This transcript is an excerpt that features a powerful and practical training with Caleb Taylor and Clay Clark, US Small Business Administration Entrepreneur of the Year, on Thrive15.com, one of the best business schools in Florida.
Caleb: Today, we're going to be sitting down with Clay Clark, visioneer and CEO of Thrive15. Clay is going to define for us what an invoice really is and why it's important to make sure that you truly understand it.
All right, Clay, welcome.
Clay: Thank you for that welcome.
Caleb: This is wonderful. We're sitting down and we're discussing the beautiful, the exciting and wonderful topic, no matter what sounds we hear around us, the topic of accounting ...
Clay: I'm focused.
Caleb: ... and, specifically, defining the invoice.
Clay: My focus on this topic could cut through, I don't know, paper with like a laser beam precision. It's how focused I am today.
Caleb: Paper. Paper? That's crazy.
Clay: Keep going.
Caleb: Okay. Let's go. All right, so the definition that we have here of an invoice, and the reason we're defining these, as you probably saw throughout the website, we've got a couple of these segments that are 5 minutes each.
Caleb: These are for you to understand the definition of these accounting terms, and it's important for you to know. Okay, so we're talking invoice. Here's the definition. An invoice is a written record of a transaction often submitted to a customer or client when requesting payment. Invoices are sometimes called bills or statements, though the latter term has a separate meaning as explained later on.
Clay: Okay, so let's dive into it here.
Caleb: What does that mean?
Clay: One, it's a written record.
Clay: I ran my business. I used to make cheerleading mixes. I started my first business making ... I produced songs for hip hop artists.
Clay: That's true. That's how I started the DJ business. I used to have Steve Aruda the groove Buddha
Caleb: His hands are famous. You see him at the beginning of the episodes.
Clay: Yeah, he's DJ Raven.
Clay: Basically, he would mix the beats, and then I would produce the stuff. I would basically lay out the tracks. I would record the vocals with the audio and basically help these artists produce some professional demo tapes. I would charge them a set fee, and then I would take the cash and put it in my pocket. It's 40 buck an hour. Here you go. I have 260 bucks, and I just did that.
Having fun yet? This is just the beginning of what you can learn of Thrive15.com, among the best business schools in Florida! Learn what you need to know in order to start and grow a business!
Clay: At one point, I was audited by the IRS. Those guys were, like, "Hey, Brotown , we saw that there were certain cash that went into your account, into your bank. That cash that went into your bank, we would like to know if you paid taxes on it." I said, "Yes. No."
Caleb: That didn't work, did it?
Caleb: They didn't buy it?
Clay: Yes. I'm sure they like you know.
Caleb: Are they falling for it? Are they not?
Clay: The IRS agent, her name was _____. are you say, "Yosonay?" "Yes, that's what I was saying? Yes should know." Yes. I basically kind of tried to talk my way out of it, and I found out, and they said, "Hey, surprise, we're going to go ahead and do a deep dive audit here to help you discover what your invoices were. It's a written record, so you're going to need, Mr. Clark ... They said, "Mr. Clark." They always called me Mr. Clark. They were always, like, Mr. Clark, you're going to, and they kind of talk like, "Mr. Clayton Clark, you're going to need to have a written record of all your transactions," and then they get into it and they say that, "You're going to have to have every single customer and client you've ever done business with, we want a record of this."
Caleb: That's why these invoices are essential. They're vital as an entrepreneur.
Clay: It's not something that's optional.
Clay: You have to do it because, if you're watching this, I hope that your goal is not to be mediocre.
Caleb: Yeah, it's a good goal.
Clay: At one point, my business was very mediocre. I couldn't afford air-conditioning, I couldn't afford heat, I couldn't afford very much food. My wife basically took bagels out of the cafeteria at the college she was attending and brought them to me as my main source of sustenance. At some point, my business grew, and, when it grew, surprise, surprise, now, I have more money coming in. Now, the government wants me to pay my fair share, and, boom, I discovered the power of invoices. We have to have these written documents that are stating basically the-
Caleb: Here's the deal. I'm an entrepreneur, okay, Clay. I'm very busy. I don't have the time to kind of keep track of all that stuff. I don't really enjoy that process. I don't know. I don't want to do that.
Clay: I don't enjoy eating.
Caleb: Clay, everybody enjoys eating.
Clay: You guys are laughing. This isn't funny. I enjoy just working. I like working, so stopping to eat-
Caleb: Oh, that's wonderful. We're trying to relate to the masses.
Clay: I'm trying to just tell you. This is real talk for me. I would prefer just to work. I hate lunch breaks. I hate people saying, "Are you hungry?" "No, I'm not hungry. I want to work until I fall asleep."
Clay: The thing is I don't enjoy it, but I have to do it or I would die.
Clay: Some of us, like, I don't like driving to work, but I have to. I don't like answering my voice mails from people who I did not call, but these are things that I have to do. You just have to. I don't want to do invoices. Quit talking to that voice and ...
Caleb: Yeah, that's a bad voice.
Clay: ... make some stinking invoices.
Caleb: Good. Can we ... I know, as a general note, when we're talking about accounting, do you suggest, if I'm not a big fan of this, hiring somebody to act as that accountability partner?
Clay: Yeah, I'm going to help you here real quick. One, I recommend that you do hire a bookkeeper or an accountant. A lot of you who are watching this, you're going, "I can't afford one."
Clay: Here's the deal. There's bookkeepers that, for a couple of hundred dollars a month, for a couple of thousand dollars a month, you could find different people. You can pay them on a pro rata basis or on a, basically, we'll pay you based upon the amount-of-work-that-we do basis.
Clay: If we have a ton of work to do, a ton of invoices to process, you'll pay them more. Just like
Caleb: Are you saying it's worth it?
Clay: Yeah. I'll give you an example. I have one guy who work with ... I did work with two years ago. He's actually a builder. Every time that he had his accountant make an invoice for him, it costs him like $3.
Caleb: There you go.
Clay: I mean, that's like $3 an invoice. He's doing about 15 invoices a months, 150 bucks. It's fine.
Caleb: If you need help, if you're not a fan of this, go out and hire somebody. You have to have organized, specifically detailed, outlined invoices.
Clay: If you're thinking about starting a business, do this now.