Dear Dakota: How Should I Present Furniture Pricing on An Invoice?
Dear Dakota,
I do flat fee billing and am a huge advocate of “the fewer invoices the better.”
The question is: how do I invoice?
I love the invoice capability of my product management software but it lists each item by price. I can’t decide if this is a good thing or a bad thing. I love the idea of high-low design and sometimes it takes one expensive piece to make the space. I always panic when I list prices individually in case the client will see the expensive item and give pushback (even though the total is coming in on budget.) They will see the price of an individual item and think it’s too much to pay for whatever item it may be.
I’m curious how others are invoicing. Are they sending a general invoice with only final pricing, or are they itemizing each item listed with an individual price?
What have you seen work the best?
MY RESPONSE:
99% of my clients present their invoices with each item listed out, grouping only components of an item into one line (for example, rather than showing six individual items for window treatments like fabric, trim, tape, and hardware, they show "Window Treatments for Living Room" with the one lump price).
My recommendation for fewer invoices is to list each furniture item into one invoice by room rather than one invoice per item. Example: rather than sending 39 invoices for the living room furniture selections, send ONE invoice for the living room that lists all 39 pieces.
Sofa $5000
Chairs $4000
Rug $10000
Lamps $2000
Coffee table $3000
Window Treatments $7000
Subtotal: $31,000
Shipping, Handling: XXXX
Tax: XXXX
Grand Total: $31000++
In my mind, this does two things:
1) It lets you run the numbers by room to make sure YOU'RE in budget (allowing you time to add in a few lower-priced items if needed to stay within the original agreed-upon budget), and
2) It makes sense for your client because they likely have two "control prices" in their head i) the price they want to spend per room and ii) a price they're comfortable spending on certain items (i.e., like pillows or lamps - they may say, I absolutely won't spend $500 on a pillow, and I won't spend $1000 on a lamp my kids will ruin it but "I want to invest in custom art" or "the sofa is really important so I'll spend $10k on that"... *definitely learn their preferences in y our onboarding process)
If you lump everything together without any detail (like, Living room total $53,000), goodness knows you are just creating an opportunity for pushback. (And aren't you tired of that??)
That's not a typical shopping experience (where you know the price, add things to your cart, and can see the subtotal of items before you purchase). When you take away familiarity, you add friction.
Not good when we want the client to say YES to the complete design.
Your client will likely want to 1) see the price of individual items to see if they actually do love it (example: "I LOVE this piece of art, but not $10,0000 love it") and 2) see the individual price so they know it fits within the range they are comfortable spending on that particular item (because sometimes, when they see the line item detail, it's actually NOT that expensive, versus seeing it all together where the number is just huge).
The client experience is about providing clients with the information they need to confidently move forward with a design they'll love. Take away their confidence in your pricing, and they'll doubt your every move.
**shudders to think about it**
As long as there is no price gouging (setting the price of an item exorbitantly high to gain unprecedented profit), designers do have the latitude to word their invoicing in ways that appease their clients. So if the designer fears the actual cost of one item may cause a red flag but firmly believes that item is the perfect choice for the overall design scheme, I believe there are perfectly honest and ethical ways to craft the wording of an invoice to deflect attention to that particular price issue.
All this aside, you must have the budget conversation early and often. Then you absolutely have to respect the budget. And if their budget is unrealistic, it's on YOU to educate your client on what is feasible and then decline the project if you can't work within their budget parameters.
So if you find "that one thing" that is so perfect but is WAY outside the budget, do everyone a favor and present that item to your client before you incorporate it into the design. OR, include it in the design and then also include an alternate lower-priced option so your client can choose. (but don't create two separate designs-if the high-priced item is so specific that it will be the core of the design, then definitely get that approved before developing the design around it).
So, in short:
Group components of an item into one line item bid (like window treatments, custom upholstered items, etc.)
Create one invoice per ROOM with the line items detailed
Have the budget conversation early and stick to it
And one other thing: if you're always over budget when you present, you either need to 1) market to higher-end clients with larger budgets or 2) source from lower-priced vendors to meet the needs of your existing client base.
If you have a question you’d like answered in an upcoming Dear Dakota post, please email us!
Ready to dive deep into invoices? Check out this guide to tracking and detailing hourly design services.
