a particular down-light that you install which requires a metre of wiring, a switch and a power-point. (I’m an accountant so apologies if the details are incorrect!). Therefore, there are a total of 4 items including the downlight. You could package these into a bundle – every installation takes approximately 15 minutes for example, plus the materials – that equals $100. Then, say you have installed 4 downlights in a room, that equals $400 for that particular job.
It may not be 100% accurate, but this technique will be more efficient for you. If you have staff that are helping as well, they will able to easily collate how many kits they have installed – a downlight kit in this instance – and how much time and labour they have spent. With this information, you are able to invoice the customer, request payment before you leave using an electronic payment gateway such as Square (which we spoke about a few weeks’ ago) and there you have it; you have the money in the bank.
The Magic Book
Conversely, if you have the ‘magic book’, you fill it all in, then you go home and you have to feel like you want to do your invoicing. How many of you get to Friday afternoon and cannot be bothered? You just want some downtime – with your friends or family. Then Monday comes around and you race off to work. Suddenly you realise 2 weeks has passed and you have no money in your bank account and you’ve paid for all the materials you have used. Then you get out your trusty ‘magic book’ and you start putting in the information for your invoices.
The problem with that approach is not only it is harder to get money from your customer because they are often not willing to pay straight up, but also, if you haven’t written everything you’ve used in book or worse; your book gets coffee or water on it and is ruined or stolen or lost, it won’t help you get money in the bank!
If these ideas sound too radical for you or you are no sure where to get started, get in touch with us on www.CatalystPlus.com.au and give us a call, or book us online and we will help you become more streamlined so that you can make more possible.
So, there you go, I hope that was of help to you in this week’s Tradie Tuesday. In the meantime, have a great week and we’ll see you in next week’s episode of Catalyst Plus TV.