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Aia invoice form for organizations

does your company have  multi-million dollar contracts   if so then you will probably have to match the  work section of the contract to the format of the   when billing your  client this is the items list that we have been   working with during the entire course but let's  quickly review what we learned in the prior video   about how the items list is supposed to work  in quickbooks and then we'll talk about how   it relates to the billing requirements  of the if you have any questions about this topic you can  leave them in the comments section below and i'll   do my best to help you and of course if you feel  the video helped you i hope you will click like   and don't forget to subscribe to get  updates on new videos that come out all   the time this is the items list that we have  been working with during the entire course   but let's quickly review what  we learned in the prior video   about how the items list is supposed to work  in quickbooks and then we'll talk about how   it relates to the billing requirements  of the now this is the items list that we have been using  for the course and if you remember we set these   items up at the beginning of the course when we  set up everything for your contractor file if   you remember these items are connected to income  accounts that you had put in the chart of accounts   when you originally set up the file and you need  several income accounts in your chart of accounts   if you want to see a detail of the  income section of your profit and loss   if you look at a typical quickbooks profit and  loss report the income section is on top and   the expense section is below and if you want to  see each area that money is coming in from you   would have to create separate income accounts  so that those accounts would show up at the top   of the profit and loss and show you how much  money came into each of those income accounts   to get the total income and then eventually  subtract out the expenses for the net income   now how does the flow of information work well  you start by putting these items on an estimate   because the estimate reflects the entire contract  and when you put the items on the estimate it's   at the beginning of the contract so 100 of the  amount you expect to bill for the entire contract   is what gets listed on the original estimate then  when you build the clients for each piece of the   work that's done you will only put on the items  section of the invoice the amount of each item   that was done during that specific phase of the  job and that's what you bill your client for   now in quickbooks the most important thing to  remember is that it's the moment that you put   the items on the invoice that the income accounts  will increase the income accounts do not increase   when you create the estimate and the income  accounts do not increase when you finally get   paid for the invoice the income accounts that are  connected to the items increase when you put the   items on the invoice and save the invoice so  where do they first come from in other words   how do you decide what items to put on the  estimate or invoice well usually they come from a   contract and a contract a written contract with a  contractor for work to be done over several months   usually has several articles in the contract  and there are many pages of each contract   the most important section for purposes of this  video is the section called work of this contract   that's really where you decide which items from  your items list to put on the estimate and to   put on the invoice and to bill in partial phases  for progress invoicing so these items one by one   are actually explicitly stated on the  contract for example under article number two   the first description of work might be  carpentry and that would be the name of the item   and then in the contract you would have  something called a sub description and it's   the sub description that's written directly  under the description of the item of work   that really explains exactly what will be done  regarding that item for each phase of the contract   for example mason work that might be the name of  your item but that might be the description of the   title of that piece of work in the contract and  then of course in the contract mason work would   have a sub description that clearly explains  physically what the person is going to receive   from the contractor for that specific item that  will be billed as one of the line items in the   invoices the main description is the name of  the build item in the item column of the invoice   but it's the sub description that's what you use  to decide how much of the work is done and the   sub description goes in the description  field on the same line of the invoice   as the name of the item for example if the work  on this contract called for two items mason work   and carpentry and this was the description of the  exact mason work you're going to do and this was a   description of the exact carpentry that you're  going to do how would it look on the invoice   well the title mason work which is the description  of that piece would go in the item code or item   name column and then the sub description in  the contract is what would go on the same line   in the description field of the invoice so  you can see which or how many items of work   in each section of the work uh done in the  description of the contract and for each item   you can clearly see in the description field  exactly what the contractor is supposed to do   in order to bill the client for that item of work   but then the question is how do you know how  much to bill for any particular phase of the job   well it's common sense you would physically look  at all of the work that had been done for that   particular item since the last invoice and you  would count and you would use math and then you   would compare it to the sub description  exactly as it's written in the contract   and then you would decide for that particular  invoice for that part of the job exactly how   much to bill on that invoice comparing  the work to what it says on the job   always consider what was billed in prior phases  we know that the estimate has a hundred percent of   each item listed for each item on the estimate but  if you only finished 25 of the work in phase one   you could only bill for 25 but be careful  when you finish the next phase of the contract   you have to consider how much work is done in the  prior phase and most often you're required to show   on that invoice how much work was done in all the  work that was done actually in the prior invoices   and the specific amount of work that was done  in this phase and then after this invoice the   percent of the job that was billed and assumed to  be physically finished and it's only when you get   up to the last invoice of the job that you can  clearly see that you finished a hundred percent   so in this example phase three forty  percent of the work was done in phase three   but this phase three invoice should have a column  that shows the prior sixty percent finished   and also show a hundred percent finished  uh at the moment you bill the final invoice billing for physical contracts can be detailed and  complex people outside the contract may need to   evaluate the contract but may not understand some  of the details it's safer to make a contract and   the billing agreement in a standardized way that's  why our good friends at the american institute   of architects have come up with a standardized  way of classifying the different trade services   and classifying the different items  of service that they give so contracts   can be understood by objective parties  and uh be a little bit more clear about   each phase of the work done multi-million dollar  contracts often require billing in format   it's easier to settle disputes objectively and  it's easier to determine the billable amounts   contracts that are in the format from the american  institute of architects the work section of the   contract that determines how the contract will  be billed and if you have multi-million dollar   contracts you must send your job invoices to your  clients in the specific format from the american   institute of architects this is a request  for payment for that phase of the job   it must be exactly in the format of the template  given for that type of contract it must list each   item being billed the amount billed for and the  total build in prior invoices for the same job   and the same percent and amount completed to  date usually these forms are made with excel   because they have many lines of  details and the format must be exact   the important point here is that you must send  the bill in this format whether you use quickbooks   or not and that means that you cannot use the  invoices that come from quickbooks you can only   record the same things in quickbooks as you put  in the excel sheet when you invoice the client   invoices sent in format can have many  pages but the most important page is what   they call the continuation sheet or schedule  of values everyone has a different word for it   notice it has everything that's required  in an invoice when sent from the format   remember you are required to show all  the accumulated totals for each line   for all the prior invoices that were sent when  sending a new invoice in format and in order   to know how much to bill for this phase of the  job you would do the same thing that you would   do if you were using quickbooks you would look at  the work to see the amount of work done since the   last invoice and then you would compare it to the  description and sub description in the contract   and then you would use a calculator and decide  how much to bill for on this particular invoice   for this phase of the job the most important  numbers are summarized on the last page   of the official invoice sent the summary  section shows the three most important numbers   that the client needs to look at when deciding  to pay it shows the original sum it shows the sum   after all change orders of course it's going to  show the retainage and then finally it shows the   amount we're requesting that they pay on this  particular invoice for this phase of the job   now if you're using billing as  well as quickbooks you have two choices   you could bill in the detailed way or you  could record into quickbooks in the summary way   now the detailed way means that you take  everything line by line that's on the   continuation sheet and the schedule of  values in the bill and make sure   that matches line by line in the quickbooks  file in the invoice that you record for that   phase of the job in both cases you could put a  percent complete or an amount but it has to be   exactly the same each line of the invoice matching  each line of the continuation sheet in the excel   part of the bill that you send to the client  now remember what happens when we do progress   invoicing as soon as we choose a job with an  estimate this message pops up and the choice you   make if you're doing billing and quickbooks is  the bottom choice here create invoice for selected   items or for percentages of each item when  you make this choice you will get this window   specify invoice amounts for items on estimate and  it's this window line by line that you have to   make match the bill that you're going to send in  the format of the    they both allow you to put a percent complete or  an amount complete and they'll calculate the other   if you put one and you're able to put all the  details that's in the continuation sheet from    into this window when you do progress invoicing  and you want the invoices that you record in   quickbooks to be exactly the same as the invoices  that you send to the client there's another way   that you could record it into quickbooks you  could leave the details in the excel sheet   that you sent to the client and in your quickbooks  you could simply look at the last page of the bill   and simply enter the three summary numbers that  are the most important numbers in the last page   and only those three numbers would be the numbers  that you would enter into quickbooks when you make   an estimate and when you make the succeeding  invoices for that estimate or the invoices   that will follow in succession and if you do that  i'm telling you you will still get everything you   need from quickbooks you will still be able to  get everything in fact most of my contractors   don't want a cluttered income section of their  profit and loss and don't want a whole bunch of   income accounts in their chart of accounts  they're totally satisfied with having just   one income account and one item on their items  list because as contractors they have some clear   understanding of where their money is coming in  from and the expenses and tracking them are the   most important thing you can still benefit from  all of the quickbooks features for contractors   you can still track profit and loss by job if  you have only one item and one income account   you can still bill clients for checks and  vendors bills you can still track time by job   and by worker and you can still see the job  progress percent complete for your progress   invoicing most contractors would prefer to have  one item on one income item on their items list   and one income account in their chart of accounts  and keep things simple in fact most contractors   that i know don't want a whole bunch of detail in  the income section of their profit and loss and   also don't need a whole bunch of income accounts  in their chart of accounts most of them need only   one income account and one item if you do it this  way in quickbooks and leave the details in the   continuation sheet from you can still benefit  from all the quickbooks features for contractors   you can still track profit and loss by job you can  still bill clients for checks and vendors bills   that are designated for those jobs you  can still track time by job and worker   and you can still see the percent complete of  each job in your progress invoicing reports   so it would be better for most of you to just put  one item on your items list and have one income   account showing your profit and loss because most  of you already know where your money comes in   and how it comes in and who it comes in from so  the way to do the summary is to take these three   numbers and make sure they get put as two simple  items on the invoice one item for earned one item   for retainage and the invoice should show the  same net due in the invoice and quickbooks as   a summary that it does on the last page of the  bill from you can learn everything you need   in quickbooks regarding contractor features  by watching the full playlist that this video   is a part of you can just click the link in the  comment field or under the first paragraph in   the description field and there's also links  in the top right of the video as it plays you