Hands up if you are the type of Account Manager who enjoys invoicing? Yes, I see a hand, right down the back of the room. For those of us who dread the moment our accountant asks "have you completed your invoicing yet?", you are not alone, but it's a sad irony that one of an Account Manager's least favourite tasks is also one of the most important tasks in any agency. Without your invoicing your company will not make money.
No invoicing = no payments = no profit = bye bye business
I am going to make a hopeful assumption that you are working at a company with a decent job control system, and that this system will indicate when you have opened a job but not yet invoiced it out.
You should be able to view a list (or generate a report) that will show you which jobs are yet to be invoiced. You will then make the call whether you invoice each job this month (fully or part-charged), roll the job over to the next month, or close the job without charging it to the client.
If your company does not use a purpose-designed job control system, I recommend you maintain your own WIP list with some way of coding the jobs that are ready for invoicing.
Ideally you're best to charge out jobs in one hit, rather than giving your client a series of invoices. This is cleaner and easier for both parties to reconcile invoices to a job. However, in our world of long campaigns and multi-month website development projects, you'll need to invoice your client in instalments. This eventuality should be clearly communicated to your client at the beginning of the project, so your part-charges come as no surprise.
Part-charging works best if you have a quote pre-approved for the job, so at least your client will be aware of what the total cost of the project will be.
One huge benefit of part-charging is creating cash-flow for your business. You are also creating the revenue to pay for external (as well as internal) costs that you have accumulated throughout the job (e.g. print or photography, etc).
Part-charging helps to keep a long-term project moving. If a client has to pay for work that is not yet completed (or live), invoicing helps to give them the impetus to complete the project. Otherwise, some projects (especially if they are driven by clients who are not particularly invested in their company or the job at hand) could drag on indefinitely.
The amount to part-charge could be arbitrary, but you should be able to justify the figure to your client if asked. It could be based on the number of hours your team has worked during that month (plus external costs). The amount could reflect a project's stages (e.g. website development) where certain milestones have been completed and can be invoiced. It could be that you are working on a 3 month campaign. In this scenario, you will have clearly outlined (to your client) the components which will be invoiced in each of the three months, so they are prepared for the cost spread.
The invoice description should indicate that the amount is a part-charge. For example:
Part-invoice for work completed during July. Final invoice to be supplied in August.
Includes art direction, design and strategy as per quote #12345 (3 June 2014).
Part-invoice for work completed during July. Includes Milestone 2 (wireframes) and Milestone 3 (PSDs) as per website contract supplied 3 June 2014.
Your invoice will not require as much detail as the quote, however it's a good idea to refer to the quote number in your description (especially if your client has not given you a Purchase Order, or PO number). A quote number then becomes a point of reconciliation should your client have questions about the invoice detail or total amount.
The three areas of an invoice that an Account Manager should be most particular about are the:
This should be a reflection of the title you have used throughout the project. It will (usually) replicate your quote title and be a title that means something to your client.
The invoice description should be concise, but with enough information to make sense to your client. It is up to you whether you break out the invoice into separate line items (e.g. design, print, photography, etc). If the invoice directly correlates to a quote, then you will not need to show line item detail in the invoice. If, say, the print component was added to the project after the quoting stage, then it would be best to show that as a separate line on the invoice.
EXAMPLE: invoice relating to a quote
EXAMPLE: invoice without a quote.
In this example it is best to refer to the person who commissioned the job and the date of the request.
EXAMPLE: invoice for a campaign
It would be wise to supply your client with a separate spreadsheet breakdown of the costs included in the invoice.
Part-invoice for campaign work during June 2014. Includes design, media (TV and radio) and strategy, as per separate spreadsheet supplied (dated 30 June).
The purchase order number
Please refer to AM-Insider article Purchase orders and PO numbers for more detail on why a PO number can be crucial for your project.
If your client has given you a PO number, then you'll need to remember to include it on the invoice. This will be their way of reconciling the invoice with their own system.
Some companies refuse to pay an invoice if it does not contain their PO number. With some clients, trying to coax a PO number from them is like extracting teeth, so you'll need to request the PO number in enough time before you need to invoice the job.
In New Zealand, under normal terms of trade for a company on a credit account, payment is due on the 20th day of the month after the date of invoice. This means that you can invoice your client any day up until the last day of the month. However, unless you relish spending half a day (at the end of the month) doing all your invoicing, it's best to spread your invoicing out during the month if you can.
If your client is on a 7-day terms of trade agreement, you should invoice your client as soon as the job is complete and in your client's hands (or live).
If you are billing for work completed during that month, it's best that you leave the invoice generation until the last day of the month (or the 1st day of the month following) so you can capture as much time and costs as possible.
The main thing is to remember to invoice (in good time and accurately)...and keep the lifeblood of your agency flowing!