I have been good about entering the many notions/supplies/materials in my book keeping system. It was kind of tedious at first, but now I'm glad I did it; makes invoicing easy (although I'm still slow at it). I have a couple of questions about how you charge for upholstery materials; 1/4 deck padding, and the thicker padding (looks like cotton, but is polyester, I think). Do you charge by the foot or the inch? how?
I price welting and zipper chain by the foot and foam by the inch. But I'm curious how you price the other items.
I charge by the yard for zipper as that is how I purchase it. Strataglass I charge for whole sheet even if customer only needs half. Who knows how long till I use the rest of sheet.
With furniture we don't invoice for all the different supplies we use on each job. But rather lump it all together with the over head. That is except for things like foam or fabric which are expensive and differ from job to job. You could go crazy trying to measure and invoice all the welting and zipper you would need for each job.
Over the years we have come up with an average hourly over head price to charge for each piece which includes utilities, rent and car payments, supplies, ect.
When it comes to foam we buy by the slab. We usually figure three cushions per slab. So a chair would be 1/3 slab and price accordingly. For other jobs we charge by the board foot. Your supplier should be able to tell you the formula for board foot calculations.
Its good to keep accurate records of supplies bought. Soon you will be able to come up with an average over head fee. For me its about $5 an hour. A Sofa that takes 20 hours to build would take $100 for over head. This fee is included in the labor fee and not listed separately on the invoice.
I do it similar to Kody. I don't detail each and every supply item on the invoice. I only list material, labor, and foam. I don't want to give the customer too much to think about.
I knew another upholsterer in town who did it that way. Pretty soon, his customers were furnishing their own thread, cording, zipper, etc.
Thus the difference between charging for it and calling it out as line items on an invoice.
Quote from: kodydog on December 20, 2011, 07:06:57 pm
With furniture we don't invoice for all the different supplies we use on each job. But rather lump it all together with the over head. That is except for things like foam or fabric which are expensive and differ from job to job. You could go crazy trying to measure and invoice all the welting and zipper you would need for each job.
...
Its good to keep accurate records of supplies bought. Soon you will be able to come up with an average over head fee. For me its about $5 an hour. A Sofa that takes 20 hours to build would take $100 for over head. This fee is included in the labor fee and not listed separately on the invoice.
My father was a plumbing and heating contractor. He always said, "you never lose money with 'stock and time'". I've never forgotten that; and I recall his meticulous accounting for runs of tubing and all the fittings when he'd bid a job. That's why I've opted to enter my notions/supplies as seperate items, that way I can track the quantities I use and control the prices I charge for them. I do a tremendous variety of work in my shop (drapery, slipcover, marine/awning canvas, and a little upholstery stuff) and a lot of repair work, I know what I want to make per hour and all other required items are charged to the job with the mark-up I wish to make on them. I was wondering how you guys deal with it in your own shops, thanks for your answers and thoughts on the subject.
I am going to stick with my present plan for the time being and I'll report back how it's workin' for me.
Quote from: bobbin on December 21, 2011, 08:35:29 am
I am going to stick with my present plan for the time being and I'll report back how it's workin' for me.
Do you give the customer an invoice with all the little incidentals listed seperately? It seems like the bill on some jobs would be as long as one from the hospital after an open heart surgery. :D
If I gave a long detailed bill to some of my customers around here, they'd probably call the police. :o
Obviously, your way is the definitively correct way. I'm just too lazy to keep up with all that stuff. I just figure a flat rate for supplies into my labor charge.
As it is now, a lot of my customers have the "brilliant" suggestion that I reuse their old zipper in order to save them some money.
Yup, that's what I do!
I spent some time figgerin' out prices and my mark up but once I had it done all I had to do was plug in the numbers and hit "send/print" and it was done.
I charge for my labor, the materials required, and the taxes are tallied. Wicked easy! Don't get me wrong, I've had to crunch some numbers to get the correct price, but once it's done, it's done!
It may come back to bite me in the ass, but for now... I'm "good with it".
Hey bobbin,
Merry Christmas to you!
I don't want to sound like I'm better at YOUR business but you wanted comments. There is nothing wrong with tracking everything you put into a job in fact its good business. Inventory comes to mind. Line items on an estimate is not in my opinion. It is just confusing and opens the gates for "reuse my zippers" kinda thing. I would say do what your doing but on the paperwork to the client just give them a price for labor, materials. You can add whats included but not as line items with pricing for each line item.
Have fun.
And...
HAPPY NEW YEAR
Quote from: sofadoc on December 21, 2011, 02:52:47 pm
As it is now, a lot of my customers have the "brilliant" suggestion that I reuse their old zipper in order to save them some money.
Zippers are easy. My customers want me to reuse the welting ???
I use Bobbins method in my final invoice, but for estimates, I use a shop charge. A shop charge is an estimated amount for materials for each different piece, over the years I have acquired a reasonably good average. Charging for each item is easy once you have the program set up and it has helped me to properly price my goods and services. Surprisingly the list usually does not come out that long for individual pieces of furniture. I find that it helps justify my asking price, occasionally I get people who ask about using their zippers over, but once I explain to them the extra labor in involved in removing the zipper is more costly than the new one, they don't have a problem with it. Quick Books also keeps track of my inventory, I still have to do a physical count at years end, but this information helps me know what items I move more than others, I can now buy them in bulk, thus saving time and adding extra income because I can get better prices. I usually sell the items in the same way I buy them, cotton and horsehair by the pound, yard goods by the yard and so on. Some items such as decorative tacks I charge by the inch. I have keep track of how long it takes me to install decorative tacks then I charge for the labor and the amount of tacks it takes to do a length, or run and then just divide down into the inch. At the end of the year I have a detailed list of items bought and sold, it really helps come tax time. Don't get me wrong, I do not count staples, or tacks, or length of sewing thread, these items are listed under overhead, buttons? yes I charge per. button. Spring up twin can easily be charged for by weigh, weigh the spool before and after tying springs to get the amount sold.
It really gets my gander up when people try to nickel and dime their upholster, when was the last time they followed their plumber around and asked him to reuse a valve or something, why do people continue to do this, because we let them. Maybe I'm just crazy, but I actually think upholsters are skilled artist and deserve to make a profit on their items and labor. Maybe I should change my handle to Crazy Mike. LOL I am not knocking other peoples system, it it works for them, great, but if I picked my car up from the mechanic and the invoice just listed one lump sum called "parts" I would be more than a little suspicious.
Quote from: mike802 on December 21, 2011, 08:10:19 pm
if I picked my car up from the mechanic and the invoice just listed one lump sum called "parts" I would be more than a little suspicious.
I just pulled my last truck repair bill from my local mechanic. It listed 2 items.
1) LABOR
2) PARTS
We're more "laid back" in Texas ;)
Seriously though. If I gave my customer an itemized invoice with items like spring twine on it, they'd tell all their friends "
DON'T go there! That guy charges extra for
everything!"
Most of my customers leave the invoice laying on the counter when they pick up their furniture. They just write me a check, and go.
Your right mike, everyone has to invoice the way they feel comfortable.
The thing I find funny with automotive repairs is they will mark up their parts 4 times and make their labor look like their only making $5 an hour.
That might not be a bad idea. On a cushion we could charge $50 for the zipper. $40 for the welt. $40 for new Dacron. And do the labor for free. When a customer calls we could say the labors free but the parts are $90 how soon can you bring it by. :D
Sofadoc and Kodydog, I think it is interesting how people in different locations can have very different expectations on how they are charged. In my parts, people want to make sure they are getting their moneys worth and expect an itemized list of just what was used and what they were charged for and don't be surprised if they check and make sure what they were charged for was actually used. After a couple return visits, they tend to be not so interested and are more trusting that they received the value they paid for. I am lucky to live in an area where we have mostly honest mechanics, but my sister who lives 4 hours away in Boston the opposite is the rule. Her husband is constantly bringing his car up here and either going over it his self, or double checking to make sure the work was actually done. On more than one occasion he was told he needed work done, he would bring his car up here to do the work only to find out it was not needed.
Around here Its very hard to find not only honest but competent mechanics. You would think if you took it to the dealer you'd be alright. Took my van in for its 30K mile maintenance. The guy at the desk said it would be $350. I started to laugh and asked, what the heck are you going to do. He started to say something about taking the top half of the engine apart. I said, wait. Got out my scheduled maintenance book and showed him what I wanted done. About $100 worth of work. The van is now long out of warranty and I do most repairs and maintenance myself.
Quote from: mike802 on December 22, 2011, 07:52:00 am
Sofadoc and Kodydog, I think it is interesting how people in different locations can have very different expectations on how they are charged.
Occasionally, a transplanted northerner will move to town. They
are usually a bit more skeptical at first. But they soon adapt to a much less suspicious lifestyle.
I'm not saying that we're
all just a bunch of honest, easy-going "good ole boys" here in Texas. We've got our share of unscrupulous mechanics and contractors for sure. But in a town of around 25,000 it doesn't take "word of mouth" very long to get around.
I can't remember ever having a customer question the ingredients of an upholstery job (other than seat foam).
I just lump it into one price
my cost on materials
and I figure my time to do it labor rate and come up the cost to the customer.
Oviusly the labor is the meat of the matter. If my customers saw what inwas paying for materials and how much was for me they would think there paying way to much.
Your all going to think I am completely nuts but on my invoice I list one price which is the total price.
I do not separate out labor, materials or anything else. I list one price........period. I have never once had a customer ever ask about labor costs, materials or anything else. I do not want to have to start explaining my material and labor costs to customers so I purposely leave them out. The more info you provide on a bill, the more customers will want to nit pick your costs.
BUT....... I have a worksheet I use in the shop and know every single dime a job costs. My customers could careless what a snap, velcro or anything else costs. All they care about is the final price.
Chris
Ok, I read there are different ways to do things, maybe I can add a question for further clarification for those who do finite management of cost:
The question is, you have a lot of stock on hand already and buy more. What price then do you charge for those items?
You can quickly see what the accounting problem could lead to; for example I used 50 yards of white thread, the rest of an old stock (20 yards) and some white thread off the newest stock purchased at a higher price (which was 30 yards)?
This is happening because the times we are in prices are rapidly going up on supplies. This isn't a unique problem to our business either. Hotess Cup Cakes just files a second bankruptcy during the last three years, both which were as a result of ingredient prices for their products going up. If they had bumped up the prices on products equal to their cost increases, one would think the results would have been better for them. But, that makes your head hurt when thinking about an assembly line of cup cakes and all of a sudden there is an increase in the ingredients. ::)
There is more to the marketing program than I have presented but you get the drift.
Doyle
Doyle: What you are referring to, in accounting is called L.I.F.O and F.I.F.O, "last in first out" or "first in first out" it is a method to take care of changing prices on inventory, it does not matter which method is used, only that the same method is used all the time once one has been decided upon. In my business, I usually can afford to run out completely, or very close to, before I reorder, thus. making the changing of prices not really a big deal as far as the accounting and charging for goes.
Classic accounting:
LIFO last in first out - charge @ the current rate, regardless of the original cost
FIFO first in first out - charge @ the original purchase price
FISH first in, still here - just gotta find it, I know there was some left
Ok Doyle lets say you buy 20 bolts of fabric at $10 a yard. Over a year you sell all but 3 bolts and so you order 20 more bolts. Only this time its $15 a yard. Do you now raise the price of your leftover fabric. OR do you discount it to move it? OR do you call your supplier monthly and ask for the latest price and raise it accordingly, knowing someday you will have to reorder at the higher price?
You try to get the prevailing price. Whether you do or not depends on the market.
Many in business try to hold prices down to keep their volume. The grocery business today is in trouble due to their cost rising but can't raise their prices accordingly. The consumers are refusing to pay higher or unable to pay higher prices. You know the outcome, yes they are trimming stores and no one knows where it will stop.
Doyle
LIFO.
I studied business in college (among other things, lol), in particular retail buying. The object of the game when buying merchandise for a store is to factor the necessity of mark downs into the equation when you apportion your "open to buy" to the various departments you're required to stock.
So, when you buy in new stock you already know how much you may mark down the "old" (remaining) stock while still making money on it. You apply the same formula to the new stuff, meaning you've already built in the necessity of a mark down on it before you pay for it! But it's tough to go wrong when you're dealing with zipper chain, buckrum, drapery lining/interlining, batting, and deck padding! You won't need many mark downs on that stuff.
All of this is why I am not really very interested in stocking anything more than very basic notions and materials. I have not yet established accounts with fabric suppliers but when/if I do it will be for cut yardage only. NO way will I risk purchasing anything more than specified yardage for a job because predicting a customer's wishes is aiming at a moving target.
Quote from: byhammerandhand on January 11, 2012, 08:55:13 am
Classic accounting:
FIFO first in first out - charge @ the original purchase price
Don't ya'll wish that gas stations did this ? ;D
Chris
mike do you give the customer a estimate and then the final invoiced bill when your done?
me I have to give them the final price to start, so lik ekody i just have a general price for everything. fabric and foam or stainless parts and number of sippers or amount of vinyl sheets. for the material cost plus X for insedentals. then add my time i figure for the job and there the contract price . bor a cover say Ive coem to know if its say 10 yards i can multiple 10 yards times X amount of dollarsa to get a quick figure.
I use quickbooks and it works well for me. I do an itemized estimate (for me) to get my price but then I transfer that price to my customers estimate which tells him or her what I am providing and a final price. Only once have I been asked for a labor and parts breakdown and I provided it.
I do it the same way you do bobbin for the same reason, huge variety of work.
From embroidering a jacket back, cushions, custom bedding, boat cushions, boat covers & all sorts of strange repairs. ::)
I itemise everything. I buy my 'batting' I think you call it (we call it dacron) by the kg, so I make a wild guess at the cost of that. Stuff I buy by the metre thats how I charge it out + my mark up of course.
I don't have a problem with customers wanting to reuse items as I just explain the extra time it takes to make it possible. Unpick/clean whatever.
I am running a program called Instant Admin, which allows me to create my own price list, It's a right PITA to get everything in there but now it's been running a few years I just have to go through with price changes.
It's limited in that I have no stock control or purchase orders. But I can record purchase totals & record what I have bought as notes.
Suzi
I love that we have members in all corners of the world. I particularly enjoy reading expressions and terminology that is "foreign" to me.
"Batting" has a certain connotation for me... it bats out a cushion, and adds loft and "fill" to a cushion. Insulation for houses is commonly referred to as "bats" in my neck of the woods.
"Dacron" connotes sailcloth to me; esp. the foldable tape used on the edges of sails. "Dacron" also tells me instantly that it's polyester.
Funny how terms change from place to place, huh?
Yeh, gets confusing sometimes, ??? you lot talk about welting ! I am still not sure if thats piping or binding ;D
Suzi
Quotemike do you give the customer a estimate and then the final invoiced bill when your done?
me I have to give them the final price to start, so lik ekody i just have a general price for everything. fabric and foam or stainless parts and number of sippers or amount of vinyl sheets. for the material cost plus X for insedentals. then add my time i figure for the job and there the contract price . bor a cover say Ive coem to know if its say 10 yards i can multiple 10 yards times X amount of dollarsa to get a quick figure.
When a customer absolutely has to know the final price, I call that a bid, not an estimate. When I make a bid on a project I work myself up an estimate, pretty much the same for a customer, but if I am bidding I take that estimate and add 20% or 30% depending on the type of project to protect myself.
If someone is OK with just an estimate, like a sofa for instance, I already have a labor charge for the type and style of sofa they may have, so all I have to do is estimate the amount of supplies I will need. I call this estimation a shop charge, I have an average price I use for this, but during the job I keep close track of actual materials used and charge accordingly, I do this because Quick Books automatically adjusts my inventory.
Quote from: Grebo on February 06, 2012, 01:13:36 am
Yeh, gets confusing sometimes, ??? you lot talk about welting ! I am still not sure if thats piping or binding ;D
Suzi
Talk about confusing, Piping, cording and welting are all the same.
I am planning to start my own business and was very confused about how to charge for upholstery.Thanks to all of you for the info.I would also like to know if you include vinyl costs and and shipping?
carpet cleaning sydney (http://www.citymetrocarpetcleaning.com.au/)
I'm in trouble !?
I have been in business a few years now... I haven't been doing anything with inventory.
I order the foam felt supplies ..pay for it / order more ..same with fabric .
I got a bookkeeper as I was not good with the books , I am better at the craft...so why hasn't she asked or told me I should itemize everything ?
What about fabric orders ...I ordered 12 yds last week to do a job for a family memeber ummm errrrr(under the table) I have been paying my suppliers for it all thinking that was good enough .
I am not in the states but now I am getting panicky here.
How do I start now ?? If I get audited am I in big trouble ???!!
Uggh !! I am so bad at business sense
Should my bookkeeper be guiding me in this ??or am I supposed to know whet the heck I am doing??! ..she knows that was why I got her being as I know so little .
My wife is a book keeper. A friend asked her to add up all his expenses for his construction business. He was deducting things like a big screen TV. Is it her responsibility to tell him he can't do that? She did and he told her to add it in.
A book keeper gets the books ready for the accountant to do taxes. All the book keeper go's by is what the customer gives them. If your looking for business advice, I think that would be more of an accountants job.
Don't panic. There is tons of info out there. Your a smart girl. Read. You can figure it out.
Here we have an organization called SCORE. Retired business people helping entrepreneurs. I'll bet they have the same or something smiler where you are. Check them out. They can be a great help.
As far as not reporting cash deals. I would never advise doing that. But as long as there is no paper trail, it will not show up in an audit. :) I always pay taxes on my cash deals. Did you hear that IRS, always.
I'll look into that score idea thank you...it sure would be nice to have some guidence.
I am very above board in so many ways., I am always paranoid of using reciepts that don't pertain to the business , too afraid of the consequences I guess.
I had a load of gravel dropped off at one time and he only took cash ., it raised a flag with me ...couldn't someone report him ? I can't see him always putting it in the books ., what if he dumps a load with an authority of government heh heh / he would be nailed ! ... I 'm sure I'm not the only one thinking that way with him delivering only wanting cash no cheques.
I get all messed up on the cash deal thing..I have found since the HST so many people asking me if I would do cash ...do you find that your asked more now than before the HST came in to affect ? I get nervous when asked to do cash ..its nice for small stuff but I need the funds in the business account to pay suppliers
Any of you guys who don't like cash customers, send 'em to me . I'll take 'em!
I don't have to worry that 10 days later, I'll find out that their check didn't clear.
And I don't have to wait 2-3 days for a credit/debit card transaction to post.
And more importantly, I don't have to give 2 or 3% to my credit card processing service.
As long as I report it (cash sales) on my end, I don't care what they do on theirs.
The Post Office is a block away from my shop. When I take in a large amount of cash, I go there and buy money orders to mail to my suppliers.
Simply as follows.
Labor cost ...
Supplies = about %10 of labor cost ( I do this rather then figure each item. For me it's just supplies)
foam cost ...
Fabric cost...
Sub total ...
Example
Sofa Upholstery
Labor $1200
Supplies $100 (new item)
Seat foam $250
Fabric $400
Total ...
In reality this has meant to me a prices increase of about 10%. This is do to the fact I was not charging for general supplies. I just figured it into labor. And best of all it is real profit and no one has complained. They just seem to except it, and it's been 2 years now.
Give it a try. You can be looking at perhaps at least a few thousand dollars more in profit a year.