Memo 43 – The Process of Invoicing – Check if Invoices have been raised

What is the problem

• A cynical view of building and construction around the world: “not paying” is the standard business model of many firms in the indusry.
• Once you give away your product (for free), there is zero incentive for a client to pay.
• If a client doesn’t pay does that affect you? Absolutely, it affects you – it might not seem like it – but it affects everything in a business: remuneration, the quality of our infrastructure, training, our ability to take on jobs, our ability to win work.

What is the process?

1. We raise an invoice.

• I typically raise an invoice on IFA.
• If you don’t mark it as IFA, I will not raise an invoice – unless you tell me.
• Sometimes we may need to raise an invoice BEFORE you get to IFA. In those instances, please notify me.

2. I show your client’s bookkeeper your “approval emails” and purchase orders
3. The bookkeeper will pay.

• If the book keeper sees no approvals, or no purchase order, they will not pay us.

4. We get paid.
5. And then we give away our work.

Things may vary, depending on the job, but that’s it in a nuthsell.

Check Payment terms before:

• releasing IFA drawings,
• before releasing IFC drawings
• before starting a job.

Alert someone if you see that invoices have not been raised:

• If you find that we need to raise invoices, and no invoices have been raised: then that is a big problem: how will everyone get paid without an invoice being raised? You will need to immediately alert someone about this. Occassionally things get missed.
• If you see that we need to collect 100% before IFC is released – then again, check that invoices have been raised, and ensure that the money has been collected BEFORE releasing IFC drawings.

But the Managing Director said: “we have been paid” therefore I sent the drawings:

• Sorry but that is not a good enough. Your MD is dealing with 10s of emails / calls etc at the same time, and makes a LOT OF MISTAKES re: invoicing. This has happened many, many, many times. Many times. Q8715 is the latest example of a mistake in invoicing. YOU MUST CHECK that invoices have been raised and sent – which is different from checking whether we have been paid. In other words, how can we be paid, if we haven’t even received an invoice?

How do I check?

Check on the line item itself: as you can see, no invoice has been raised for line item 7:

But two people said two different things:

• If you have received conflicting instructions, then you need to clarify these things before sending all the drawings. Once the drawings are sent, then it is very, very difficult to collect payment from certain clients.