Read this ultimate guide for a step-by-step guide on how to write a plumbing quote and invoice (including how to calculate VAT).
In 2020, plumbers were the most in-demand tradespeople — with 64% of people saying they required plumbing services at some point during the year.
So, there’s never been a better time to win new business and scale your company.
But, to run your organisation successfully and turn a profit, you need to know how to create financial documents correctly.
With this in mind, we’ve built this ultimate guide talking through how to calculate the VAT rate on plumbing services — so you know how much tax to add to each job. Plus, we’ll go through a step-by-step guide on how to write a plumbing quote and invoice.
Let’s dive in.
Shortcuts ✂
You can jump straight to sections using the links below:
- What is the VAT rate on plumbing & heating services?
- How to write a plumbing & heating quote
- How to write a plumbing & heating invoice
- How plumbing and heating businesses speed up quoting and invoicing
WHAT IS THE VAT RATE ON PLUMBING & HEATING SERVICES?
To sum up: If your taxable turnover is likely to be over the current VAT threshold of £85,000, then you must charge VAT on your services. This is also known as ‘output tax’. Currently, there are three rates that a plumbing and heating company can charge, which are as follows:
#1: Standard Rate VAT 📊
The standard VAT rate on plumbing and heating services is 20% and applies to work such as:
- Domestic repairs and maintenance
- Work to existing structures
- Work to newly built structures that don’t meet the zero rate criteria
#2: Reduced Rate VAT 📉
There are certain situations where you can charge a reduced rate of 5%, for example:
- Installation of energy-saving materials
- Renovating a property that has been vacant for two years or more
- Residential conversion work
#3: Zero Rate VAT 🆓
You do not need to add VAT to invoices for zero-rate plumbing and heating services, which include:
- Services for a disabled person
- Work on new build houses
- Work on qualifying buildings if you are the main contractor — usually, these buildings are used for charitable or non-business purposes
📕 Learn more: You can check in on the latest VAT rates on the GOV.UK website.
HOW TO WRITE A PLUMBING & HEATING QUOTE
Before you begin putting together a quote, start by assessing the job’s complexity.
So many plumbing and businesses have lost out on income due to unexpected problems and additional hours of work. And your customers won’t be happy if the project falls behind schedule.
So, before we begin with the next three steps, make sure with every job that you: visit the location, take notes and then send your customer an estimate. The estimate will include these details 👇
STEP 1: SET THE RATE FOR YOUR SERVICES
To set a rate, you’ll need to calculate how much you require to pay your bills and make a profit, whilst remaining competitive. Many plumbing and central heating companies choose to quote their services in minimum blocks of time.
For example: Two hours is enough time to install a new sink. As you get familiar with doing certain jobs, like boiler installation, underfloor heating or installing central heating systems, you get a feel for how long a wide range of jobs will take.
With this in mind, it’s a good idea to make a price card and rate list as a starting point. You can then tweak your prices depending on each customer’s requirements.
Also, don’t forget to factor in any additional time you spent inspecting the problem initially, as that will have cost your team time that they could’ve used to attend to another job.
💡Top tip: Luckily, pricing your work needn’t be a headache. With certain tech in place, like field service management software, you can create a digital rate card and price list that you can easily tailor to your clients’ projects — all at the touch of a button.
STEP 2: COVER ADDITIONAL FEES
When putting together an estimate, it's crucial to always include any other expenses you or your team will incur whilst carrying out the job. Like:
- Travel - you can either charge a fixed rate or calculate your mileage
- Union dues - items like union dues, pensions and insurance don’t need to be itemised, but you should include them as part of your hourly or base rate
- Emergency call-outs - that cover weekends, holidays or after-hours work
STEP 3: CONSIDER SUPPLIES AND MATERIALS
You know, aspects of plumbing require you to provide supplies and materials and these add to your overall costs.
So, once you’ve completed your initial inspection of the problem, make a note of the items you think you’re going to use and price them up.
Your technicians should turn up at the job with all the proper equipment so they can fix the issue the first time, which is why you must be thorough with your list. Fortunately, there is plumbing field service software designed to give you visibility over how much stock you have available and ensure you have enough to carry out the work.
Let’s look into this a bit more 🔍
Actually, the best plumbing apps allow you to assign supplies and materials to particular jobs — meaning no one on your team arrives at a job without the right gear. Plus, you will be able to see exactly how much stock you’ve assigned to the project, so you can calculate the total cost quickly.
And aside from your quotes being more accurate and straightforward to create, you’ll find that your first-time fix rate increases and your technicians can attend more appointments each month.
Now, let’s look at invoicing…
HOW TO WRITE A PLUMBING & HEATING INVOICE
Once a technician completes a job, it is actually a legal requirement to send your customer an invoice. That’s because invoices establish details such as what services your plumbing business provided, how much the customer owes you and the payment deadline. All essential terms of service.
Not only does creating accurate invoices enable you to maintain your bookkeeping, it also helps prevent disputes or late payments.
With their importance in mind, here’s the must-have information to include on your invoices 👇
STEP 1: ADD CONTACT INFORMATION AND COMPANY LOGO
🔍Did you know that 75% of people recognise a brand by its logo?
So it’s worth taking the time to add your logo onto each invoice you send because your customers trust that the invoice has come directly from your organisation and are more likely to pay it, and on time.
Another tip: Your company name and contact information must also be in a large font at the top of the invoice. And you should include your customer’s name and address to ensure that it reaches the right person or department.
Again, invoicing is something that tech can help with 📲👇
With field service management software, you can handle invoicing directly on the platform and create personalised documents in seconds. For example, you can add your logo into a pre-designed template for a professional-looking invoice.
Plus, with some software, the template also pulls through all required information — like the customer’s address — and automatically adds it into the appropriate fields.
The end result? There’s less margin for human error and a reduced chance of late payments.
STEP 2: ADD INVOICE NUMBER, ISSUE DATE AND DUE DATE
Invoice numbers make it simpler for you to organise your sent invoices, track pending payments and keep a record of your income for tax purposes.
What this looks like: The number should be unique, around three to five digits long, and clearly visible on each invoice.
Next, you need to add the invoice’s issue date, showing the customer when you sent the payment request.
Quick heads up: Clients have a certain number of days after the issue date to pay the invoice, which you must indicate by including a due date.
STEP 3: INCLUDE AN ITEMISED LIST OF SERVICES AND PARTS
Customers should also be able to see what they’re paying for, so you’ll need to include this information 👇
- A description of the job carried out, the number of hours it required, your hourly rate and the total amount billed
- Parts required to complete the job, quantities, price per unit and the total amount
Remember: Technical plumbing terms make sense to you, but customers will not share the same knowledge. Keep the descriptions simple, so there is no confusion on their end — ultimately, if they need to ask questions or clarify details, it will delay the payment.
💡Top tip: You can keep a more in-depth description of the work in your CRM (customer relationship management) system, for your own record. They are a great tool for tracking all interactions you have with your clients, including any notes your team makes about the job — easily enabling you to refer back to specific details whenever you need them.
STEP 4: TAKE BEFORE AND AFTER PHOTOS
Since plumbing is a highly skilled trade, it’s crucial that your technicians take before and after photos to demonstrate the work they did.
Why?
Because customers may not understand how the plumbers fixed their issues, or the plumbing may be in areas they cannot access — like under the floorboards. Essentially, sharing photos provides your clients with peace of mind that their problem is resolved.
💡Top tip: Using the tech we’ve mentioned, your technicians can take photos on their mobile devices and instantly attach them to the customers’ profiles. This means both you and your clients will have a complete record of what the plumbers did. And, if there are any further issues down the line, it will be much simpler to look back through the job history and resolve the problem.
STEP 5: CLEARLY STATE THE TOTAL AMOUNT DUE
Although you’ve already created an itemised list of the costs, you also need to provide your customers with a total amount due.
💡Top tip: It’s best to put the total invoice on a separate line and, ideally, in bold so that it stands out.
Now, getting the total correct is paramount to ensuring you get paid on time. Any disputes will cause a delay in the payment process, so you should always ensure that it’s right the first time.
Did you know? Many field service management tools include an invoicing and payment feature that automatically pulls accurate details and costs into a premade template.
By digitising your invoices, you not only save time on arduous administration tasks but also lower the risk of human error and thus get paid by the deadline. That’s a win for both your back-office team and your cash flow.
STEP 6: NOTE YOUR PAYMENT TERMS
In addition to including a due date, you must also clearly state your payment terms so things like:
- Late fees: Once an invoice becomes overdue, you are allowed to charge late fees. However, you should tell the client exactly how much you charge in such situations.
- Accepted payment methods: Tell your customers how they can pay for your services. For example, if you’re using field service invoicing and payment software, people can pay from their mobile devices the minute they receive your electronic invoice.
- Guarantees and warranties: If you’ve included a warranty on any parts or you offer a money-back guarantee, you need to specify the terms. For example, how long is the warranty valid? Stating these details in writing mitigates the risk of disputes further down the line.
STEP 7: INCLUDE A PERSONALISED NOTE
🔍 According to research by PWC, 42% of people say they would pay more for a friendly customer experience.
So, it’s a good idea to include a brief, personalised note at the bottom of your invoices.
Quick heads up: It’s not a legal requirement to add a note, but it is a friendly touch that will make you stand out from your competitors. You can thank your customers for their business or even use it as an opportunity to request feedback and referrals.
Why’s this recommended? 👇
Customers will appreciate the kind message and be left with a more favourable impression of your plumbing business, meaning they’ll be more inclined to use your services again in the future.
HOW PLUMBING AND HEATING BUSINESSES SPEED UP QUOTING AND INVOICING
You’ve probably spotted that tech can massively speed up the quoting and invoicing process by allowing tools and automation to do the leg work. And that’s why it's a popular choice for plumbing and central heating businesses.
Not only does the system interlink your CRM, asset management tool and pricing information, it makes the process of putting together an accurate quotation happen in just a few clicks.
Then, once your technicians have completed their jobs, they can instantly generate invoices on their mobile devices and share them with customers in seconds.
The end result? The invoices pull through all essential information, from final costs to photographic evidence, so your clients can check that they’re satisfied with the details straight away.
MAKE QUOTES AND INVOICES FOR YOUR PLUMBING AND HEATING BUSINESS IN SECONDS
With BigChange’s job management software, making a payment has never been simpler. Instead of waiting days — or potentially weeks — to receive an invoice payment, your customers can pay the same day using a range of convenient online methods.
It’s a win-win for you and your customers. Your clients will appreciate the speedy service, and you’ll free up more time to focus on doing what you do best.
Create financial documents the fast way:
- Generate and share invoices, quotes, estimates, purchase orders and credit notes in seconds.
- Save time using our easy-to-use templates to pull through pre-saved line items and automatically calculate job costs, so no more time manually inputting data.
Want to find out more? See how BigChange can make your plumbing and heating business grow stronger, arrange a free and personalised demo today.
