Key takeaways
What this article covers, in order:
- Creating an Estimate & converting estimate to an invoice
- Planning the estimate
- Creating the estimate
- From Estimate to Invoice
- Managing approvals and client communication
- Invoicing workflow best practices
Creating an Estimate & converting estimate to an invoice
Planning the estimate
This is necessary because you would need to gather all project information and costs prior to creating an estimate. Milestone tasks and proper task time estimation, so your total is real work done. Document assumptions and provide estimates notes
Creating the estimate
Make sure to include specific item descriptions, quantities, unit prices, labor rates or labor taxes, and any one-time fees as applicable. Line items that can be scanned quickly that allow clients to approve different sections at a time if need be. Enter a validity date and payment conditions so that there is no point of confusion.
Key fields to include
- Client contact information and billing address
- Item descriptions and quantities
- Unit prices, taxes and labour rates
- Terms of Validity, payment & assumptions
From Estimate to Invoice
When client agrees to move ahead, you Snooze the approved estimate. Approve estimate and create invoice that mirrors line items and sums as is. The invoice must contain an invoice number, issue date and due date and any part of deposits or retainer amounts that are applied credits.
When to convert
Use the get paid now as soon as your client agrees (unless your contract stipulates staged billing). Convert only the part of the bill related to a completed milestone for milestone billing. When you bill by the hour, avoid having large balances on your account by regularly converting.
Managing approvals and client communication
Send your estimates with clear terms as well a request for approval. Status fields or a simple log of pending / approved / declined can track approvals. Summary of changes in communications. If any client asks for a change to the estimate, run an update on the estimate and resend rather than creating a new one.
Invoicing workflow best practices
- Make your estimate and invoice numbers sequential and easy to trace.
- Even if not required by your localization, remember to attach the approved estimate to the invoice for records.
- The app allows you to automate reminders of not paid invoices after the due date.
Making the transition clean
When converting, copy all line details to avoid rewriting errors. Apply prepayments or credits to reflect the net amount due on the invoice. Attach the approved estimate with your invoice for audit trails and clarification to clients.
Handling partial conversions and deposits
Display any deposit paid by a client as an individual line that can be used as a credit in your invoice. Stage work. Convert just the approved portion of items, and leave the rest pending. Having this way helps on the cash flow and retain clarity on billing.
Checklist common before sending an invoice
- Validate customer information & billing address
- Invoice number, dates and payment instructions
In this way, pre-action abuse can be avoided and the totals match the approved estimate. In this case, attach the accepted estimate along with other documents.
Record keeping and reporting
Subscribe to the original estimate and final invoice in order to track change history and how scope evolved. Use the simple reports for converted to pending estimates and contract to measure conversion rate and forecasted revenue.
Security and approvals
Keep control over who can convert estimates to an invoice so that no unintentional billing occurs. Embrace approval checkboxes or digital signatures to confirm acceptance from clients and store concurrences alongside the invoice for better legal defense.
Measuring success
Ratio of estimates converted to invoices, as well as average time from estimate created to conversion. These metrics help you identify the bottlenecks in your quoting and follow-up process. Revenue comes from small workflow improvements and lower disputes.
