If you want prompt payment for your work as an electrician, it’s important for you to employ decent billing and payment practices. If you aren’t keeping careful track, you can seriously hurt your bottom line. Most small business owners have some sort of process in place for billing customers, but in case you don’t, here are a few tips for setting up a billing system that will ensure you’re paid for the work you do.

Invoice vs. Statement

This is debated a bit, so let’s cover the basics. An invoice is an itemized list for a job completed. A statement is a bill for the itemized invoices. Let’s say you have a contract to install the wiring for three new houses.

You could invoice for all of the homes at the end of the project or you could invoice after you complete each house. At the end of the project, you will then send the contractor a statement which is a summary of all three invoices. We break down the items on the invoice and the statement below. An invoice should include the following information:

• The start and finish dates of the work completed
• The customer’s name, address and contact information
• A description of the work done. This should be as detailed as possible
• A total price for the work completed
• A breakdown of costs for each type of work completed
• Due date for payment
• Payment types accepted
• Your contact information
A customer who receives an invoice with all of this information will have very few questions regarding the invoice. This is good news for you because transparency is the one of the best ways to keep disputes from arising. A statement (the document sent at the end of the project) should include the following information:

• The name, address and contact information of customer
• The date the statement was prepared
• The invoice numbers for each invoice included on the statement
• A list of any payments made toward the invoices on the statement
• The total amount due
• The due date
• Any available discounts
• Any payment arrangements or special terms
• Your contact information
Like the invoice, the more transparent your statements, the less room for a dispute.

Sending an Invoice and Statement

As was mentioned above, you can invoice at any point you prefer. For larger projects such as multiple homes, it might be best to invoice at various stages of the project, such as when each house is completed or when a percentage of a single, larger structure is completed. But the best rule is to invoice based on the payment arrangements you set up in your contract. If you’re to be paid as you complete a certain number of homes or a percentage of a property, then your invoicing should reflect that. It just one more way to ensure everyone stays on track and remind all involved parties when payments are due.

Tracking System

Having the best invoicing and statement processes mean nothing if you don’t have a system to keep track of everything. Some contractors still prefer to invoice by hand and mail them out (or deliver them in person), while others choose to use a computerized system. Honestly, either one is acceptable – you just have to keep track of all the jobs you might be juggling at once. Here are some suggestions for setting up a manual system: Manual invoicing requires the following information:

Invoicing pad and blank statement: You can get these at office supply stores or most large department stores that offer office supplies. Look for an invoicing pad that includes one or more carbon sheets so you can give one copy to your customer and keep a copy for yourself. Remember to avoid writing out two of the same invoice because that gives your customer wiggle room in a dispute (they could say you gave them one invoice but made up a different one for yourself).

Instead of carbons, you can also create an original invoice and make a copy with a copy machine. For the blank statement, you can use two-column accounting paper, also available at office supply stores and large retailers.

Blue or black ink pens: Never ever make out an invoice in pencil – it’s too easy to change. You should also avoid other color ink pens because they don’t copy well.

File folders: Present all pertinent paperwork to each customer in his or her own folder

A filing system: This is commonly set up either alphabetically by customer or by project, although it can also be arranged by month. Whichever method you choose in setting up your filing system, make sure it makes sense to you.
Getting paid for the work you do is important; it can mean the difference between taking on new work or shutting down your business. If you keep careful track of your active jobs, it makes it that much easier to focus on finding new work.