The Differences Between a Quote, an Invoice, and a Work Order
Many small business owners enjoy service-related work because they like working in the field instead of sitting behind a desk all day handling phone calls and filing paperwork. They work very hard to ensure 100% customer satisfaction by collaborating with their employees, whether the job calls for a meticulously manicured lawn or the refurbishing of a home air conditioner.
Yet, running a small field service business requires the organization and management of paperwork. It’s a must-do job performed primarily by the small business owner.
Here is a list of some of the paperwork you can expect to organize and manage your field service business:
- Employee Time Sheets
- Tax Forms
- Job Schedules
- Employee Schedules
- Job Quotes
- Work Orders
The last three forms of paperwork – invoices, job quotes, and work orders – often confuse small business owners. You have to know the differences between the three types of paperwork to eliminate the inefficiencies that bog down your field service business.
Each of the three types of paperwork discussed in this article come in a specific order. The impetus behind a new project derives from a work order that originates with a customer. The customer creates the work order internally and then sends it out to a field service business.
Types of Work Orders
Work orders come in a wide variety of forms. You can receive a work order for a one-time only project, such as a landscaping company who was requested to create a floral display around a home.
Recurring work orders stipulate the requested tasks that you perform on a regularly scheduled basis. For example, a lawn care business receives a work order for cutting the grass of a church one time per week during the growing season.
Preventive maintenance work orders keep HVAC small businesses very busy, as heating, cooling, and ventilation systems need maintenance to perform optimally during peak seasonal use.
A job quote represents your final bid price after taking into consideration several cost factors. This isn’t the step when you bill customers. It’s the step that gets the job contract ball rolling.
How to Prepare a Job Quote
First, small business owners in the field service industry must write down everything they expect to do for a customer. The activities can range from mowing a commercial property to performing general contractor work on a large-scale project. Then, you spend time researching the cost of labor and materials that you expect to need to produce an exemplary service. This step must include extensive planning as you accurately detail every cost. After costing out the project, small business owners need to decide how much profit they want to generate. Finally, you set the price for the project based on your research, which should include knowing the service industry standard rate for the project.
Remember that you also have to consider accounting, health insurance, business liability insurance, and marketing costs to devising an accurate job quote.
Often referred to as the sales invoice, an invoice goes out to a customer after you complete a project to the customer’s satisfaction. Invoices represent the most important document for your small field service business, as it helps you generate cash to create more job quotes.
High-quality invoices include the following sections:
- Invoice Date
- Invoice Number
- Amount Due
- Payment Due Date
- Clear Description of Services Provided
- Your Small Business Information
- Customer Information
For large projects, you have the option to divide the project into phases. After completing one phase of a project, you will send out an invoice and make sure you collect the cash before beginning to work on the next phase of the project.
As you see, a work order, a job quote, and an invoice possess unique characteristics that work seamlessly together to help you complete high-quality projects within the agreed upon period.