Your Paper Trail — The Lowly Invoice

In the last issue, we made a case for the importance of communication. I believe effective and timely communication is what often separates great from ordinary efforts, projects or companies. The ability to be understood is vital to establishing a rapport with a prospective client. You can’t buy rapport; it is colorless and odorless; you can’t put it in a bag; and it certainly takes two or more people for rapport to exist. Whatever it is or isn’t, very few sales are concluded unless it exists, so let’s take a look at some things that help it along.

I joke with my classes that since we as contractors do what we do all the time, we naturally think it is simple. But the prospect only remodels his home every 10 years and we must remind ourselves of this when we are presenting details. It is imperative that the client not only know what the end result will look like and the cost, but the process used in getting from here to there.

When a prospect asks what a sunroom costs per square foot and says they won’t hold you to it, he is miscommunicating because of course he will hold you to your answer. You gain rapport by explaining why square foot costs are often misleading. The communicating part comes when you explain that good cost estimates can only come from complete designs and specs and, while our estimates are not free, they are very valuable because clients know exactly what they will get and what it will cost.

You not only have communicated the cost of the sunroom and the importance and safety of design but also the danger of not having it. By clearly explaining important facts, you are establishing a potential rapport. Those clients who buy without rapport do so for price or from pressure, and satisfied customers do not spring from those seeds.

What does this have to do with your paper trail? Using well-designed presentations that clearly show details and promote understanding is a form of communications. Explaining the use of the forms for information helps establish rapport (there’s that word again). Problems will arise in jobs; resolving them successfully will depend in part on the client’s understanding of the process before a problem rears its head.

The better the understanding of the process, the more isolated the problem becomes and therefore the easier it is to resolve. Case in point: We show our clients a blank invoice and explain what each line means so that they will understand the form. When they receive our bill, they need only be concerned with understanding the amount rather than trying to figure out the form as well. The more difficult the form is to decipher, the higher and more unreasonable the amount will seem.

The invoice you send to a client should contain the amount due or earned of the original, less previous payments, the net amount due this period and the balance remaining. This leaves only the amount earned to date as something to be questioned. That narrows the area of discussion to a manageable amount and thereby simplifies the resolution. An invoice without an explanation suggests a need for interpretation — to the seller, a little; to the buyer, a lot — while a proper invoice describes the value of the asset to this point, while you’re here...