You’ve been handwriting contractor estimates and invoices for years because it’s been getting the job done well before the prevalence of smartphones. However, simply getting the job done is not enough anymore.
Are you wasting precious time, making mistakes, and disappointing customers unintentionally?
In this 5-minute read, learn why handwritten invoices simply don’t cut it in today’s digital world and how an all-in-one business management software with electronic invoices (for mobile phones and computers) can alleviate many of these issues you face on a daily basis.
Here Are the Top Issues You Can Tackle With Electronic Contractor Invoices
1. Eliminate Wasted Time
Handwriting invoices simply takes a lot more time than creating electronic ones.
Between manually writing basic customer information such as their name, phone number, and address, and manually calculating tax on a per-item basis, handwritten invoices require you to rewrite a lot of information that can be done automatically with an integrated management system.
When creating an invoice using an invoice software for contractors that’s integrated with a service CRM system, the customer’s basic information is automatically inserted into the document so there’s no need to rewrite it.
Also, your company’s basic information and any terms and conditions you set can be automatically filled into the invoice as well. Once you start adding line items, simply mark which items need tax applied to them and all of the math is done automatically.
Do you have commonly used items, services, or parts with a set price? All of your line items can be stored in a saved list for quick insertion into the invoice. No need to remember all of the details of your items and services, and no need to write them out. With a few taps, you can easily insert the pre-defined items into your invoice.
When it’s ready to go, you can accept a signature if necessary and then send a PDF of the invoice to the customer’s email address or phone with the information already filled into their customer profile. It’s that easy and it’s that fast.
2. Make it Easy to Implement Changes and Fix Mistakes
Whenever there are multiple items, complicated tax applications, and discounts, manual calculations become tedious and prone to error. Not only do you run the risk of undercharging for your services or overcharging your customers (which they will not be happy about), incorrect calculations can cause errors with your accounting as well.
Invoicing software for contractors does the heavy lifting for you. Simply enter the line items and select which to apply tax to and all of the math is automatically calculated and broken down for you. No need to check your work or fear that there’s a mistake.
Within your current process, what happens when you do catch a mistake or there’s a change in the service provided, prompting a change in the invoice? Do you try to erase or scratch out your mistake and modify the existing paper document or do you start over creating a new one from scratch? While you’re typically left with either a messy paper invoice or wasting time recreating it, modifying an existing electronic contractor invoice is easy since calculations are automatically updated and new PDFs can be generated with the push of a button.
#3. Keep Legal and Accounting Troubles at Bay
Sometimes a dispute over an invoice will result in legal action. When a legal dispute arises, lawyers begin by collecting as many documents as possible in order to build a case. As the contractor, you will be required to defend your invoice with evidence and information. Lawyers take advantage of missing documents and incomplete information when resolving disputes about services rendered, pricing, and terms.
You’ll always have a better chance defending yourself in a legal matter with solid record keeping and accurate information, including data such as contract date, delivery and completion records and attached photos/files, disclaimers, payment terms, and warranties or guarantees. Electronic invoices are an excellent way to ensure that required and important information is never left out of estimates and invoices. Digitizing your invoices will force your staff, whether that is a service manager back in the office or a tech in the field, to cross every “t” and dot every “i”.
Electronic invoices also fortify your records should you ever decide to sell or divest in your business. Buyers and investors typically engage in a due diligence process, which is the process by which they gather documentation, discover risks and challenges facing the business, and understand the operating processes to determine how the business is being run. This due diligence process essentially confirms or invalidates the valuation of your business, meaning it informs whether the purchase price of the business (or shares of it) is reasonable.
Maintaining sound documentation, including retaining electronic invoices for every job completed, increases confidence that your books are accurate and that there are no glaring financial risks hidden within the business.
#4. Accelerate Cash Flow
Every moment the parties (contractor and customer) that passes between milestones completed or job complete is time where there is a receivable with no cash. Maintaining low receivables is the best way to keep your business operating.
When customers can pay IMMEDIATELY, rather than waiting a week for the mail and checks to clear, your business is generating cash faster. This allows you to focus on growing capacity and leads and less on covering bills and payments.
#5. Increase Customer Satisfaction
While handwritten service invoices can get the job done, they’re not how your customers want to receive their invoice. Not only are hand-written documents often disorganized and hard to read, but they also consume the customer’s time waiting for you to draft the invoice and they lack traceability for the customer. Unless you’re a calligrapher, handwritten invoices are messy and unprofessional.
Sending the customer a digital estimate or invoice to their email address or phone allows them to easily search and locate the document whenever needed. Additionally, as described in another article about proper documentation, having digital traces of your signed estimates or invoices can save you from disagreements as they can be easily referenced and confirmed in your email. As well, utilizing a contractor invoice template, ensures consistency with your documents.
#6. Hand-Written Invoices Create Extra Work for Customers…and Look Sloppier
We get it…written invoices worked for decades. No one seemed to mind. So why the change?
It’s easy. Just like many schools aren’t teaching cursive anymore, the written invoice isn’t convenient for how customers store their documents and records. Evidence is mounting that more and more customers are relying primarily on digital storage and filing systems for their records. For many, this simply means filing these documents in a folder within their email account or in a folder on their computer’s hard drive. Cloud storage is gaining incredible popularity both as a primary document storage approach and as a way to backup files.
However there’s also your customer’s convenience to be concerned with. If you serve commercial customers, they are often using an accounting software package to manage their finances. Electronic invoices are easily dragged or uploaded into this accounting software, which quickly and easily reads the values on the document and makes the necessary journal entries automatically. A handwritten invoice forces customers who prefer digitized document storage to manually key in values, which raises the possibility of unnecessary data entry mistakes and errors.
And finally, let’s face it. In the service business, penmanship is not highly respected. Furthermore, the hands handling paper can be dirty, smudging or staining the document. And now in the coronavirus era, an increasing number of customers will be seeking contactless interactions.
Electronic Invoice Software for Contractors is a Must
Overall, digital invoices not only save you time and mistakes, but enhance your professional image to your customers. Now is the perfect time to adopt electronic invoices and documents for your contracting or field service business.
Looking for a free contractor invoice template? We’ve got some you can download right now here.