Estimates & Invoices

[jimbug72]

I was reading another thread the other day and it was mentioned by a couple of people that folks often feel nickel and dimed by line items, and it got me wondering about my practice. Install/builds are a fairly small potion of our business. The vast majority of our clients do their own installs. We use Estimate software 2.0 (pre-subscription version) for our estimating/invoicing so I use that to quote the sign face, then I'll figure everything else needed for the build/install and put it under one line item as "Labor/Materials" then a third line item as "Permitting Fees"

I've been wondering if I would be better served putting it all under one complete price in a single line item? I would like to hear how others do it. I'm about 50/50 on negative feedback on my prices on these types of jobs, but only around 10-15% on sign faces that are self isntalled. Based on prices I've read on here over the years and the "what would this cost" articles in SignCraft magazine, I'd say we tend to be on the lower end of the pricing spectrum across the board.

 

[Texas_Signmaker]

I lump everything together for the most part. When you line item, client feels they can on their own they can start removing things. They question specific charges. No, it's one price and that's it. I can't give you a break down because we price the entire job together as a whole.

There are some exceptions, like when a location is far I might detail out a trip charge so they know what's a stake if they have return visits.

For my large repeat clients, I line item everything as requested but they know if quantities change or things are dropped, that will change cost as a whole.

 

[Zendavor Signs]

I understand what Tex is saying, and for that reason I do sometimes lump things together. I tend to line item things out more often now. If someone wants to install their own sign, I say go for it. Or get their own permitting (if allowed). There is a lot of cost to training and having the proper tools and equipment for installation work. I have no problem explaining it to the few customers that ask. When I separate it out, it also makes sure that I don't forget something too. No matter what route you choose, you have to make sure to have the confidence to stand behind your pricing. Show any signs of buckling and your customers will run you over.

 

[StarSign]

If you lump everything together there is a good chance you are paying sales tax on items that really aren't taxable. Therefore putting less money in your pocket.

 

[unclebun]

I use Quickbooks and invoice signs with installation using the Group function, and make the items in the group invisible on the printed invoice I give to the customer. This allows charging tax on taxable items like the sign face, but no tax on the installation charge or straight reimbursements like permit fee. It also hides charging for obtaining the permit. But in the future I can always go back and look at it to see what the breakdown of charges was.

 

[2B]

We use Quickbooks and break the items into categories and then taxable / non-taxable within said categories

* DESIGN
* PRODUCT (including raw material for sign frames etc...)
* LABOR
* MISC ( mileage, equipment rental, special situation, etc...)

 

[Jean Shimp]

I usually separate the installation cost from the sign cost. I am happy to do only the sign and let the customer install. Regarding sales tax, I underwent a sales tax audit several years ago. The auditor told me that the State of Florida requires sales tax to be charged on ALL items that appear on the same invoice if any item on the invoice is taxable. It doesn't make any sense to me but just wanted to pass that comment along. I had to pay back taxes.

 

[White Haus]

I use Quickbooks and invoice signs with installation using the Group function, and make the items in the group invisible on the printed invoice I give to the customer. This allows charging tax on taxable items like the sign face, but no tax on the installation charge or straight reimbursements like permit fee. It also hides charging for obtaining the permit. But in the future I can always go back and look at it to see what the breakdown of charges was.

I'll have to look into this, thanks!

 

[Stacey K]

I use Quickbooks and invoice signs with installation using the Group function, and make the items in the group invisible on the printed invoice I give to the customer. This allows charging tax on taxable items like the sign face, but no tax on the installation charge or straight reimbursements like permit fee. It also hides charging for obtaining the permit. But in the future I can always go back and look at it to see what the breakdown of charges was.

This would be an awesome feature in Wave - but it doesn't have that. This would eliminate the issue of "how much did I charge the guy for just the sign" if they come back and want a second one.

 

[unclebun]

I usually separate the installation cost from the sign cost. I am happy to do only the sign and let the customer install. Regarding sales tax, I underwent a sales tax audit several years ago. The auditor told me that the State of Florida requires sales tax to be charged on ALL items that appear on the same invoice if any item on the invoice is taxable. It doesn't make any sense to me but just wanted to pass that comment along. I had to pay back taxes.

That's fairly amazing that they would require this. It's very common to have labor and materials on the same invoice. And just because there are taxable materials on the invoice doesn't make the labor taxable. But apparently this is true. So do you invoice labor separately?

 

[Jean Shimp]

That's fairly amazing that they would require this. It's very common to have labor and materials on the same invoice. And just because there are taxable materials on the invoice doesn't make the labor taxable. But apparently this is true. So do you invoice labor separately?

I don't send a separate invoice for labor unless it is a significant amount apart from the sign cost. On a typical installation there is usually hardware, adhesives or miscellaneous products that are taxable included in the installation, which makes it all taxable. If I am designing something I will send a separate invoice without tax. But most of the time I just include the tax on the sign invoice line items. So far, no one has complained.

 

[unclebun]

Your hardware and adhesives have already been taxed when you purchased them. They should be itemized as reimbursement for materials purchased for customer, without sales tax charged by you. The state doesn't get two cuts. If you want to mark them up, charge for the time it took to go buy them under labor.

Invoicing installation labor separately would seem to be worthwhile. Installations can run into many thousands of dollars. If I were a customer I wouldn't be happy about paying an extra several hundred dollars if I didn't have to.

Now, what you cannot do is separate materials and labor for fabricating the sign. You are manufacturing then, and the new product has higher value because of the labor you put into the materials. I believe this is the loophole Florida law is clumsily trying to close.

 

[songprinting]

I usually separate the installation cost from the sign cost. I am happy to do only the sign and let the customer install. Regarding sales tax, I underwent a sales tax audit several years ago. The auditor told me that the State of Florida requires sales tax to be charged on ALL items that appear on the same invoice if any item on the invoice is taxable. It doesn't make any sense to me but just wanted to pass that comment along. I had to pay back taxes.

That's so confusing. We are in FL and also underwent a sales tax audit many years ago which makes me very wary of everything. Even the dept of revenue doesn't explain things consistently when you search for the rules online. It's worrying as I don't charge sales tax on installation.

 

[Gino]

We itemize everything. We have a sales tax exemption with just about everyone and almost never pay sales tax ahead of time.

In QB, there's a little tab at the end where you can make it taxable or non-taxable on the fly per item.

Lumping it all together means you would need to split it out if the customer wants to change something.

We have a line item which says about 'change orders' changing the price after the initial quote has been accepted and started. We also have a line item...... If there are any questions on any of the items, terms or descriptions above, please call and then our number. We also have written on our quotes..... good for 30 days. Last, but not least, it is explained that any changes to this quote will result in a revised quote.

Ya generally know what kinda customer is gonna pull sh!t on ya, so those line items are there for them.

 

[Notarealsignguy]

Your hardware and adhesives have already been taxed when you purchased them. They should be itemized as reimbursement for materials purchased for customer, without sales tax charged by you. The state doesn't get two cuts. If you want to mark them up, charge for the time it took to go buy them under labor.

Invoicing installation labor separately would seem to be worthwhile. Installations can run into many thousands of dollars. If I were a customer I wouldn't be happy about paying an extra several hundred dollars if I didn't have to.

Now, what you cannot do is separate materials and labor for fabricating the sign. You are manufacturing then, and the new product has higher value because of the labor you put into the materials. I believe this is the loophole Florida law is clumsily trying to close.

Each state is different on sales tax laws. Labor as part of a finished product is taxed no matter how you decide to book it and splitting labor on a manufactured item to lower sales tax would be tax evasion even in Florida. I'd make the assumption that an install could go either way and one could argue that a quote for an installed sign would be taxed on full value as it would be part of the sign. Down here delivery is taxed if it is on the same invoice but that isn't true for every state.

 

[Notarealsignguy]

That's so confusing. We are in FL and also underwent a sales tax audit many years ago which makes me very wary of everything. Even the dept of revenue doesn't explain things consistently when you search for the rules online. It's worrying as I don't charge sales tax on installation.

I was under the assumption that labor is exempt in Florida if labor was the only component of the job i.e. you installed a sign provided by another person. Once there are taxable tangible goods involved of any kind, the entire thing is now subject to sales tax. I could be wrong but that is what I was taught

 

[unclebun]

Of course jobs where installation costs a lot are usually for signs installed on or at buildings--which is real estate. And therefore not taxable on sales tax. It becomes part of the real property. But then the materials have to be purchased by the vendor paying sales tax.

 

[jimbug72]

As I understand it, if it's not wholesale to a retailer for resale or some other tax exempt organization, South Carolina DoR expects to wet their beak on the sale.

Labor, shipping, materials doesn't matter, all of it gets taxed so separating line items won't affect the end price on these jobs for us.

 

[Sidney]

Yeah, I would agree with lumping parts together. I learned eraly that customers may start removing line by line items and then the reality is "I ended up taking the hit". So, I don't put it all under one roof, but Like i said " I lump certain pieces together" to give the estimates a "stream-line" look and feel.

 

[Stacey K]

Be careful with hourly rates vs. "per job". My son learned this over the weekend. He has a landscape business and gave a estimate for moving stone and putting fabric under it, then moving the stone back. Once done, it was close to the hours he calculated and priced the fabric per square foot. Job ended up right where he expected. Well, the customer timed the worker. She timed how many minutes he was on his phone. And she counted how many rolls he used. They came back with all the data and demanded a line-by-line invoice minus the time the worker was on his phone. And wanted a "refund" for the "extra roll" on the ground that wasn't used (which was just an extra). This is why pricing "per job" is better than hourly or by materials and I try to do it as often as I can.