Having worked in invoicing for 35 years, 10 of which were in the landscape industry, I’ve seen a lot of invoicing processes—and the mistakes that go with them.
When I originally started in the landscape industry, my company was behind the times when it came to invoicing. I hope companies have become savvier in this arena by using automated invoicing systems, but I suspect there are many that have not.
In my experience in the landscape industry, and now working as an implementer and trainer for Aspire Software, there are three common invoicing mistakes I see. They are:
- The use of antiquated, manual invoicing systems.
- A disconnect between hours worked and hours billed.
- The chance that work isn’t billed or is billed weeks after it’s done.
The use of antiquated, manual invoicing systems.
When I worked in landscaping, I spent 35 hours a week doing invoices manually before we switched over to an automated system. When we added software, my time spent on invoicing dropped to two hours a week. Our systems were that antiquated. That change was a huge labor savings and a significant efficiency gain for the company right there.
Meanwhile, there was no way to know how much money we left on the table due to human error when manually calculating labor and materials. Think about it: If somebody sends you an email or submits a piece of paper say that says, “I installed three trees and worked for 5 hours,” how do you know you’re using the right labor rate? Did you do the math right? Did you calculate it the same way the team estimated it? There’s a lot of room for error. I hope nobody’s calculating these items manually anymore, but I’m sure many are.
And what about unaccounted for change orders—or worse, entire jobs that go unbilled? (See No. 3 below). It’s difficult to put a number on that lost revenue. That’s the scary thing.
Ideally, you’re using an automated invoicing system like Aspire, where the estimate flows through to the invoice. This method is beneficial for a few reasons: 1.) No one has to re-key the data, duplicating work and opening the door for data-entry errors; 2.) You don’t have to track down an estimate on paper or in another format and do any calculations, creating another opportunity for error; and 3.) You can send the invoice with the click of a button, including as much or as little detail as you’d like.
A disconnect between hours worked and hours billed.
In every landscape company, confirmation that a job is complete must go from the field to the office to ensure the project is properly billed. At my landscape company, that information was delivered on a piece of paper. If you’re not using an automated system, you’re probably doing something similar. This creates two problems. First, you’re paying an employee to re-enter the data into the invoicing system. Second, there is no way to track which of your staff’s hours are billable vs. unbillable.
In landscaping, the name of the game is controlling the number of unbillable hours, such as shop time, travel time, loading/unloading, etc. You want your production staff doing as much billable work as possible during their 40-hour workweek. An automated invoicing system like Aspire allows you to track and monitor hours worked and hours billed to a job, enabling you to keep an eye on production and make adjustments that will improve your profitability, if needed.
There's a chance not all work is being billed or it's being billed weeks after it's done.
Before we used an automated invoicing system at my landscape company, we couldn’t prove or disprove that we’d billed for all the work we completed. Can you?
You’re not going to forget to pay your staff, because they’ll let you know if you do. And you’re not going to forget to do the work, because the client will alert you if you do. But there’s a possibility no one is going to tell you if you forget to bill for the work, which means you don’t get paid—a direct hit to your bottom line. That’s the worst-case scenario.
The next worst case is that you bill for the work weeks behind the expense. What’s that doing to cash flow? And what impact does it have on your client relationship? In your client’s mind, it’s a reflection on your efficiency—or lack thereof. Remember, the faster people receive an invoice after the work is completed, assuming they’re happy with it, the faster they’re going to pay. If it takes you six weeks to bill your client, they’ll likely take that long to pay it. It’s human nature.
With automated invoicing software like Aspire, if you finish a job this afternoon, you can complete the ticket now, run an invoice, and have it in the client’s inbox by the end of that day. Your invoice is out the door before the expense (payroll) hits, which is a reversal of the traditional way landscape companies have operated—but an improvement that helps you speed up receivables and improve your cash flow.
At Aspire, we understand that when you’re running a landscape company, it’s important to have the right tools for the job. That’s why we’ve developed an all-in-one, cloud-based solution with the functionality you need to keep your entire business running smoothly—and profitably. If you’re ready to take your company to the next level, contact us today!
Need help finding the right business management software? Download this helpful buyer’s guide to learn everything you need to know before selecting a solution, from initial research to final decision.
For other tips for achieving consistent and sustainable growth, read our article, "5 Simple Strategies to Grow Your Landscaping Business."
If you enjoyed this blog post, you might also want to read, "8 Ways Business Management Software Can Boost the Profits of Your Landscaping Business."