There’s more to market gardening than just growing fruit and vegetables.
When I first started selling produce from my market garden I didn’t give much thought to selling. Yes, I did want customers to pay for my produce, but I didn’t really understand the whole invoicing process. Over the last few years I’ve begun to appreciate the importance of having a good system for collecting money and the value of invoicing for record keeping.
Now, I don’t contend that my system is the last word in invoicing, but it works for me. It fits the characteristics of what I consider a successful collection system: It is easy for the grower to understand and use and, most importantly, it facilitates getting the money from the customer to the grower.
I try to keep costs as low as possible. I don’t buy commercial invoice statements. I have the invoices for each customer on my computer word processing program and use that as my master.
At the top I have my contact information, including name, address, telephone and email address. Following that I have the date and below that (similar to a letter) I have the chef or contact person’s name, address and telephone number. Below that I have the invoice number, which is the date of the delivery. For multiple deliveries on the same date, add a dash and a letter, such as 082306-b. I print out two copies - one for me and the other for the customer.
- Grower name:
- Grower address:
- Grower telephone:
- Grower fax or email:
- Date:
- Customer Name:
- Customer Address:
- Customer Telephone:
- Invoice #
I discovered early the value of confirming a delivery. To take care of that I always have someone at the restaurant or market sign the invoice for the shipment. One of the invoices then stays with the customer and the other goes home with me. At home all invoices are placed in a binder. Whenever I receive a check I write “paid” on the invoices in my binder. The stubs go into the pocket of the binder. If I have been paid in cash, as sometimes happens, I write paid in cash at the time I receive the payment.
Customers vary in their payment schedules and even in the degree of organization in being able to find your invoices. Because of that I started preparing what I call a statement of outstanding invoices. This is a compilation of outstanding invoices from a particular customer so that they can see clearly what they owe. I generally wait about a month until I prepare such a statement.
The heading of the statement is similar to the invoices I send out. However, instead of an invoice number I write “statement of outstanding invoices.” After that I simply list all the invoices that are outstanding and the amount owed for each. At the end I total all the invoices. I have some customers who simply wait to pay until I present them with such a statement.
Invoices As A Planning Tool
Within an invoice I always try to include as much information as possible. This usually consists of a description of the item, the amount sold (by container or weight), unit price and total amount. It looks something like this:
20 lbs mixed heirloom tomatoes @ $3.50/lb $70
This allows me to use this information at a later time. For example, I can track the growth of a particular crop by noting sales. It also becomes easy to chart fluctuations in price throughout the season. In addition, when I need to set prices for a new year, I have information on my previous pricing.
By taking care to invoice your customers, you will not only insure that you get the money coming to you, but you will also create a powerful tool to help you in planning for the coming year. You will be able to determine times of peak harvest, the percentage each crop contributes to your total income, and even how to better plan for early and late crops.
Over time these records become more valuable as you are able to see trends and patterns over a number of years and gain a small measure of predictability in your production and marketing.
One of my end-of-year “garden chores” is tracking down those payments that are still outstanding even though I have sent a statement and waited a reasonable amount of time for a response. In these cases I directly contact the person responsible for payments. Usually the person is eager to resolve the matter. In extreme case I have also called the chef and asked him to intercede.
Sometimes a customer will pull the, "I'll send it to you next week," line after I have contacted them repeatedly. One option is to email the customer asking if it is ok to stop by for the check, and follow up later in the day with a phone call saying you will be there in a short time. You can always add a small sob story of how you are short of cash this week and you need the money for mortgage or college tuition.
After all is said and done, if a customer simply decides not to pay you, there isn't much you can do. The best precaution against this is to keep new customers to a tight collection schedule. Make sure they pay regularly before they owe you a lot of money.