HELP!! Small Business question

[Aspen]

I guess this is mostly a calendering/invoicing issue, but I am hoping that those of you running businesses out of home offices will have some suggestions for us. He is agreeing to try GTD in Sept, so I am hoping that we can figure out good ways to do things that will make us both more efficient.

We run two small businesses because it is easier than putting them together. Mine is very simple. I subcontract for my father's company and I don't even have to invoice, just get my checks like clockwork covering dates worked. I log them into our business accounting software, deposit the checks into our business account and I'm done.

My husband's is more complicated. For almost 5 years he subcontracted for 2 middleman type companies who contracted with the actual locations where my husband does the work for them. We invoiced both of companies on the 1st and 15th of each month for all work done up to that date. For example the work he does on the 16th-31st is paid on the first of the next month. He is NOT a records guy, so he had a not great but workable solution involving hardscape calendering the days worked and using that when making out his invoices. Had some trouble when we rearranged the schedule for vacation because he wasn't perfect at keeping the calendar up to date, but since we were typing up an invoice within a week or so, between the two of us we could remember anything he changed. (He works by the job and usually does everything in each city on a particular day, but that can vary as long as the work gets done in that week.)

However, he has scaled back on the work we are doing through the middlemen (they take a decent chunk off the top) and is doing more work on his own. Now we are getting paid directly from the businesses at the locations where he works and getting more money per job--good things except for his calendaring method is not getting it done. A lot of these places have insane pay schedules (Company X pays in person 30 days from each date worked), (Company Y sends out checks every Thursday, so for example all work done between August 25-September 2 is paid in a check supposedly sent out on Sept 7), and we still do work for the original companies which we invoice every 1st and 15th, and so on. My husband is having trouble remembering exactly what the situation was 30 days ago (considering we were rearranging work for 2 weeks prior to leaving for Europe, getting everything covered while we were gone, and then rearranging everything for 2 weeks after we got home because we were both in school.)

This is an extreme situation for us (life is chaotic but not THIS chaotic), but it has really revealed the need for a different logging and invoicing system. He is a techie gadgets guy, but I can't even get him to regularly remember to print out a calendar for me at the end of the month so I can "quality control" all the work done with what we have been paid. I have to record everything in our business account off the invoices and the checks, but the new pay schedules are confusing that method. We spent 15 minutes this morning trying to figure out which dates he was at a local location so that he could pick up his check today.

WE NEED HELP!! Can anyone suggest a records keeping solution that would be low maintenence. The most I can seem to get him to sit down and update everything is when he is making out his invoices twice a month. We work from an "ideal" each month for everything regularly scheduled on each day, but almost no month turns out to be ideal....this company wants to hold off for 2 weeks, that one wants 2 extra things done, etc In addition to playing havoc with our records it also is playing havoc with our household budget because I can never figure out when a check is coming in!

 

[Cpu_Modern]

I am a free lance too.

In addition to playing havoc with our records it also is playing havoc with our household budget because I can never figure out when a check is coming in!

Regarding your household budget I strongly recommend the program you can find at http://youneedabudget.com/ (I do not have any affiliation wahtsoever with that business).

The golden rule ot of this, that will save your a***, if you obbey to it: you live off of the money you earned last month. That is, in Feb you spend the money you earned in Jan. It is simple and it gives you financial ease.

If I had the chance to just give you one tip, this would it be.

Regarding the invoicing question: you need a system, I don't know what would work for you. Mine's is pretty simple:

- every gtd-project gets it's project number two digits for the year plus three digits as a running number throughoout the year. Example:

06203 - websitestrategyproposal quackquackcompany
06204 - dosomestuffagainstthecops
06205 - workonbrochure tapletopthinkercorp.

...and so on

I have it so on my projects list and the folders in my general reference and on my computer are named the same way.

Now, writing an invoice, I give each invoice its number refering to the projects running number:

06203.01 websitestrategyproposal quackquackcompany upfront charge
06203.02 websitestrategyproposal quackquackcompany aftermath money

This system works well for me.

 

[jpm]

Contracting and Billing

This is a pretty common problem. I ran a contract business for several years and we developed a pretty simple system for handling this. Our contract terms ranged from invoicing on monday for the previous weeks work and getting paid on friday to invoicing monthly with net 90 terms. Offering terms for contract work is generally expected and you often need to accomodate the customer in order to get the work.

I don't know what your accounting software is but this can be handled relatively easily in quickbooks. This is what we did. Using the combination of the Quickbooks pro timer and Quickbooks Pro. When you work simply enter the amount of billable time you complete for each customer into the quickbooks timer. Best if this is done daily, but at a minimum it should be done weekly. Every week each consultant should deliver a timer file that you import into Quickbooks pro. Then when you do your accounting in Quickbooks you'll have a record of the hours worked and the income billable. You can create triggers in quickbooks to remind you when to invoice each customer. Then send out the invoice. You can also track recievables using the software to help you manage cashflow. The challenge I suspect you'll have is getting the timesheets done every friday. We had a solution to this. No timesheet = no paycheck. Of course we were working with other consultants. I don't know how well that will work with your husband.

There is nothing in this system that requires quickbooks (or any other accounting software for that matter). Consultants have had to manage this kind of workflow long before computers. Here's a system that should work using a basic tickler file.

1. Put blank timesheets in every friday of your husband and your tickler file.
2. Put a note to invoice each customer on the day you can invoice for that customer.
3. Put a copy of the invoice for each customer in the day the invoice is due.

When a timesheet pops up you know you need to complete it. When a note pops up it's time to invoice. When an invoice copy comes up it's time to follow-up with the customer if you haven't been paid yet. Pretty simple... Of course with a paper tickler file you'll also need to set up a system to track recievables.

 

[ggrozier]

Two possibilities--
Use QuickBooks, as suggested above. But I really think it's essential to put the time in each day, so you can capture the details, any issues dealt with, etc. I've tried two solutions:

One is to have time slip books printed up for your business, with the business name and address, in triplicate. The slips can be numbered sequentially. Make notes on the timeslip, keep the pink copy in the book, the original for the client, and the yellow copy for the accountant for entry into your software. Your husband really needs to start slowing down and realizing that if he doesn't record the time, he won't get paid for it, and he's giving away that time unnecessarily. And sitting down after the fact is risking that the client will eventually notice an error and lose faith in your company, because it's so difficult to recall details several days later.

You would take the yellow copies of the time slips and use them to generate the invoice, and file the yellow slips with a copy of the invoice. You would give the white copies of the time slip to the client, along with the client's copy of the invoice.

Second, if you're using QuickBooks, you could get TimeTrakker. It's a Palm add-in for QuickBooks that lets you enter time on the fly--at the client's site or after leaving. Then, at the end of the day or every few days, you can synch the Palm to your QuickBooks file and you'll have what you need in order to generate an invoice. I'm trying it out and like it. You can download a free trial which is good for 30 days.

Also, you could accept the fact that your husband is good at some things and not at others, and you could just call him every night (if he's out of town) or take the time to ask him every night, what he did, where. Then you could keep the time records up to date and he wouldn't have to be dealing with something he doesn't like to do.

I don't think the timing of the invoices is a big problem--you could submit a separate invoice for each day you service the client, and they can pay to their schedule, and you can keep track of which invoices have and have not been paid. If they pay once a month, they may be paying several invoices, and if they pay every two weeks, they will be paying for fewer invoices at a time.
This would simplify your life greatly, and the clients should appreciate getting more accurate and timely invoices.

On the other hand, if you want to give each client just one invoice, then you could set up a billing checklist. On the 15th, you'd have "Invoice XYZ for work performed 1st thru 14th." You could set the checklist up in Excel and print it out monthly. Make a point of looking at the billing checklist every morning, first thing. As clients come and go, you could update the checklist.

 

[kewms]

Your husband needs a logbook. It could be paper, it could be electronic, but he needs a way to record billable time (and expenses, too, if applicable) WHEN IT HAPPENS.

No one's memory is good enough to be trusted for this kind of record. If he isn't making a record as billable events take place, then your records are no good. Which means either you're underbilling and leaving money on the table, or overbilling and risking all sorts of bad consequences. Since these are tax records, they need to be accurate enough to convince the IRS, too.

The good news is that this is a very common problem and all sorts of solutions exist, from a simple pocket calendar on up. I like TimeReporter, a Palm time and expense application. It is smart enough to track time by client, project, and activity, and lets you assign different billing rates for each. It will record time either as you go, with a built-in timer, or after the fact, and will import Palm calendar events. Syncs to a desktop application, which can create reports and invoices, dump to spreadsheets, etc.

Hope this helps,

Katherine