Listen To The Podcast Episode 9222019
Reporting becomes easier when invoice tracking. Many business owners need to know the cost to provide a product or services. In August 2019 we went over overhead cost. Read more about overhead costs – (Financially Support Your Business Without Debt Part 1).
Billable expenses are the expenses you paid on behalf of the client or the costs needed to perform the service or create the product. You will bill expenses for each job that is directly related to the client. We do not bill overhead cost specifically to one client. What do I mean?
Cost like internet and phone are not included in the client invoice because they are overhead costs. The overhead cost will accumulate with each sale. You will need to create sales goals to collect your monthly overhead expenses and keep in mind profit will help to pay for an annual cost. Expenses directly related may be printing, software, document management administrative, and labor cost.
In your invoicing include one-line item, depending on how your client or customer prefers to receive billing. If your client prefers detail billing, you may include multiple item lines. Avoid giving overwhelming details. Often many people need the basics as I charge for the monthly service overall without details. Clients receive more information for the service I am working on in the background if requested.
Your invoicing is essential to continue to operate your business. Proper collection and turn around will also sustain your business without debt.
Your cost before you invoice should be close to what was estimated to the client. If you cover expenses for a client, include that in your estimate. What is an estimate? The estimate is a quote and is what you believe the service will cost. An estimate means you have calculated the possible hours of labor (Creating Packages Bringing It All Together) and any related expenses plus your business expenses/profit markup. Estimates are sent to the potential client or customer for their approval for a service or product they have requested. If a client agrees, then you convert to an invoice and wait or payment. An estimate comes before an invoice. An invoice says the agreement is made and you are ready to accept payment either before, during or after service is provided.
Learn more about creating estimates, invoicing, and faster and easier payment collections in the Ask The Accountant Module: Estimate to Invoice with Line Items and Easier Payments. Link to the page posted soon.