With the exception of certain sectors, a quotation is not required by law. However, it is preferable for both parties to agree beforehand on the conditions and, above all, the price of the sale or service. Invoices, on the other hand, are subject to precise rules and are obligatory in most cases. Whether your business is small, medium-sized or large, you need to ensure that you manage both quotations and invoices correctly. In this article, you'll find some tips on how to do just that.
Quotations and invoices: definition
A quotation is a document mainly used by service providers. It summarizes the products and services to be supplied by the company, indicating the unit price and the total amount due in the event of acceptance. The special feature of a quotation is that it includes a period of validity in addition to the legal information. As soon as the customer signs at the bottom of the quotation with the words "bon pour accord" ("good for agreement"), he undertakes to respect the contract and pay the sum indicated. For its part, the supplier is obliged to perform the service as described in the quotation.
The invoice is also a document detailing services or goods that have actually been sold. It has an important legal and accounting value, and must be drawn up by companies in duplicate, kept for ten years, and include compulsory legal information (article L441-9 of the French Commercial Code).
Where a quotation has been issued, the subsequent invoice must reflect the exact terms of the quotation, with a few exceptions.
We sometimes come across so-called "proforma" invoices, which have no legal or accounting value. They are issued for information purposes.
How do you draw up and manage estimates and invoices?
A quotation, like an invoice, can be produced in any medium. You can choose a word-processing program like Word, or even better, a spreadsheet like Excel, which offers automatic calculation formulas.
The manager of a very small business is often obliged to take care of his own estimates and invoices. This essential task often seems tedious and wastes precious time. In such cases, the best solution is to equip yourself with a simple, tailored invoicing software package.
Using billing software
There are a number of commercially available software packages for craftsmen and small businesses. These programs, some of which are free, can be used toautomate estimates and invoices.
All you have to do is set up the tool by entering, once and for all, the products or services with their prices, customer and company details, and general sales conditions.
The sales document is created in just a few clicks. Formatting is automatic, and VAT and sales tax are systematically calculated. The advantage is that, if validated, the estimate is transformed into an invoice. All information is reproduced identically.
From an accounting point of view, invoices are numbered and filed chronologically. It's even possible to switch from sales management software to accounting software. So there's no room for input errors.
It goes without saying that using invoicing software is beneficial to the smooth running of your business. There's something to suit every budget, either as a purchase or an online subscription.
Computerized estimates and invoices
If the volume of quotations and invoices remains reasonable, the company manager can opt for word processing or spreadsheets. This will automate the document management process to some extent.
You'll need to create a personalized quotation and invoice template, and use the same one every time. The information required by law, as defined in article L441-9, must be included. Depending on the activity, other information may need to be added.
All that's left to do is enter the customer's contact details, and the description, quantity and price of the goods sold or service rendered.
Unfortunately, this type of processing does not rule out human error (duplicate entries, insertion of inaccurate information) or fraud (subsequent modifications). This is why word-processing and spreadsheet systems are best suited to companies that produce few quotations and invoices.
Quotations and invoices
If you don't want to, you don't have to buy software or use computers to manage your invoicing. They can use a paper invoice book. An invoice book is a duplicate or triplicate notebook containing pre-printed invoices. These invoices are numbered and already contain most of the mandatory information. All you need to do is stamp the information identifying the company, then enter the customer's name and address, the description of the goods sold and the price.
In this day and age, this way of doing things has almost disappeared, but it's still very simple and may be suitable for a micro-entrepreneur with few invoices to issue.
How do you manage your quotes and invoices?
Each company must choose one of these three methods for drawing up quotes and invoices, according to its needs.
But billing management doesn't stop there. It starts with sending the quotation and ends with archiving the invoice. All stages must be optimized.
To achieve this, digital solutions are increasingly being adopted. Soon, electronic invoicing will become the norm. The dematerialization of documents will do away with the filing system still in force today. Scanning and e-mailing documents already saves time and costs. The ideal is to dematerialize the entire quotation and invoice life cycle.
In the meantime, a rigorous organization is essential. All documents should be grouped together in the same space, and classified by type: quotations pending, quotations accepted, invoices awaiting payment, invoices paid...
A payment schedule should be created and kept up to date, so that you can easily see which quotations need to be dunned and which invoices remain unpaid. In the latter case, it is advisable to contact a collection company. They will take over the task of tracking down bad payers, freeing the manager from this chore.