Crea Tu Factura De Diseño De Interiores De Ejemplo Para Contabilidad Y Impuestos Sin Esfuerzo

Sample interior design invoice for Accounting and Tax

um yeah again thanks for joining today our first session um was on pricing and profitability kind of built the building blocks of how to think about pricing um how to maximize your profit understand your cost understand your overhead understand your cost rates your billable rates um give you some confidence hopefully in studying those billable rates and making sure that you're that you're maximizing uh your profitability so now that we know that we're going to move on to to invoicing and payments um this is something that I am excited to talk about because I personally love getting paid so hopefully this will help everybody feel a little bit more confident in what they're doing in materio how they're invoicing how they're using the different um documents and so forth so uh just a recap again um pricing and profitability was a couple weeks ago if you missed that please email me km material. I'll go ahead and drop that in the chat and let me know if you'd like me to send you the recording and the slides and the uh calculator to help understand your your markup and margins and and overhead um basically we want to drive down costs maximize profit and um make sure that we're running everything through um the project so that we can and uh make sure that we're getting all the markup and margin on everything and not letting other folks um benefit from from running those parts of the of the project so uh now that we know how to price things we're going to talk about um invoicing items so uh we're going to go over some common mistakes that we we see here at Material some things that I run into uh I looked into the chat history and um came up with some some um Parts uh or some things that we see a lot and um what we're going to do is talk about the different tools that we can use for receiving payments and requesting payments and then touch a little bit on the Qbo sync we're not going to go into depth on that just because it is a little bit of a can of worms and pretty in-depth I would love to get in the get in the weeds in that on that subject if you want to U reach out to me and get more into the Qbo sync we can definitely dive into that that's kind of like my forte and then we're going to talk about best practices and then we're going to demo some of the things live um that we learned and then we'll we'll jump into uh a Q&A so with that um we'll go ahead and start talking about the common mistakes so one of the the most common things that we see at least that I see and What I Hear um are that people are using the wrong document so we have invoices and retainers and deposits and credits that we can collect money with and use for payment but we sometimes get the the terminology confused we want to we want to really lay a baseline of what the the different tools are for and so we're going to start with that and then next I want to talk about manually entering lines on invoices because this is something that we see quite often and it's it's kind of a shortcut and we want to avoid it but whenever you create an invoice you have this option to create this other line item and it's this it's just something that you can type in and it's not tied to anything in the scope of work so when you get to the end of the project you have this money that came in but it's not actually tied to anything in the finances tab in the performance Tab and so it doesn't look like the couch was paid for even though you manually typed in couch so we want to make sure that we avoid that um the next thing that I see are um when there are pricing fluctuations that happen a lot of times this is due to shipping coming in after the fact after you've already invoiced and you're not sure what to do with it um it can cause some discrepancies whether you got paid for that or not we want to make sure that you're getting paid for any of those um pricing discrepancies that go up or down uh and you can also eat the uh and absorb the pricing discrepancies in your favor so prices go down you can always absorb that and not pass that on um lastly the the number one thing that I see when things aren't um working well with uh the Qbo sync it's due to things getting adjusted directly in QuickBooks so one thing that I want to make sure that you take away from this if you are using the Qbo integration which I highly recommend using is that treat materal as this the system of record the source of truth that is the the input system that goes into Qbo if you manipulate things in Qbo um that have to do with your invoices and your deposits your retainers and your credits those adjustments will lock out and have um errors because you'll have discrepancies between what's in Qbo and what's in material so always adjust things in material and let that flow down to um to uh Qbo and uh Isabelle about the uh shipping we we don't want to add Shipp shipping manually to the invoice what we want to do is we want to add shipping directly to the item itself or create a line item in the scope of work that says shipping and then pull that line item or pull that additional uh amount onto an invoice so that that's tied to um the actual scope of work or to something within the project if we type that in manually then that's just going to be hanging out and not be tied to anything it's going to go into QuickBooks as uncategorized income your bookkeeper is going to reach out to you ask why you did that and so best practice is to um always adjust prices on the item itself or create a line item in the scope of work and pull that line item onto the invoice so um having said that let's go to our um this is our Baseline this is um the ways that we receive money in material this may seem a little bit Elementary but I want to make sure that everybody has a a good understanding of what the documents are what these financial instruments are and so first of all we have the um invoice and all the invoice is is a record that a transaction happen it's similar to when you go to Target and check out you get a receipt it's it's the same thing as an invoice you you sold something you sold it to this client you are the seller they are the buyer they paid you this money um and this this records it and this is the uh the legal document for that um retainers and deposits are very similar but they have some really big differences so so a retainer is a general pre payment meaning that somebody has given you a sum of money and that sum of money can be used to pay for anything in the project that can be used for your Design Services any hourly billing any products or other services um it it's it's basically like a gift card you can you can use that that retainer to pay for everything where a deposit is another prepayment but that deposit is earmarked for specific things so if you create a deposit the deposit is going to ask you what is this deposit for and you have to say that this deposit is for the um Design Services uh line item that I have it's for the custom couch that I have and it's for um the the chair and the Ottoman and so that money is held and can only be used to pay pay for those items whenever you create an invoice and we'll kind of go into the the uh the workflows of how that looks uh here in a minute but just in a general sense just always remember that a retainer is General funds and deposit off for specific things um and a credit is money that is owed to the client so that can be due to price fluctuations downward you can have a concession that happened maybe you missed the deadline line and you need to offer a $100 credit to the client to kind of smooth things over um those are funds that can be uh entered and used as payment for future invoices so that's pretty um high level overview uh so we's dive into what uh an invoice is so as mentioned it's just the official document of sale it's when revenue is recognized and what that means is uh if you're on a cruel based accounting um that is when your your income is recognized if you're on cash accounting um that is only when you receive the funds but we're not going to get into the Weeds on that but generally most folks are on acral based accounting so whenever you create an invoice that's when the sale happen that's when the revenue happen and this is important for um reporting purposes and tax purposes so if it's December 31st and you send $100,000 invoice your income for that year is boosted up $100,000 even though you may not have received that $100,000 in that year they may not pay till January 1st well if you sent that inv invoice on December 31st that's when your revenue is is recognized and also that's when sales tax liability um is triggered so if you are um have something on invoice that requires Ires you to collect sales tax when you create that invoice that's when that um sales tax is logged that you collected it and that reporting period of sales tax is going to be um your that invoice is going to included in that that period of of sales tax reporting and so we have four things that can be put on to invoices the first are scope items those are the scope of work you can have you know your Design Services um any type of General requirements any products and services that are in the scope of work you can have your expenses like billable expenses any incidentals um any like thing that you want to pass on to the client you can pull those onto an invoice and then also you can you can invoice for your time so if you are charging hourly you pull your hours onto an invoice and can charge uh the client for for those hours and then lastly this is thing I mentioned earlier the other line um we want to avoid this this is where you can um enter something manually and this is like a a kind of an escape hatch if something just goes Bonkers and you need to like kind of hatch something up you can use this but we want to avoid that at all costs um and so when do we use an invoice we use it whenever we sell something and we can use that at the beginning of the project in the middle of the project at the end of the project um we can um request funds um that's when uh we actually make the sale and what can pay an invoice you can have cash to pay an invoice you can pay an invoice with a retainer if you had a deposit item and put that deposit item on invoice you can pay it with the deposit funds uh if you have credits that um are on that project you can pay with credits uh credit cards wire transfers Bank transfers all that um and typically this is matched with whatever is written in your contract with the with the client and so um now we're going to go on to retainers and so we've got retainers listed here as uh with an icon of a of a wallet with some money in it because you basically are holding on to your client's wallet with their money in it it's not your money just yet um this is the you're you're holding on to the the client's money so this is uh very flexible on how it's used I mentioned earlier you can use this to pay for for anything um down the line on the project um but this opposed to an invoice this is not considered revenue or income if you take a $100,000 retainer on uh December 31st that does not affect your um if your uh income on that fiscal year uh if you're using a cruel accounting so this is uh same thing with sales tax liability it doesn't affect that until you pull that money onto an invoice and so here is just kind of a visual of what that looks like of the retainer request that's the official document when you ever whenever you receive those funds those are considered held funds and then once you create that invoice that's when that money becomes your money and that's when it becomes income and so um this is a great way to protect yourself so that you make sure that you get paid you can move real quick to the procurement process once you um get those retainer funds you can control your cash flow so you don't have to worry about maxing out your credit card or going out of pocket on items take that money up front and use that to your advantage and don't go um don't go uh out on a limb for a client that that may have some payment issues so um the difference between that between a retainer and a deposit again is that their deposit is for specific it so the icon here the visual looks a little bit similar but these have specific items on it and uh again similar to retainer they don't this isn't Revenue it doesn't trigger sales tax liability uh and what it does is same thing as far as getting protection up front um you earmark money for specific items and you can see here that these uh icons again are very similar um it's just that they are for specific items within the scope of work so um again great way to to make sure that you always get paid always recommend that you build your Sops your standard operating procedures with retainers and deposits as a way to protect yourself and you can actually use retainers and deposits together so an example of that is um having a Design Services portion of your contract with the client to where you take a retainer UPF front let's say you take um a $10,000 retainer for a large project you get that money in hand you build out the scope of work you build out your presentation on the boards you present that to your client then you can invoice the client and get that money from retainer to your earned your earned income money and then move on to the client's approvals for everything within that scope of work that you just built out and then you can request the um the deposit and get money upfront for all the all the items within the scope of work so that you you're not fronting any cash up front so get that money then go into the procurement process put that on an invoice after everything is installed in the client space and then close out the project and that that's when that money becomes your money so those are the ways to to receive money and earn money in um materal and next we have uh the credit so credits are a great way to make sure that we are um transparent with the client on anything that any money that is owed um we definitely recommend doing this opposed to just moving a price down like discounting a product um create a a credit so that you have a document of this you can name it whatever you want to name it um as I mentioned earlier if there's a special circumstance where you want to give your your client just a uh an offer of Goodwill you can do that and you can document it they get no ified they say Hey you have this credit for x amount of money it's for XYZ um and that can go a long way and so next we'll talk about best ways to receive money um there's a couple ways to receive money in material the first is using material pay that is the cleanest most integrated way to process payments within material so what that means is um um you can accept Bank transfers or credit cards directly in materio and not have to use any outside platforms um we launched this uh early this year and we've had great response people are really liking it um our accounting partners are really happy with the way that it reports things over to QuickBooks it takes a lot of manual work out of their hands of reconciling multiple systems um this also helps uh match invoices in uh QuickBooks uh we also support stripe um one note on that um strip's making some changes and we're going to be sunsetting um support for that later this year so we can still support that it's just that it will be have to be processed outside of material um after October of this year uh lastly um you can process any type of payment processor um outside of material um whenever you do that say you're using Qbo payments or bill.com or honeybook or any of those other uh payment processes they're all they all have their their strengths and weaknesses um but what happens is you have two um systems to keep up to date because you'll have to um receive money in one system then Market paid in material so that material um is aware that that money was received um same thing with cash you'll have to uh mark that paid manually in in material so now that we know how to request money how to receive money um we're going to talk about what it looks like in QuickBook so again material syncs really well with QuickBooks but I want to emphasize that it's a one-way sync that pushes information to QuickBooks so as you make changes in material we update QuickBooks if you delete a document in material and you're connected to QuickBooks we're going to delete that document from um QuickBooks so we we stay synced with QuickBooks but whenever you make those edits in QuickBooks those do not swim upstream to material and that's when we have those sync errors so I want to emphasize material rights to um QuickBooks but QuickBooks does not write to material um so just if you ever have any questions about that please reach out out to me I am happy to map out um all the uh accounts with you and make sure that the everything's seeking correctly and um as far as uh we got a question in the chat about uh fees with material pay yes there are um processing fees you can choose to um shoulder those fees yourself meaning you can absorb those fees and incur those yourself or you can pass those on to your client uh the credit card fees are 3.2% um with AMX being 3.8% and the a fees are 0.8% with a Max of $20 per transaction so if you have $100,000 um invoice it's going to be a $20 Max um transaction fee for that and what happens is we will take that um money out of your deposit and we'll if you're linked to QuickBooks will automatically record that fee in QuickBooks and take care of the accounting side so it it syncs real nicely with QuickBooks and we we take those fees so you don't you don't have to um worry about accounting for those and uh so just back to um back to uh best practice one other question on mop there is no additional subscription fee to use material pay once you're approved you're live you go you go um straight to processing payments it takes about a day to get approved um once you get approved there's no additional fees there's no gotas there's no no no hidden agenda there um just a 3.2% for credit cards with 3.8% for AMX 8% for a with a Max of $20 um so those are very competitive rates I heard that QuickBooks um is way more than that these days so um if you're looking to get on something that has a standardized spe schedule with no hidden things um definitely go to your uh invoicing page and click material pay and apply so best practices I'm just going to rush through those run short of time because I want to show you some some things uh in material so collect 100% UPF front manage everything in material avoid those manually keyed items write those Sops I'm happy to sit down with you and write those out with you like build the build that out with you um and then use material pay get that um integrated into your system so you don't have to worry about uh processing fees and and processing things in multiple systems all right so now I'm going to uh jump into the uh live demo apologies I'm going kind of fast here um so I'm going to do a deposit first so here we have just a design project it's about a $40,000 project if I want to take a deposit is I've already built out the project I don't have any approvals yet I still need these approvals but what I can do even before I send this to the client I can go to the finances area I can scroll down and go to new deposit and from here I'm going to choose the client I'm going to pick Mr George here I'm going to call this the furniture deposit and just say thanks for your business and from here uh for the deposit I'm just going to add deposit items I'm going to scroll down to my furniture area I'm going to hit add all and next and here you can take either 100% deposit on the furniture or if you want to take a a percentage so that you can use this slider to take a percentage of the deposit so if you want to do a 50% deposit up front you can do that easily material I'm going to go ahead and do 100% add to deposit so now I've got all the the furniture in the project um one thing that uh not sure if everybody's seen or not you can now format the invoice to show everything um in a very streamlined way so I can organize ize everything by location so I have the dining room and living room here we got the items separated by that if I want to collapse and just have dining room and living room I can do that as well um so once you do that and then you can here's the material pay option for the fees it says uh you know 3.2% 3.8% um and there is a 30 30 C fee per transaction apologies for omitting that you can turn off credit cards if you don't want to allow um credit cards to uh if you don't want to deal with credit cards and just have the a you can allow yourself to cover that or have the client cover that um once you send it that will get sent to the client um what that looks like is the client will get an email that looks like this it'll say that um there's a new deposit request for them they'll be request they'll be asked to click on this um once they go in um they'll be sent to this page they can hit pay now they'll enter in their credit card information they'll hit pay and now that is a paid uh deposit so um let me close out this and go back here so now it says sent um since I just paid it I'm going to refresh it and this now shows paid so now that I have a deposit for for that furniture um let's say that I want to go ahead and invoice it I can invoice it by going to new invoice and from here I'm going to add invoice items and oops did not me to click that uh new invoice items and I'm going to VI project scope I'm going to scroll down to the furniture and here these uh little bars are green now because I have the deposit funds so everything else is gray meaning I haven't received funds for those but since I have received funds they are I have an indication here so I'm going to pull those items onto an invoice I want an invoice for 100% of them if I want to add more items I can add more items if I if I have hours logged I could add hours here if I have any billable expenses I could add other I can add those expenses um but notice that the deposit was automatically pulled on here so since that deposit was already pulled on here it's already um use this payment um the thing that wasn't uh the reason that there's a balance on here is because I have a shipping and warehousing fee if I want to turn that off um this invoice is considered uh satisfied so I can now have a satisfied invoice I can send that confirmation to the client and say you I've used these funds to pay for this invoice so U we got a question about if uh uh prices have changed um from the time that we pulled an invoice to the time that sorry the time that we pulled a deposit to the time of invoice that's a great question um let me see here if this is the right one so I have a deposit here and if I uh and this is an example of prices have changed so if I go to new and invoice and go to add invoice items project scope I'm G to go down here and so notice here that the prices have changed a little bit because this price went down and it says that I owe um money here is because the the price went down and this one this dining table um shows partially paid uh 5% paid so if this happens we have the deposit now we're invoicing we're going to add all those items to an invoice hit next again this shows um partially paid we have $218 left at invoice for this so I'm going to hit add to invoice now we have applied that deposit um but we do have the additional amount for this dining table that is due um and then let me see I think we have a credit due here yep so we have a credit due because U something went down so I can apply that credit by hitting that plus button hit apply and now I've applied the credit I've applied the deposit and now I have just a remainder balance of 6352 so this would be a good example of some prices have gone up some prices have gone down and I have u a final inv voice to send to the client um and then a question here about uh shipping and warehousing um where did that come from great question so this is a fee that I added on to this project um based on our conversation in our last um session about pric and profitability I have uh put a 10% shipping and warehousing fee on uh this project so this applies to all my invoices if I didn't want to charge that I could turn this off and then I would have uh a credit due but if I wanted to hold tight to my contract that says I'm going to charge 10% um uh chipping and warehousing fee I'm going to uh include that on this invoice so that that's not included on the deposit but that is included on the invoice so I've got just a recap I had a situation on this where I took a deposit without um knowing for sure what I was going to purchase I had uh received the deposit money some things went up some things went down and now I am uh applying the deposit I have some credits due and then I have a little bit of a balance due and I can send this invoice for final payment and the client can come in here and I can choose to allow credit cards or a um and I can send that and now the client gets notified that there's still a little bit of a balance due on on this invoice and uh the fee does have to be set up per project and the way that that is set up is you go into your scope and you click on this grand total area down here and here's where your fees are you just click edit fees and you can delete a fee you can edit the fee add the fee here um you know if you want to call it a management fee you can charge 20% or whatever you want and then that will be uh tacked on um every invoice will have a 20 in 20% sear charge along with any other fees that you have and um like that invoice I was just on um you have the ability to uh toggle that that fee on and off once you add something um to the invoice I'm just going to add some stuff here and show you what that looks like so now I have that shipping warehousing fee and I also have uh the management fee on there so this is um a project level fee that gets tacked on to um each invoice all right I know we're overtime I have a few more minutes if if anybody has any questions um I'm happy to answer them uh if not I I appreciate everybody everybody showing up today um I know that finances aren't the most uh luxurious thing to talk about um but all right we got a question here can see what Chang after the payment yeah uh so the question is is there a way that the client can can understand where the credits came from and um what has happened after the fact so what what the the trail the paper trail here is that this invoice here um had that credit here the 62526 and this created a draft credit based on me creating that invoice and having that credit due so what I need to do now is published this and that will allow the client to have visibility to this credit and understand that the um dep the credit came from the deposit on the sofa and they can see originally that the price was supposed to be 28 7375 and then it got um moved downward to 23143 so the um the way the client can understand what happened is um typically through through the memo area in the invoice or the credit you can you can give some additional context here um before you send that off um same with the invoice you can you can add a memo and let them know what's going on but otherwise the official um documents are going to say that this invoice was for this this credit was for this and um if you don't explicitly connect the dots for them hopefully uh they can connect the dots with the published credit and the um the invoice here all right uh any other credit or any other questions sales tax so the the way that the the sales tax works is that um we actually create a credit for the sales tax as well so as soon as you publish the credit we will amend the uh the sales tax liability as well if you're synced to QuickBooks we will sync that information over to QuickBooks and it'll reduce your sales tax liability when you create that credit and then the question is there's something in the works or employees time can be easily transferred material for a billing you don't ENT twice okay so um not just yet I don't believe let me just go back to um the question was can we um import uh time entries not yet um that's a great idea what I can do is take that suggest into the product team and see if there's something that we can um put on our road map so that we can uh you know you can upload a CSV of time entries and get that um into your billable time area so Shelly thank you for recommending that it's a great idea all right uh any other questions happy to answer another question or um we can close this out um if not uh thank you again hopefully you walked away with um something valuable here happy to chat more and get in the weeds email me at km material. always happy this is my like nerdy area so um always happy to talk more finances and debits and credits and all that good stuff so um thanks again have a good rest of your week uh have a good weekend and hopefully talk to you soon reach out if you need anything bye