Invoicing ... Are you doing it right?

Have you ever queried a bill? Can you remember the bad feelings it created?


Many business people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Though the invoice comes down to a figure that is payable, those numbers are symbolic of value; those figures symbolize what your client expected to receive and if they are higher than what they expected to pay they will not be happy.


A friend hired a landscape gardener to tidy her garden. When she asked for a quote she was led to believe the job was going to cost around $400. However, when she received the invoice it was closer to $700; here is the detailed description the company provided of the work for which they charged her:


Landscaping works completed including: Full weed & trim gardens, removal ivy & trim back invasive creeper on back fence, cut back hydrangeas, deadwood & feed fruit trees, tidy miniature agapanthus, transplant agaves & miniature agapanthus is main garden, removed lavender, prepared soil for & installed client's own potted color, potted aloe vera, tidied spider plant & jade tree in pots, tidied pathway at letterbox, full fertilise all gardens, derris dusted cabbage trees, supply compost, fertilisers, derris dust, water retention crystals. Full load to tip. Day charge. Total hours 9.5.


My friend had no issues with what the company said they did, her issue was with the unanticipated expense. When she queried why the invoice was $300 higher than her expectations, here is the reply she received:


Dear L,


We had a phone conversation regarding the expected $ for the day. As it was a charge up (not based on the original quote), I stated an hourly rate of $38.50, plus materials and rubbish removal and that we have a day charge of $150 for an 8 hour day, which is reduced if there is less time on site. Basically is equates to $150.00 divided by 8 hours = $18.75 per hour. Times this by the physical time on the job (not by the number of crew hours) i.e: 6.75 hours (9-3.45) including rubbish removal time. So $18.75 x 6.75 hours = $126.55 day/overhead charge.


The materials and waste removal were quantities not known till the end of the job.


I hope this is clearer for you.


Kindest regards J


What???? How many times did you need to reread that to understand it?


Here are 7 ways this company failed to communicate effectively with their client:


1) They failed to make it clear that they planned to 'charge up' the work as they incurred costs.


2) At no time did they provide an estimate of how much these costs might be.


3) In their reply they focused almost exclusively on their hourly rate (their issue) when their labor charges were not the main issue.


4) Nor did they provide a relevant response -- in this instance the total hours billed for this job were 9.5, not 6.75 as explained in their email.


5) The reply was needlessly complicated; befuddlement sends the signal they feel they have something to hide.


6) Nor did they acknowledge the client's feelings. Yes, they provided a left-brain informative response which might be the official line their accountant has suggested they follow but at no time have they addressed the customer as a disappointed human being.


7) Nor did they show any appreciation for the business. Even though she queried the invoice, my friend let it be known she would pay the full amount. Will my friend use this company again? No. Will she recommend them to someone else? No.


Many people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Invoicing is a process that starts from the moment you first meet the client. Your numbers tell a story and you need a congruent and SIMPLE explanation to accompany them. How much detail you provide on the invoice will depend on how well you have communicated with your client on previous occasions. Your invoices are about communication; be sure you communicate clearly so you gain a happy customer -- one that will recommend you to their friends and not write about you behind your back!

If you wish to copy this article please include this acknowledgement: ©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

7 reasons to say 'thanks' to your boss today

Almost everyone these days wants to be the next Richard Branson or Donald Trump but not everyone has the entrepreneurial spirit it takes. Let's face it, it's kind of un-cool to say that your ambition is to win 'Employee of the month'. It's much more socially acceptable to say you want to run your own business or become an entrepreneur -- but are you really made of the right stuff?

Are you willing to take risks? Are you confident in yourself? Do you have the skills you need to compete successfully? Do you inspire confidence and are others willing to invest in you? Do they really believe you are as good as you say you are? How well do you manage money and cash flow? Will you be able to get your price right so you can make a profit and stay in business? If you answer 'no' to any of these questions, and you don't know how to price yourself right, don't go into business on your own. Go get a job instead!

If this is you then here are 7 reasons to thank your employer today:

1. Your employer takes ultimate responsibility for creating new business.

2. Your employer manages the cash flow and takes the risk of clients that won't pay.

3. Your employer gives you the security of a regular income you can plan on.

4. Your employer takes the hit if there is an economic collapse, the dollar rises or falls or some other sensitive market situation arises.

5. Your employer has confidence in you; that should make you feel good.

6. Your employer deals with the legislation, pays the taxes and does the paperwork.

7. You get to go on holiday and leave the business behind. You can always leave. All care and no responsibility. How good is that?

Employers are often seen as the bad guys when in fact they are everyday heroes and optimists. If you are in a job right now, accept that until the time is right, a job is a very great privilege and go say 'Thank you' to your boss today!

Dealing with the ‘I have no money’ client

What is it with customers that come to ask for advice and then mention that they have ‘no money’?

Do you ‘buy’ that line? And should you?

I have had clients - an airline, bank, and multinational pharmaceutical company – who have all at one time or another told me: ‘I can’t afford it.’ ‘I don’t have any money.’

In one situation, the marketing manager of a bank called me in specifically to give a detailed brief about their marketing problem only to finish with ‘but the problem is we don’t have any budget’ - and this was after she had shown me several thousand dollars worth of branded clothing, bags and sports equipment which they planned to give away to their target audience! The cheek of it especially as this was the head office of the bank with whom we had our house mortgage at the time.

My response (not out loud) was: ‘So why, if you’ve got no money, are you telling me your problems?’ Needless to say I wasn’t at all sympathetic, and they did eventually find a budget.

Other times I’ve been given cause to think: ‘What? Your shares are trading for US $75 on the New York Stock Exchange, the company made $3 billion profit last year, and you’re telling me you’ve got no money?’

My advice: Keep your objectivity and don’t buy the client’s sob story. If it’s really important to them they’ll find the budget from somewhere. They wouldn't be wasting their time talking to you if they didn't have a problem they thought you could help them solve.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

What does ‘right’ [as in ‘Price Yourself Right’] mean?

We live in a greed culture and I have observed that most people instantly see ‘right’ as charging more when ‘right’ might mean you need to lower your prices and sell increased volume, improve your marketing effort, increase your sales appeal.

‘Right’ might also mean improve your quality, find your competitive advantage, enhance your best features, improve your sales spiel, add value to your existing product or service, sell your benefits. Alternatively, ‘right’ might mean increasing your price by becoming more exclusive, more authentic, adding creativity … but pricing yourself right isn’t always just about asking for more.

The ‘right’ price is a thought construction based on both hard figures and emotion (what feels right). The ‘right’ price is determined by your customers, your competitors and you. What is the ‘right’ price falls somewhere in the middle of the Venn diagram where these 7 factors converge:

1) What the customer is willing and able to pay

2) Availability of the product or service in the marketplace – is there an abundance or scarcity?

3) Economic and political environment – are there restraints in your industry or other barriers that affect price elasticity?

4) The costs of production and being in business

5) Marketplace and competitor prices

6) Your own bottomline beliefs on how much profit you need to make it worth your while staying in business

7) Your vision – here’s when you think in term of possibilities.

This is summary - if you want more details please refer to the book .

©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

What's wrong with 'We won't be undersold'?

For some some businesses, aggressive pricing is the number one marketing strategy; it’s what attracts customers in, and the reason they buy.

Customers are drawn to companies like Best Buy who have just been accused of having a public website with more attractive prices than those the customers find on the intranet at the time of purchase inside the store. You can read the whole story by Jason at courant.com.

You can see from the 196 comments posted that people feel strongly about being tricked. We don’t expect the numbers to lie and it is especially more heinous when, as in this situation, low prices are a core premise.

Seth Godin’s blog entry ‘We won’t be undersold’ first alerted me to the Best Buy story. Here he says: ‘If you have a won't be undersold motto, the very best thing that you can do is find customers who find a better price somewhere else... and then give them the discount. Why? Because it proves you're not lying, and it spreads the word. Those customers are heroes.’

... To which I would add: Beware the ‘We won’t be undersold’ tactic for these reasons:

1) Do you want a whole lot of bargain hunters as customers? Are they your target audience? If they are, I hope there’s a big population of them as the margins are going to be slim.

2) This tactic rewards customers for placing the highest value on price as if price is all that matters. If you have no plans to offer more in terms of quality, service, ambience, creativity, and you wish to disregard the environmental impact and community aspects of shopping then go with the ‘We won’t be undersold’ tactic. Otherwise don’t.

3) You give your power away to your competitors and suppliers; you run the risk of being manipulated.

4) Don’t you want to retain ultimate control over your margins?

5) Can you be bothered dealing with the ‘paperwork’ and transaction costs of refunding money on what was a done deal?

© 2007 Jane Francis Please acknowledge the source if you copy this material.

Are you thinking about going freelance and want to know what to charge?

Let's pretend you are a forensic accountant with a large High Street accounting firm. You have been working in a large office with sea views, you’ve had a car park, your own personal assistant and four junior accountants working in your team. You always were incredibly good at what you do and your clients know it. No one can get to the nitty-gritty of a fraudulent case quite like you do. But you hated the time wasting meetings and the office politics and now you’ve quit and are working from your home office, answering the phone yourself.

You are still the hot shot you always were but will your clients still see it that way? Now you’re working from home should your charge out rate still be $800 an hour as it once was or has something changed?

You may think that nothing has changed in terms of the quality of advice you dispense and the service you provide but in reality, other subtle things have changed. For instance, you are now out of the loop in terms of corporate knowledge, to keep up to date you may find you need to attend more conferences and network more.

Now you are at home your client is no longer buying the intellectual property of the corporate brand they once were. What price do you think they may have put on that? They are also no longer buying the surety of the brand--the fact that in the past people like you may have come and gone yet the company has performed regardless. Will they have the certainty they are used to in terms of commitment to providing a back up if you are unavailable--and what price do you think they may place on that?

Your client may have liked the prestige and convenience of the High Street location and may have been willing to pay for that, and now he knows your business doesn’t carry the same overheads how much less does he expect to pay? If you are going to do all the administration jobs yourself then you may need to decrease your hourly rate as you are now diluting your $800 an hour thinking with $20 an hour secretarial services.

To keep up with your workload you may decide to employ a secretary and two book-keepers (yours are more efficient because you don’t waste their time in unnecessary meetings). You may need to allow yourself an annual training and networking budget. You may also have to subscribe to professional organizations and journal subscriptions that when charged as an expense works out more costly than when you were in the corporate world because now you are the only person using these resources.

To decide whether you think you are still worth $800 an hour you need to build a case in your defense so you can give an explanation to your client. Perhaps you’ll decide to lower your rates because your overheads are lower or maybe you’ll charge more because now you are going to get better qualified, specialize even further and take on fewer clients so you will become even more exclusive and valuable in what you do.


© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.

Could the 80:20 Principle apply to your business?

If you are a freelancer or contractor selling your time you may find inspiration in the book by Richard Koch entitled ‘The 80:20 Principle: The secret of achieving more with less’.

I love this book for its mind-expanding qualities. Written in an easy to read style, Richard Koch is both edifying and entertaining. I especially like what he has to say about time. In particular:

• Time is not the enemy. If we make good use of only 20% of our time, there is no shortage of it. Now doesn’t that take the pressure off? So often we panic in reaction to the ticking clock when we would be better off withdrawing and regrouping and approaching the situation from a stronger position.
• We should collaborate with time: ‘Insight and value are likely to come from placing ourselves in a comfortable, relaxed and collaborative position towards time’. [p163]
• We should act less because action drives out thought. It is because we have so much time we squander it.
• Be eccentric and unconventional with time – you can not conform to everyone’s wishes.
• Under no circumstances give everyone a fair share of your time. Why should you? Pay the most attention to the activities and clients who comprise the 80% of your profits. AND pay the most attention to the activities that bring you the most pleasure; you only have one life you may as well enjoy it.

Whenever I find myself busy beyond belief it is good to be reminded that most of what I am doing is of low importance in the big scheme of things. However - when faced with one of those moments (or decisions) that are much more valuable than all the rest - it is helpful to be reminded, and encouraged, to ‘do something radical and stop tinkering around the edges’.
I bought this book so I could refer to it whenever I feel I have lost direction or focus and need some sage advice. Though some of his examples may not be relevant in all circumstances, I find the book works as an efficient ‘thought jump starter’ and is highly inspirational. I recommend it.

What does your price say about you?

To understand what your customer thinks of you, you need to think like they do.

If you’ve read a book, or have completed a course, in sales or marketing you will have learnt that ‘People buy on emotion’ so how about this: If people buy on emotion AND people pay with money THEN what emotion does their money buy them?

When your customer buys from you what emotions are you satisfying?

For example, my young children regularly spend their loose change at ‘The $2 Shop’. Of course the stuff is junk, and it breaks in no time at all, but when we shop there I feel safe because I know that nothing will cost more than two bucks. As for my kids they have the [short lived] fun of spending their disposable income. I feel SAFE and they have FUN!

‘The $2 Shop’ and others in that category market themselves entirely on price. Their price IS their marketing and, as a strategy, it works for them.

If you are contractor or freelancer think about your price and ask yourself: What emotion does it satisfy in your customers?

Greed? Disdain? Pity? Love? Lust? Pride? Fun? Security? Concern? Worry? Fear?

Does your customer purchase your product or service because they ‘must have’ what you offer? If so, why is that? Must they have what you offer because they are trying to outdo others (greed) or will owning what you provide make them proud of themselves, or will it satisfy their lust in some way? Does the price you charge have a bearing on your customer’s impression of you? Will your price excite, entice, satisfy or disappoint?

Will your price make your customer feel safe or afraid? For example, the dentist who charges half the ‘going rate’ will always make me feel afraid.

Take the time to understand your customer’s emotions and you will find it easier to price yourself right.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Happy New Year

"Life is hard when you put all your energy into trying to get rid of your fears rather than into materializing your dreams." [Anon]

I urge you to remember why you price yourself as you do. Do you have good reason for asking the price you do? Are you believable - i.e. does your customer buy it?

"Business is hard when you put all your energy into trying to get rid of your fears rather than into realising your goals." Price is often the objection that sales people have the most difficulty dealing with. To the customer price is not personal but to you it may be. If you have a problem setting and discussing price make 2007 the year you gain the clarity and confidence to Price Yourself Right.

If you need help please contact me direct.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Wishing you a Merry Christmas along with a story about the price of chocolate

For many of us Christmas is a time of much chocolate so I couldn't resist directing you to this amazing article about two Canadian accountants who set up a business selling some of the world's most expensive chocolate. I first read about it at Seth Godin's blog in a post with the interesting title 'Sneetchcraft'.

If you go to the Dallasfood.org source article about the worth of Noka chocolate, you will find a cautionary tale about being authentic and honest about who you are and what you stand for. You will also read a ten part article about how your customer and critics are no fools, and the lengths they may go to to keep you honest. You will probably also learn a lot about chocolate .... well worth reading.

Merry Christmas and Happy New Year to you. See you in 2007!

Last Price Yourself Right Tip for 2006: Don't be bullied!

Do you allow yourself to be belittled or bullied? Professional bullies will expect favors and demand that work is done unreasonably quicker, better, cheaper: “I don’t care; just do it.”

Bullies will take precedence over all your time and may even demand exclusivity—but beware—they don’t want you to succeed on your own; they need you.

Bullies are usually good at “reading” people and “pushing their buttons.” They use techniques like leaving things to the last minute to block escape routes, and dangle carrots that won’t be delivered, and often use “weasel words” (words like “virtually,” “almost,” and “possibly”) as out clauses. They rely on a network of higher authorities—lawyers, accountants, politicians, and the like—but will avoid putting anything in writing.

Bullies look for clues when recruiting their “team.” For example: At the end of a job well done, have you ever belittled your efforts by saying, “Oh, it was nothing, really,” or “Anyone could have done it”? Don’t do that—as insignificant as those statements may seem—a bully will notice!
Here’s another example: You’ve just told your client (or boss) that the job they want done will take you two days. She responds by looking surprised and saying, “But it only took Sue one day.” You take two days, but only charge for one—bullies like it when you do that.

The most effective way to address bullying in schools is to empower the victim. While it’s not the victim’s fault (that’s got very little to do with it), in the long run the best strategy is to teach the victim how to disempower the bully. In just the same way, you need to learn techniques to enable you to restore the balance of power—or develop your bully “antennae” and leave these customers for someone else to deal with.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Price Yourself Right’ Tip 9: Never fear the rejection.

Does not charging what you are worth make you feel safe by reducing the rejection you think you’d get if you charged more?

Rejection is a fact of life. Sometimes you get to be the rejecter; other times you are the rejectee; but in either case, life goes on.

What did you do last time you bought a car? Did you buy the first one you looked at, or did you look around a bit, read the papers, surf the internet and get your “eye” in on price? Would you get more than one quote if you were printing a large run of brochures to drop in letter boxes in your area?

Some companies have a policy of asking for three quotes; that means two quotes are going to be unsuccessful—boo hoo—but it’s not personal.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Price Yourself Right Tip 8: Read ‘Money Magic’

I just read a book I loved: Money Magic by Deborah L. Price.

As I said in the first sentence of Price Yourself Right, ‘I can always tell when someone isn’t confident about asking for money’, I then spent the first two chapters talking about understanding your conscious and subconscious attitudes to money …. But Deborah Price’s book goes into much greater depth. It doesn’t cover how to set your fees or give you practical tips on what to say and do in business to get your price but it’s a wonderful book to help you get your mind (and spirit) around money.

I especially enjoyed her comments about how we should value our time:

‘Unlike money, which we can always find ways to earn, our life bank only has so many hours in it – and we don’t know just how many hours we have left …Perhaps if we had a currency with denominations of time printed on it that we actually had to physically spend as we use time, we might value our life hours as we value money.’ Deborah .L. Price

'Money Magic' is available at amazon - and no, I've never met or spoken to the author and am not getting paid to write this. (Tho' I do plan to go to amazon and leave a review, one day soon).

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Tip 7: Remember that, first and foremost, your buyer is after a solution.

Customers do not want to buy something that doesn’t work, or something they do not like. So, first and foremost, the buyer wants a solution then she’ll decide if it’s value for money.

If you are the salesperson and the deal is uppermost in your mind remember to put that thought to the back of your mind and solve your customer’s problem first. Price is more important in the mind of the seller than the buyer.

Tip 6: Never belittle what you do.

I know of several people (women, actually!!) who unintentionally diminish their value in a misguided attempt (and interpretation) of modesty.

If you have just done someone a favor, and they are expressing their gratitude, here are three things you can say to instantly diminish the value of what you did:

1) “It was nothing really”
2) “Any fool can do it”
3) “It only took a few minutes” [when it didn’t]

As soon as the magician has shown you how he did the trick, the magic disappears.
If someone is grateful for what you did, accept their praise (and money) without discrediting what you did. If they thought that what you did was magic let it remain that way. Just say: Thank you.

Tip 5: There will always be some customers you can’t afford to do business with …

… for a number of reasons. Here are 12:

1) The client or the job is too big for you – you don’t have the resources;
2) you’ll lose other customers that are important to you;
3) you’ll become too specialized;
4) they drive too hard a bargain;
5) they’ll be too time consuming;
6) their dodgy reputation will taint your good name;
7) you’ll generate bad press from the deal;
8) they will bully you;
9) you suspect they’re working for your opposition (or they will become your competition);
10) what they want is unreasonable or unachievable;
11) the risk of failure is too high;
12) doing business with them will ultimately cause you some commercial harm.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

‘Price Yourself Right’ Tip 4: Know when to walk away.

There will always be some customers you simply can’t afford to do business with so you gotta know when to walk away!

Kenny Rogers immortalized those words in the song The Gambler*

“You got to know when to hold ‘em, know when to fold ‘em, Know when to walk away, and know when to run. You never count your money, when you’re sittin’ at the table. There’ll be time enough for countin’ when the dealin’s done.”

*words by Don Schlitz

The same as gambling, when you pitch your price, you gotta know your odds, know your limits and know when to call it quits.

©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Tip 3: Price makes a statement about credibility.

So you want to buy a genuine Rolex™ watch for ten dollars? I don’t think so!

As part of our growing up process we learn to think cheap = nasty and expensive = quality. It may not be true but that's what we learn to associate with those words. And if that's what's in your customer's mind you'd better not forget: Perception is Reality!

Does your price reflect your quality and credibility?

There’s a lovely saying attributed to the Gucci family:
Quality is remembered long after the price is forgotten.

© 2006, Jane Francis is the author of "Price Yourself Right”. You can buy the book here.

Tip 2: Don't confuse volume with margin

It is ingrained in our psyche to expect to get a discount on volume. Even as children it doesn't take us long to figure out that sweets bought individually are more expensive [per item] than the whole bag!

Somehow it is easier to see the discounts and savings on products as apposed to time ... which is why service providers often end up getting busier and busier, doing more and more for less per unit of time sold.

Those that want to work (and that's a large percentage of self-starters) also want to feel busy -that way we don't need to worry we're going to run out of work. Besides if we're busy we won't have time to worry or we'll have something to do to take our minds off it!

But the important question to ask of yourself, and others, is not ‘Are you busy?’ but ‘Are you profitable?’ You can be very busy and still go bust (or have a heart attack) if you are not keeping a disciplined eye on your gross margin.

So today's tip is to watch it: Don't confuse volume with margin.

© 2006 Jane Francis is the author of "Price Yourself Right”. You can buy the book here.

Tips to help you 'Price Yourself Right' start today

Over the next six months I will blog a tip every couple of days. Here's today's tip:

Always remember that if your competition can sell at those low prices [and go out of business]—you can to.

Do you sometimes wonder how your competition can afford to sell at such low prices? The truth is often they can't ... often the low prices are a sign that they need the cash flow [to pay their suppliers and staff without which they wouldn't even have a business]. The low prices are a last ditch attempt at survival—and you don't want to join them!