When it comes to most service businesses, transactions are typically pretty straightforward. The service provider performs the service, and the customer pays for that service.
But what if the service provider never provides the customer a bill?
What happens then?
If you’re a contractor, completing a project successfully is important, but so is getting paid for that hard work.
Invoicing can be complicated in the construction business. But it doesn’t have to be.
Read on to learn about the importance of invoicing, why you need to invoice customers promptly, and how to make the entire process smooth and straightforward for both parties.
Construction invoicing is tedious and time-consuming. What’s more? It takes contractors away from the job site.
But invoices are an essential part of the construction business.
Without invoices, you don’t get paid for your work. Without getting paid, you can’t buy materials or compensate your workers.
Sure, you can find invoice templates online, but a generic invoice may not meet your needs depending on the client or the project.
For example, if you choose to use in-progress billing, a generic invoice template won’t cut it. That’s because the American Institute of Architects created a standard billing process for the industry — specifically for in-progress billing.
This type of billing is standardized — the invoice and the language you use doesn’t change. By making sure you are compliant with industry standards, you reduce the possibility of risks and expedite the payment process.
Flexbase speaks this language fluently.
In fact, we’ve automated the entire paperwork process, from:
That means Flexbase handles the “less-than-fun” parts of the construction business for you. We’ve also streamlined everything so that you no longer have to worry about:
…because Flexbase is an all-in-one construction billing software.
When you’re working on a construction project, it makes sense that the manual labor takes a front seat. After all, that’s what you know, and it’s what you’re good at. It’s what you’ve built your business on.
But, while you’d rather spend all of your time at the job site, you can’t completely ignore what happens back at the office. We’re talking about the computer and paperwork aspect of your business, specifically invoicing.
Wondering how long you have to get those pesky invoices out? You’ll need to consider these 3 factors.
Billing terms are typically laid out in construction contracts. It’s important to note that these terms aren’t merely a suggestion, these construction contracts are legally binding and should be followed as such.
The contract may include progress billing. It also may stipulate terms such as “all invoices must be sent within 30 days of completion of work.
Think about it this way – you’re banking on the customer paying you according to the contract terms. Therefore, you need to provide them with the invoice according to those terms.
Some states have their own specific requirements on when payments should be made.
For example, Massachusetts construction payment laws state that a contractor must approve or deny an invoice within 22 days of receiving it.
Flexbase can ensure you’re doing things by the book, depending on where your project takes place.
Oftentimes, there’s not just one party working on a project. You may have a developer, general contractor, several subcontractors, etc. Each of these contractors has their own materials, labor costs, and more.
But instead of a client receiving and paying bills from a dozen or more different parties, the developer may handle the various invoices.
Let’s take a look at a generic timeline for this type of situation:
Again, that’s just an example of this type of workflow.
Flexbase can streamline the entire process so that even on large projects with several subcontractors, everything is taken care of.
When should you bill your customers?
To put it simply: the sooner, the better.
Keep in mind, you’re likely not going to get paid the moment the invoice is in the mail. It will take a few days to get to the customer, and even once it’s in the customer’s possession, it doesn’t mean they’ll immediately write you a check or send you payment via credit card.
But, the sooner you do your part and send the invoice, the sooner you have the opportunity to get paid.
Just as it’s important to stay on schedule on the job site, it’s important to ensure your customer invoices are sent in a timely manner.
If invoices are sent to your customers late, you risk hurting yourself and your business in the long run. Late invoices may mean:
Every construction company knows the importance of cash flow to support a project. After all, to ensure the project is completed, you need to pay for:
If you’re not getting paid on time, you risk not having the cash flow to fund your projects.
Not only does Flexbase stay on top of sending invoices on-time, Flexbase provides you with detailed financial reports so you always know where you’re at with receivable earnings, how much cash you have on hand, and more.
After working hard and completing a project, the last thing you want is to not see a dime for all that hard work.
Typically, billing terms are set in the contract. If your contract (signed by both you and the customer) states that invoices will be sent “x” days after project completion, and you miss that deadline, you’re putting your payment at risk. A late invoice can void your contract altogether.
Essentially, in that case, you’re at the mercy of the client doing “what’s right” and paying you for the work you agreed on – even if your bill was late.
You’ve spent a long day at the job site. It’s likely the last thing you want to do is head to the office and clock another few hours, organizing paperwork and sending invoices.
What if you didn’t have to?
This is where Flexbase comes in. Flexbase is the missing piece from your construction business.
Why do you need Flexbase?
With Flexbase, you’ll:
Flexbase streamlines the entire construction accounting process.
You may be juggling multiple projects at once. That means managing several construction contracts, likely all with different contractor invoice deadlines.
How do you keep it all straight?
That’s easy. Flexbase will handle it for you, sending invoices on your behalf so you never have to worry about missing a due date and therefore, won’t risk losing out on the payment you’re owed.
When it comes to invoicing, details are extremely important.
Did you know that even the smallest of errors on your contractor invoice, even something as simple as a typo, a double-entry error, or a missing insurance form, can invalidate that invoice?
Human error is a real thing. We all make mistakes. Maybe you leave off a payment due date, or a typo means you bill the incorrect account number. These things happen.
That’s why you should leave the invoicing up to Flexbase.
Flexbase is designed to catch these errors. Not only that, Flexbase automatically generates all of the correct forms for you, so you never have to worry about losing out on payment over easy-to-make human errors.
You don’t have the time, energy, or resources to badger your customers with payment reminders.
Flexbase can take care of that tedious task for you.
Flexbase sends automatic payment reminders to forgetful clients. And those reminders help you get paid faster.
When a customer is really delinquent on payments, especially after several reminders, it may be necessary to follow up with delivery of a legal notice.
But you’re not a lawyer, you’re a contractor. Knowing the ins and outs of how this process works can be time-consuming if you handle it on your own and expensive if you hire an attorney to take care of it for you.
Again, this is where Flexbase comes in. Flexbase will automatically send out legal notices, like lien waiver forms, on your behalf in the required timeline provided by your jurisdiction. This way, you won’t miss out on payment due to a technicality.
Flexbase is the clear answer to all of your invoicing questions.
With Flexbase, you’ll be able to:
Flexbase does all of this without charging you a monthly fee or an annual subscription. Not only that, you won’t be hit with surprise, extra charges.
Instead, Flexbase operates on a commission starting at 0.5%, with even lower fees for higher payment volume — and the best news, if you don’t get paid, we don’t get paid.
Send your invoices on-time and error-free with Flexbase.
Schedule a free demo today and see how quickly Flexbase can help you get paid on time. You’ll wonder how you possibly managed all that paperwork without it.