Time to invoice

[ians]

This is always the best part of the job ...

You arrived on site at 8:47:30 am you left the site at 13:27:40.

The customer made a note of time of arrival and departure ... when he/she opens the PDF invoice they are expecting to see 4 hours labour and R12345.67 for material.

they dont expect to see an amount for travelling to and from site ... nor the hour it took you to get there ... just the hours on site and an amount for material.

I dont blame them ... because the uneducated tradesman business owner who still hasnt figued out that if you own a business you need to think like a businessman and make a profit ... you not just trying to improve your hourly rate you earned as a tradesman ... and shyte costs money.

That van that you are driving had to be bought and paid for ... the thing has to be serviced ... you have to fill it with petrol and insurance and etc etc etc.

So let me help everyone understand and share what is involved in doing a 4 hours job.

The phone rings ... someone has to answer it.

A job card is created (install a small DB with an ASC ... a couple lights and a plug)

a visit to site to view what is required ... a sketch and a few measurement.

back to the office to plan the job.

then a list of materials must be created and ordered ... either collected or delivered to your workshop.

So what I do is lay everything out on the table make sure we have everything .. some of the equipment will already be in the van (glands/lugs/screws etc) a quick stock check just to make sure.

Pre wire the DB ... drill the holes and label the DB.

Drill the holes in the lights and fit the glands.

Make sure the gas gun is fully charged so that the saddles can be installed.

Laser batteries are charged.

Then we still have to stop to get a cold drink and something to eat because for some reason electrician and semi skilled dont seem to make lunch in their own time ... then the garage to fill up with fuel ... then stop at the wholesaler to collect the 2 glands you short ... then eventually you head to site ... 4 hours later job is complete and you leave site ... and that is because you are so efficient ... generally a DB a plug and a couple lights take more than one day.

We wont add in the trip back to the wholesaler because you forgot to get insulation tape.

Head back to the office to hand in your service sheet so that the admin can invoice and email the invoice.

We wonder why more than 70 % of businesses fail within the first 5 years and 98 % within 10 years.

[ians]

The part that blows my mind ... you go to all that trouble ... super efficient and make the job neat and pay attention to detail ... the customers whines about the bill.

the fence guy arrives slaps 2 clips on a 4 m long pipe right at the entrance to the house ... jobs looks like crap wires all over the place ... the bottom of the energiser has exposed high voltage wires ... you point it out to the customer and his response "thats just how they do the job" but already paid his bill ... you being grilled over your silly 4 hour invoice.

We as contractors have created this mess for ourselves.

[Justloadit]

What I now do is that I do not do a quote, but first offer a verbal expected budget cost.
Depending on the reaction of the client, most times I find that the client does not have the budget.
In the case the client does have the budget, only then do I do an official quotation.

This has saved me countless hours.

Maybe get the client to send you a video and a narration of what they need, will save you the trip. From this you have a pretty good idea of the estimated cost. Issue a verbal expected cost.
If the client has the budget then go out to site.
Also later you can use the video as evidence when the client says that you missed something.

[adrianh]

What I now do is that I do not do a quote, but first offer a verbal expected budget cost.
Depending on the reaction of the client, most times I find that the client does not have the budget.
In the case the client does have the budget, only then do I do an official quotation.

It goes like this:
"How much are the glasses?"
"R1500"
...if the client doesn't flinch...
...add "for the lenses"
...if the client doesn't flinch...
...add "plus R1000 for the frame"
...if the client doesn't flinch...
...add "plus R400 for the consultation"
...if the client doesn't flinch...
...add "plus R700 for the tinting"
...if the client doesn't flinch...
...add "plus R100 for the case"
...if the client doesn't flinch...
...add "plus R120 for the cleaning cloth"

[adrianh]

What I now do is that I do not do a quote, but first offer a verbal expected budget cost.
Depending on the reaction of the client, most times I find that the client does not have the budget.
In the case the client does have the budget, only then do I do an official quotation.

This has saved me countless hours.

Maybe get the client to send you a video and a narration of what they need, will save you the trip. From this you have a pretty good idea of the estimated cost. Issue a verbal expected cost.
If the client has the budget then go out to site.
Also later you can use the video as evidence when the client says that you missed something.

On a serious note I agree with this!

[ians]

Here is an example ... I get a call to do a quote ... a regular customer.

It takes me 5 days to compile the quote ... back and forth to site measuring ... opening panels ... identifying cable routes and how to secure the tray and because it is on comunal property ... we have to get permission to work in front of other companie's entrances ... etc etc.

Design ... which includes cable sizing ... panel upgrade ... cable trays ... underground sleeves.

Create a bill of qualities ... a full material list and I send it for pricing.

Friday afternoon I send the quote to the customer R876 000.00 (rounded off)

The customer calls me a week later to inform me that they only plan to do the project in 5 years time ... so I send them a bill for R6000 for my time ... thats were the fight started.

I doubt an electrical consulting company would only charge R6k for all that work ... but maybe I live in coco land where people dream of making R6k for creating a document ready for a tender.

[MZOMUHLE]

What I now do is that I do not do a quote, but first offer a verbal expected budget cost.
Depending on the reaction of the client, most times I find that the client does not have the budget.
In the case the client does have the budget, only then do I do an official quotation.

This has saved me countless hours.

Maybe get the client to send you a video and a narration of what they need, will save you the trip. From this you have a pretty good idea of the estimated cost. Issue a verbal expected cost.
If the client has the budget then go out to site.
Also later you can use the video as evidence when the client says that you missed something.

I agree on that

[ians]

Time to invoice ... actually this one is specially for Adrian ... I hadnt got to invoice yet.

I get a beep on my phone ... a payment ... strange I dont recall an invoice for that amount ... I had been working for a customer for almost a week.

I hadnt created an invoice yet nor requested payment ... yet there was an amount paid for more than the time I had spent of site ... when I enquired about the payment ... The customer informed me they felt it was right to pay something because I had already been working for a few days ... going on what they had paid other services ... it was a fair amount to pay ... it certainly was more than a progress invoice.

The electrical contractors have created this problem for ourselves ... no consistency in the industry ... offering free quotes ... labour rates all over the place ... some f the ridiculous pricing I see in the industry ... no wonder the industry is in such shambles ... no skilled people to police the industry.

What are people going to do if a scan payment is introduced in stores ... just assume that you can walk out he shop because there is no teller or security to check your goods as you exit.

I dont see why you should assume that you dont have to pay for a service ??? ... to make even worse ... its not like its a walk in service ... where there is no costs involved ... its the time for the person to drive to the site ... the vehicle expense ... petrol price going through the roof.

[adrianh]

I dont see why you should assume that you dont have to pay for a service ???

You misunderstand what I said.
1. I said that it is up to the service provider to make it clear what he is going to charge.
2. The customer has the right to ask for service (and can rightfully claim that he does not know what the payment terms will be).
3. If the service provider is unclear about his charges then some customers may assume that there will be no charge just as some customers will assume that there will be a charge.

On a personal note: I dislike "loosy goosy" working arrangements: I quote up front and get paid accordingly and I expect my service providers to quote up front so that I can pay accordingly. Very few people appreciate surprises in business so getting an unexpected invoice with no prior discussion is going to annoy people. I also had one customer that would deposit money before formally placing an order - I put a quick stop to that because prices go up and sometimes the required parts are simply not available to do the job.

This debate comes down to one fundamental: Who is in charge of your financial life - you or your customers. I choose to take responsibility for everything related to my financial well being and as such I choose to educate my customers about my financial expectations thus there are no excuses on either part, no grey area - just black and white - I am going to charge this and you are going to get that - no less no more!

[Justloadit]

Mmm, me thinks that an invoice be issued to quote, with payment before issuing quote.
There after a quotation issued for the job, in which you have calculated the time you expected and materials to do the job.

Now 2 things on this quote :-
1) Do not itemize the exact materials to do the job, - they will pass this on to the unskilled cheapie electrician
2) In the case the quote is accepted, the charge for the quote will be discounted off the invoice. ( Psychology in play - Customer will feel better getting a discount rather charging less on the invoice)

Wasting time doing quotes and not getting the job because we are too expensive is another way of loosing money.
Charging for the quote ensures the customer is serious. I now see that the panel beating industry charges for quotes now, because of the time to do the quote, in the past it was for free.
We charge an hourly rate, but in the end the charge covers more than double our time to do the job so our hourly rate reduces dramatically, but the expenses remain the same per month.
Detailed quotes allow the inexperienced to make money on the job because they did not spend time making and planning the quote.