Invoicing and accounting were never an easy subject. We’ve always struggled in school and at times even today. This is why only a handful of scholars get to become the best of CAs. and there is literally no bad at that. Each one of us is different and brilliant in our fields. There is nothing to be embarrassed about.Read on and know the important tips to reduce invoicing related stress.
Now you must be wondering the whole reason behind this session of TEDTalk. So, while scrolling Reddit a couple of days ago, I came across a post that haunted me for hours. It was about how an amazingly talented photographer was embarrassed about successfully doing his business because of the lack of some admin skills.
I wondered how this must be a problem of many who do not say it. This seemingly minor obstacle became a major problem for someone to be successful. I could not control but sharing this with everyone who is facing these problems.
But, first, please read the exact situation
“I’ve been working for a company led by a successful photographer in the UK for a few years until about a year ago when I left the country for personal reasons. I’ve remained close to the company and started doing freelance work for them as a photographer, doing behind the scenes photography, and work on other projects. It is however really hard for me to set my own prices as I haven’t done freelance work before and don’t really know how to break down my costs and adjusting my rates, as I’ve been offered 200£ one time and 2000£ another time for projects that took about the same amount of work. A lot of the jobs I’ve been getting are also very spontaneous, asking me to fly out on location within just a few days so there often isn’t much time for preparation.
So when it comes down to sending my invoices I end up procrastinating and building up anxiety about it to the point where I’ve just ended up doing work for free a couple of times already. I’ve asked other photographer friends what their process is but never really managed to get a proper response from them and I just get ashamed to tell them how helpless I am. I really love my work but I’m embarrassed by my lack of professionalism when it comes to the admin side of it and it’s making me doubt if I should even pursue this career or just find regular employment again. I’m taking this to Reddit hoping that I could maybe get some pointers in the right direction.”
This particular issue has sparked so many questions that need critical understanding and precise targeting. As an invoicing expert, I would like to resolve each of the queries of my friend u/gabbacus (Reddit Username).
- How to break down project costing to justify every cost?
- What factors to take into consideration while deciding cost?
- How much is worth your services?
- Why are projects estimated differently at different times?
- How to create an Invoice that is self-explanatory?
- How important are estimates and charges list?
- Why is it important to seek expert guidance?
- Lastly, Invoicing is a minor issue to create any embarrassment.
Keep on reading to find out solutions to avoid complications while invoicing and successfully carry out administration jobs without any fail.
Question 1- How to break down a project costing to justify every cost?
In any project that you carry out, there are multiple costs involved that your customers might not be aware of and consider you’re overcharging. To take your customer in full trust, break down the cost for them to help them understand better. For example, a photographer’s full charges can include-
- Time billing
- Photography cost
- Travel charges
- Rental charges
- Markup charges
- Additional services
- Consultation fees (if any)
The above is the precise breakdown of costs a photographer should include in their invoices. Apart from this, there are multiple other types of invoices that you can create such as
Lump-sum billing– for collectively charging prices for the project. It is basically for bigger projects including many folds of project management.
Up-set billing– a combination of time-cost and lump-sum billing, up-set billing is about charging a lump-sum to work in a particular time frame.
Question 2- What factors to take into consideration while deciding cost?
It might not seem important at first, but how you invoice photography clients can have a big impact on the success of a job, and your profit margin.
A key factor/tip that will be directly relatable to your business is bill your clients three or four times more the payment amount you want to take home. There is nothing unethical about it. Because this cost will include all your other costs associated. For say, if you want to take $25 at the end of the day home, bill your clients $100 to $105. This amount will help you cover up all the costs that you have invested and later take back home the desired income you want to. Some photographers contrast to the hourly billing and suggest it is not the best way, but it is important as a photographer to value your time and bill on the basis of hours invested.
On the other hand, the other most chosen method of billing clients is billing for products. Ie. prints, books, photos, etc. it is generally a totally different billing segment and not mixed with time-based billing.
In a photography business, an invoice is generally split into two parts- the cost to do the work (taking pictures) and the cost to use the pictures(picture licensing).
Therefore, when you bill next time, make sure you are taking into consideration both of the most important factors and reduce invoicing related stress.
Question 3- How much to worth your services?
A photography business is one of the most diverse business segments in the society out there. Where getting appreciated and acknowledged is a long road to achieving achieve. Therefore, if you will not value your pieces of art, no one out there will ever too.
Now, once you firmly appreciate your work. You can let your clients perceive higher values of your services fairly quickly. Most importantly, a business presentation is everything. More so in the business of art. Do not forget to consider these factors while upgrading your business.
- Decorate your space to make it more professional and welcoming.
- Your packaging is your branding. Ensure every packaging material you use is fully branded and professional with logo and information.
- Let your customers experience a VIP customer service experience.
- Photography is a luxury. Just like people invest in expensive bags and cars, they like to invest in photography. Be the one their best money can only buy.
- Always stay ahead of your competition. Regularly track them and create newer strategies to stay ahead and relevant all the time.
Question 4- Why are projects estimated differently at different times?
Now, this is a complete situation based circumstance. Many times as businessmen we tend to make decisions that are of best of interests at a given point of time. Make sure to consider a few factors while estimating projects-
- The kind of project you’re working on
- Your current business needs
- Past experience of the projects
- Project involvement needs
- Need for supplies
- Calculate hours to be invested.
Question 5- How to create an Invoice that is self-explanatory?
Well, an invoice is your most professional document, apart from being your reward to cash for services. It is your most eligible branding and a communicating piece of business art. An online invoice should be your most calculated, explanatory, and itemized list to help clients understand prices well.
Here are all the details an invoice must have-
- Client’s name
- Client’s address
- Business name
- Address of the Business
- Business contact details
- Itemized list of services, products
- Taxes and description
- Payment details
- Terms and conditions
- Payment due dates
- Lastly, thank you notes
Question 6- How important are estimates and charges list?
Estimates are your gateway to new projects. They tell your clients how much they will be paying for services that will be offered to them. An estimate is a sum of items, and tentative expenses. It also includes tentative extra charges that might incur during the course of the project. The estimated cost of a work is a close approximation of its actual cost.
Question 7- Why is it important to seek expert guidance?
While you’re a photography expert, you still need expert guidance on administration tasks that you’re still a noob to. Because your entire cash flow depends on your invoicing. It is the guardian to help your business sustain and grow. An expert just does not need to be a person. It can also be an invoicing software like Invoicera that guides you at each step while creating an invoice or managing business payables and receivables. Take a look at how Invoicera helps you manage your entire business activities.
Invoicera is one of the leading online invoice software in the market. The cloud-based invoicing and billing software has catered to more than 3 million users around the globe for the past 13 years.
The invoicing software offers many unique features customized to specific business needs of freelancers, small businesses, and enterprises. It helps you to automate and simplify your business processes and communication with online invoicing and payments, expense management, recurring/subscription billing, client/vendor panels, time tracking, invoice approval process, multilingual & multi-currency support, staff permissions, financial reporting & analysis, purchase order management.
- Invoice approval process/ customized approval process
- Two-factor authentication
- Multiple business access
- 30+payment gateways
- 3 layers account security
- Staff management
- A/R&A/P Management
- Multi-lingual compatible Invoices
- Online invoice software
- Subscription billing management
- Project management
- Time tracking software
- Custom workflow management
- Expense management
- Customize Invoicing solution
- Multi- Business Management
- Third Party Integration
Lastly, Invoicing is a minor issue to create any embarrassment.
Invoicing and other administration jobs of managing expenses, receivables and other cashflow are important to a business. They decide on your success. As a business owner, it is expected for you to be a jack of all trades. But, it is completely fine to not know a few things. The world can teach them to you if you have the desire to learn.
Invoicing is one of the easiest documents, yet more complicated. But, trust me once you start creating these on a regular basis, they become seamless. You just need to be smart enough to utilize technology in the right manner so that it sets the pace for you. Software like Invoicera guides you throughout the process of invoicing, expense management, payments to become a pro and hence reduce invoicing related stress.