Roofing Invoices 101

Roofing Invoices 101

You’ve probably noticed that there are a lot of invoices in the roofing business. In this post, we’ll break down the different invoices you’re likely to encounter or need to use.

What are the different types of roofing invoices?
Material Invoices and Labor Invoices (also known as subcontractor invoices) are invoices contractors can expect to receive and completion invoices are invoices contractors should be sending. Let’s walk through them.

INVOICES CONTRACTORS RECEIVE:

What are material invoices?
Material invoices are invoices a supplier gives to a roofing contractor after receiving an order for materials needed on a project or job.

Yes, contractors do need to pay this invoice. But it can also be used in their supplementing efforts! Material invoices can be used to verify that the Xactimate pricing and quantities listed on the scope of loss are adequate. For example, decking prices skyrocketed this year due to the hurricanes. Xactimate updates the pricing monthly but sometimes can’t keep up with the market so it’s a good idea to use the invoices to check the pricing when building supplements.

Contractors can also use the invoices to prove if step flashing, skylights, additional ventilation, etc. were used for that particular project. They can submit the invoice (with redacted prices) to the carrier with the supplement to prove how much material was actually needed.

What are labor invoices?
Labor invoices are the invoices that the subcontractors or roofing crews turn into the contractor (roofing, siding, gutters, specialty trades, etc.) for jobs performed. It normally lists the quantity of material installed and number of hours it took to install each material line item. 

Like the material invoice, contractors can also use the subcontractor invoice for supplementing. In fact, we recommend using this invoice over the material invoice because the material invoices don’t always reflect the true amount installed, but the labor invoices do! Labor invoices are particularly important when supplementing for specialty trades on insurance roofing jobs. By default, adjusters use low-end pricing on many Xactimate line items that are specialty trades. For example, a custom copper awning likely requires a highly skilled craftsman who specializes in copper fabrication. Adjusters may assign standard roofing labor rates to these trades, resulting in an amount that doesn’t come close to covering the actual cost to the contractor. A copper specialist may charge $3,000+ for the awning install while the adjuster prices this trade at $1,200 in Xactimate.   

INVOICES CONTRACTORS SEND:

What are the different types of invoices a roofing contractor will send?
There are two different invoices contractors should send once the work is completed: completion invoice and a homeowner invoice.

What is a completion invoice?
A completion invoice (also known as a Certificate of Completion or Notice of Completion) is a bill the contractor sends the insurance company upon completion of the project so that the carrier will release the depreciation payment. In some cases, the homeowner will sign this document to certify that the work has been completed. This may even be required by the insurance carrier in order for them to release the final payment. 

The completion form is oftentimes accompanied by a post-production supplement for things that came up during production like permit fees, additional materials needed, Paid When Incurred (PWI) items, Paid When Actually Repaired or Replaced (PWARR) items, etc.

What is a homeowner invoice?
A homeowner invoice is what the contractor sends the homeowner after work is completed. The homeowners normally have some funds (ACV) from the carrier and their deductible and won’t pay until they receive this invoice.

The invoice needs to have language indicating that it is a “preliminary” invoice that does not include pending supplements the contractor may be requesting from the carrier. This is important if the carrier sends a payment to the homeowner that is different from the amount on the invoice. That way the homeowner knows the additional money is meant for the contractor and not their own pocket.

The homeowner invoice may also list upgrades or additional work that the insurance company has not agreed to pay for on the scope of loss. It is important for the contractor to clearly communicate to the homeowner which portion of the invoice is paid for by insurance and which is paid for by the homeowner.

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