Project managers are responsible for creating invoices for their clients each month.
Most of our clients have Core Coverage (Formerly known as Core Retainer), plus hourly work. This is our most common invoice structure. Some of our clients also have a Friends-and-Family discount or are Pro-Bono clients. This document provides basic guidelines for how to invoice those types of clients.
🚨 Important: For non-retainer invoices created on or after September 1, 2023, PMs should not actually send the invoice to the client but should instead simply create them as drafts and click “Copy to Xero”.
- Check that all uninvoiced billable hours are in the right categories
- Make sure it’s fair for us to charge for all the hours
- If we have to comp/write off any hours, make sure they are actually moved to non-billable categories in Harvest, not just ignored on the invoice.
- Construct the invoice via the Harvest projects
- Add notes clarifying what was included in each line item
- If the invoice draws from an existing retainer, mark it as paid.
- If the invoice does not draw from a existing retainer, copy the invoice to Xero but do not send it. Do not “Mark as Sent”. Tag Ty in the invoicing ritual letting him know that the invoice is ready to send via Xero.
Typical Case: Core Coverage
- Core Coverage is shown as the last line item with its associated fixed cost
- Hourly services are shown with the discounted hourly per the SOW, $225.
- There is no overall discount on the invoice.
- There is an overall 25% discount on the invoice, including Core Coverage.
- Make sure this matches the pricing in the SOW for the client. Some of our SOWs are non-standard.
Harvest has the ability to create “Retainer” invoices. These are not counted as typical revenue for the company in our books. We should use these to handle cases where:
- The client wants to pre-pay in advance for services over multiple months
- The project is a long-running flat fee engagement where we would like to allocate the revenue when we do the work, not when we get paid.
- We are asking for payment in advance, or the client wants to pay in advance
- We have a pro-bono client (more below)
If you create a retainer invoice for such a client, when you create invoices, you will be able to mark them as paid by paid fees on the retainer invoice. For example, if you issued a retainer invoice to a client, you can create invoices for them as normal. Once they pay the retainer invoice, you can apply their payments to the regular invoices you created.
Pro-bono clients receive normal invoices using the Friends-and-Family rate. However, they also receive a yearly gratis retainer. They can use these funds to pay for their anticipated invoices.
The retainer should be the same as the normal retainer invoice, but “marked as paid”.
After the retainer is created and processed, please invoice the client the same as any other client, but apply the retainer fees to the invoices.
If the client wants to do more work beyond our pro-bono retainer, they are free to ask us. Continue to invoice based on hours used. They will exceed their retainer, and therefore will have an outstanding balance which they will pay.
- If you create an invoice with a negative “quantity”, the invoice cannot be copied into Xero. So for any lines for removing charges based on a deposit or discount please use a negative rate rather than a negative quantity.