Time to invoice

[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.

[adrianh]

I think that you have to be upfront with the company and tell them that you are going to bill them for the "Assessment" - You can't assume that they are going to get paid for your time unless you tell them up front that you are going to bill them.

Assumptions are the mother of all fxckups....

That is exactly why companies charge call out and assessment fees. If I send my Canon camera in for repair or service they bill R500 sommer there and then. Only after they get the R500 will they bother to quote on repairs. They do this because 1. they know that they have to open the camera to inspect it. 2. 90% of people DO NOT have the work done because it is too expensive.

[ians]

Another example ... I work with company for 6 years we build the entire factory from the 250 amp mains in the meter room. When I arrive on site I make a point of greeting the man in charge/site manger.

6 years later ... they decide to do a few modification to a building which includes adding a few lights and plugs (6 lights and 2 plugs) a week into the mods I notice a things are growing by the day ... I ask the site manger if it would not be better to quote for the work ... he informs me that they are not sure what they plan to do ...so I must just bill for the time and materials.


month 1 - we do a ton of chasing and installing conduits ... I send the bill at the end of the month ... I ask the site manager if he is happy .. .the bill is paid and everyone is happy

month 2 - same thing

month 3 - same thing

month 4 same thing

month 5 same thing

By this time we have gone from a few lights and plugs to a 60 amp 3 phase power supply from the meter room to the building 10 24 ooo BTU aircons ... 65 socket outlets ... 130 lights points ... 6 kitchen showrooms with plugs and light sand stove points ... outside security lights ... 25 mm conduits for telephone points in each office ... and lots more.

Being the reasonable idiot that I am ... I reduce the labour rate because its no longer a little job ... big jobs get better rates (because you don't have to job hop etc you know the deal)

We complete the job ... As always ... I first contact the customer and verify that he is happy with everything and more important ... everything is working ... I send the final invoice.

Thats were the fight started ... I have still to this day never been paid the final invoice ... it was enough to close my little business (it took 5 years to recover) fortunately by that stage I had already got a good reputation ... I had jobs lined up for months in advance ... I put my head down and worked my backside off to pay back the wholesalers etc ...

At that stage I was still a member of the ECA ... I spent hours going through all the bills ... pics of work done material costs etc ... and everything was above board and well within the recommended rates markups etc.

They got a quantity surveyor in to verify that I had ripped them off ... when it was time to go to court the quantity surveyor stepped down and acknowledged that he was a friend of the customer and that he could not lie in court ... I still never got paid.

As Adrian pointed out ... dont assume because you work with a customer for many years that your payments are guaranteed ... I have had so many long time customers eventually take me to the cleaners ... why it happens ... the companies only last so long 3-5 or 8-10 ... its starts with the wifes new car ... then the bigger house then the private school and the expenses grow to a point that the business can no longer sustain.

Fortunately for me I make a point of always putting all my eggs in different baskets ... as I am typing this thread ... so I can see why I am not a multi millionaire. The knocks I have taken over the years.

People think start a business you will get rich ... unless you are a really lucky person ... or have a family trust fund or won the lotto ... you are in for a hard bumpy road.

I know of people personally who have started a small business and made millions ... I can count them on one hand ... they have the same story to tell ... and of that handful ... I can only give you the name of one person who made a success of his business ( and now in court trying to get paid millions owing to him) after selling the business.

The part that I cant do is the under hand dealings ... another reason I have not made millions ... I still havent bowed to the backhand deals sometimes required to grow or keep going.

[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

[MZOMUHLE]

Telephone tactics.

Following my previous post I thought it would maybe be of interest to someone if I shared how telephone skills and the way one uses a telephone has worked for me.

For ten years I commuted between East London and Johannesburg weekly. ( Once each week )
My mission was to buy cars in Johannesburg and sell them in East London. ( Rust free )

I also decided that I would never buy a car from a car dealer. Only private. I had to cut out the dealer's profits.
Those were the days before internet and Google were around.

Telephonically, I had to find out quickly whether the seller was a car dealer without actually asking him/her. ( No time wasting )

Now what do you think my first question was ?

I'm phoning in connection with the car that has been advertised.
I'f the response was " which one ? " then I'd end the call abruptly.
I mean, how many private sellers are selling more than 1 car at a time ?

For ten years I bought privately and my competition in East London never knew how I did it.
Junkmail was what did it, and my telephone skills.

Then along came internet, Gumtree, Autotrader and killed that one.

Today in my Electrical Contracting business, the phone is also vital for saving time.

I am direct.

Will you be paying cash or by eft? I always ask this question during my first call with a new client.
The prospective client then knows that I'm in it for the money.

This usually get's rid of about 60%.
I don't need them and don't want them. Goodbye.

We now work with the rest who are serious and are going along quite nicely.

Peace out ... Derek

I like that thanks for such an advice:

[ians]

Time to invoice again ---

You get a call to quote for a job ... things are a bit tight ... you are between projects and need something to fill the gap ... you arrive on site and walk through the site with the customer ... offering advise were you can (thanks to your years of experience) ... he asks if you know anything about geysers ... you on site you ... you climb in the roof and repair the geyser ... finish up with the customer 1.5 hours later and head back to the office ... complete the quote and send it ... a week later no response ... you call ... the customer got a cheaper quote.

So you send him and invoice for the time to repair the geyser ... that were the fight started.

[ians]

While we on a roll with these invoices ... I have another one.

I get a call to install a whole stack of lights ... fit a couple plugs and a few other items.

I arrive on site ... customer doesnt request a quote ... a referral from a friend ... check with the friend that the customer is legit and pays his bills ... I thumbs up.

We busy doing the job the customer (turns out to be the builder/handyman for the customer) he starts rattling on about all the big projects he has on the go ... talks about big cables and new buildings ... blah blah blah blah ... head that story so many times.

I get done with what I need to do and send him the bill ... he doesn pay ... this goes on for a week or 2 ... eventually I make a comment on facebook about him and his customer ... this recoils into a huge issue ... with threats ... I dont back down to a threat ... you better make sure you have balls to man up when its time to do what t is you threatening ... anyway I get a call from the customer wanting to know why I threw his name ... I tell him the builder has paid ... I meet both him and the builder on site ... it turns out the builder had been paid and decided he was going to just keep quiet and not pay me ... thinking I would take the "BIG" job bait ... thats were the fight started.

By the time I got to the freeway the message that the full amount had been paid was received.

A tip --- Small project favours come when you have already made enough money form the builder to warranty favours on the side ... dont get suckered into that one ... been there done that.

[Justloadit]

Lesson here.
Before starting any small job, let the client know that he has to pay, and what the expected amount is going to be.
If the client thinks its too high, you already know what to do, don't waste your time with the big quote then.

[ians]

I need to get to site ... one last one.

You collect the quote from the consultant ... fill it out do all the design work ... flow charts ... panel design ... material costing ... then fill it out in pencil ... drop it off with the main contractor.

You complete the project within the parameters of the quote with a decent markup.

You prepare your invoice and send it to the main contractor ... and thats were the fight starts.

You get called into the office and told that you need to sharpen your pencil because "WE" didnt make any money on the project and a huge reduction in your invoice is required ... but dont worry we will make it up on the the next big project ... that was already project 67 ... 7 years after you had started working with the main contractor.

A tip - Dont fall into the trap in the beginning ... they will ride you to the limit ...squeeze you for ever penny ... its been 11years since I last did a project with that company ... they still ask me to come back and work with them ... maybe when I am ready to make some decent money I will go have a beer with him.

Know your worth and charge accordingly ... it is becoming more and more difficult to find qualified skilled people with lots of experience.

[Justloadit]

What I have learnt, the guys who have the most money (wealthy) are always crying they are not making a profit. Sorry meant that they want to make more profit off your sweat.

My reply is always, Sh?t man I made a mistake on my quote, and that I should have increased the quote by 15%, but because it was a firm quote and we have been doing business for so long, I decided to accept the loss, so sorry can not make it any cheaper, and by the way, exactly when are you paying me?
I need the cash to pay my suppliers!


I have had so many threats that they will go to somebody else in the future who is cheaper.
I simply reply, look man just pay me for the quality work I have done, and you are quite welcome to seek cheaper in future. You have my number if you need any more quality work done.

Most times I get the call for the next job.

It is all a game to get you to drop your price, they know they getting a good deal.

[adrianh]

Time to invoice again ---

You get a call to quote for a job ... things are a bit tight ... you are between projects and need something to fill the gap ... you arrive on site and walk through the site with the customer ... offering advise were you can (thanks to your years of experience) ... he asks if you know anything about geysers ... you on site you ... you climb in the roof and repair the geyser ... finish up with the customer 1.5 hours later and head back to the office ... complete the quote and send it ... a week later no response ... you call ... the customer got a cheaper quote.

So you send him and invoice for the time to repair the geyser ... that were the fight started.

Dude - You really need to learn to be up front with your customers - I've said this before - YOU CAN'T ASSUME THAT PEOPLE OWE YOU!

[ians]

Dude - You really need to learn to be up front with your customers - I've said this before - YOU CAN'T ASSUME THAT PEOPLE OWE YOU!

This is an old trick ... I dont get caught for these "while you here ... wont you just"

I am just sharing a life time of experiences that I have been burnt and maybe the newbies can learn from my mistakes.

[adrianh]

The bottom line is very simple:

Be up front with customers and tell them what you are going to charge them - The service provider is to blame for not making it clear - not the customer for asking!

[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!