Quotes and invoices are key to any construction business. You may feel safe taking a client’s verbal agreement on a price but it can always be very risky.
We have seen many companies lose money on a job due to the fact of the client going back on their word and we would hate this to happen to you.
Quotes are the biggest safety net you can have in this industry, as some clients have agreed verbally to a price but they will wait till after the work has been fully completed to query the price and say they would never agree to that amount and you end up being the one losing money as you have no proof to what they originally agreed to.
Partnered with Construction Insider, here are the top tips when it comes to quoting and paperwork!
Always be specific in your descriptions and include any caveats. This is a very important tip when it comes to quoting. As this is to cover yourself more than anything else. Specify everything you plan to do in the job and seek written approval from the client before starting any work, the main reason for this is because you will find some untrusting client’s and they will try anything to get some free work done.
We have worked with many construction businesses who don't have a set of basic Terms & Conditions in place with their invoices. The T&C's are there to protect you AND your client - when there is nothing in place, what do you have to protect you?
Include an expiry date and follow up before it ends. We all know that material prices can go up and you may want to increase your labour costs, most companies do a 3-month expiry date but you can do as little or as long as you wish. This prevents people coming to you in a year or more wanting something for the same price as you quoted last year but since then you have increased your prices and can no longer do that job for that amount of money. If you follow up before the expiry date warning the client that the price may change after this date and will require a requote if they do not wish to go ahead at this time, they will appreciate that more than being left in the dark and finding out they have to pay more because your prices have gone up. People can also argue with you on this due to there being no expiry date and may want you to do the work for the quoted price since you never covered yourself.
Having written confirmation from the client. This is also super important! Make sure you always send your quotation via email and receive a confirmation or purchase order back from the client saying to go ahead with the quote and they are happy with the price. This is your safety net if a client starts to query the price halfway through or at the end of the work plus you will have in writing the specification the client has agreed on for the price.
If you are concerned about the feasibility of a job, consider the impact of a worst-case scenario and propose including a clause in the quote that protects both parties from any undesirable outcomes. Identifying the risks and putting in appropriate safeguards will keep you ahead of any unplanned events as best as possible.
Lots of companies use software to help keep track of the progress of a job. Most softwares also have a quote converter to easily create invoices when you have finished a job. Some people use accounting software such as Xero or Quickbooks which is super helpful for your bookkeeper and accountant or you could use software designed for the construction industry to help track jobs such as ServiceM8 or Flowlens which both integrate directly into Xero and Quickbooks.
Software is often seen as a pain point for many businesses however this can be the best thing you can do for your business. It will allow you reduce your admin time/costs, digitise your business and provide you with more resources to pull ahead of the competition.
At SaintVA, we specialise within the construction industry helping businesses become organised, digitised and help implement safeguards protecting their business for the long term. If you are looking for support on any of the above points, or administration in general - we are here to help support your business.
This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps construction businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.
Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!
The only book you need to start up your construction business in 2021! The CSG becomes your new handbook offering everything that you need in order to create a successful construction business!Claim Mine!
Looking at starting up a scaffolding company? Well, it couldn't be easier with the simple guide giving you everything you need to know to get started!Next Article