Sales process documents

[JL-KBB]

I run a small Kitchen and interiors company.

I have in all honesty fumbled my way through the documents process the 3 years we have been open. No real template to speak of.
I have based my current set up on companies I have worked for before setting up myself.

The current process documents are;

Estimate- List of product and services including furniture, worksurfaces and install, possibly appliances and building works.
Agreed Quotation- An Agreed Quotation that client pays a £2000 deposit to confirm their order, based on an Agreed Design, Specification and Quotation.
Revised Quotations- We usually have at least one revision after an 'Agreed Quotation', sometimes 2-3.
Finalised Quotation - All revisions completed and a Finalised Quotation, Design and Specification has been produced, which the client will sign off on, on this document. They must pay their next instalment at this stage (60% of the over all project cost).
Our payment terms set out in the Agreed Quotation state Payment 1- £2000 deposit to confirm order, Payment 2- 60% of order value to sign off on Finalised Quote, Payment 3 Balance due 7 days prior to delivery.
Invoice- We issue this after the project has been completed. By this time all money would have been paid.

Is this ok? I've had push back form other people in business and have since tried researching, and getting varying information back on it. What I've been told is that you are not allowed to ask for money from a quotation, that you need to issue the invoice when taking the £2000 deposit. Is this true?
Our issue is, from we take a deposit we may be 3-12 months away from being able to recoup the revenue we've filed for.

Thanks in advance and apologies for the amount of information here.

 

[Scalloway]

I would recommend issuing an invoice for the deposit. The money collected will sit on your Balance Sheet as a creditor until the work is being done.

 

[JL-KBB]

I would recommend issuing an invoice for the deposit. The money collected will sit on your Balance Sheet as a creditor until the work is being done.

Hi Thanks for the reply.
Do you mean an individual invoice for £2000, and then invoice the other payments separately?
Or invoice the whole lot and then get them to just make a payment off the invoice?

 

[Scalloway]

I would raise invoices as payments are due. This is what I have been used to for construction projects. I presume you are not VAT registered as that could have an effect when you raise invoices.

 

[JL-KBB]

I am indeed VAT registered yes. Hence why until now after completion has been best for us, as we are sitting out revenue paid to HMRC otherwise.

When you raise the separate invoices for payments though, do you separate out the works for payment. Or is it just labelled payment 1 payment 2 etc.. and in fact now works or materials on the list.

 

[Bobbo]

I am indeed VAT registered yes. Hence why until now after completion has been best for us, as we are sitting out revenue paid to HMRC otherwise.

When you raise the separate invoices for payments though, do you separate out the works for payment. Or is it just labelled payment 1 payment 2 etc.. and in fact now works or materials on the list.

Are you saying you only account for VAT on the invoice at the end of the works, and not on the stage payments are they are received?

 

[JL-KBB]

Are you saying you only account for VAT on the invoice at the end of the works, and not on the stage payments are they are received?

Hey Bobbo,

Thanks for your reply.

No, we account for VAT throughout our process. But currently it's only shown as a stage payment in the 'description' and wondering whether we need to breakdown each invoice to show the exact items allotted for that staged payment?

 

[Scalloway]

In the construction industry we just received a QS's certificate and an invoice. However engineering project I am involved with the contractor has given separate lines for labour, materials etc.

 

[JL-KBB]

In the construction industry we just received a QS's certificate and an invoice. However engineering project I am involved with the contractor has given separate lines for labour, materials etc.

Yeah that's probably for the CIS scheme, all contractors and sub contractors within the construction industry must separate labour and materials to see how much tax they have to pay. After doing a bit more research we are doing it correctly for our industry, but I may start breaking down our designer fee's and project management, materials and installation into the separate invoices, just to give a bit more clarity on the payments.
Thanks for your help, it was good to get some feedback from another business owner.