Tips for making project billing work for you
Is project billing a complete pain for your business every month? If so, read on.
For very many businesses, the invoice cycle is something to be dreaded. It’s time-consuming, it’s tedious and it’s stressful.
And it’s so easy to make mistakes. Are you sure you’ve captured all the costs that were related to each project? Have you got the wording of each job right? Have you copied the figures correctly? Are you sure all the billable time has been captured? And at the right billable rates? And does the invoice tally with the quotation sent to the client earlier?
But if your system easily introduces such errors, it means that you have to invest in time and resources to check the invoices carefully before sending them out. This takes time, delaying them.
There’s no getting away from the fact that mistakes and delays in billing are very costly. So here are five essential tips for getting it right. If you find any of these hard to do in your business today, it’s time to consider upgrading the way you operate. Here are the five:
1. Make it easy to bill
There are many steps in the lifecycle of a project. Billing is just one of them, as part of the flow.
That’s the best way of thinking about it. Billing shouldn’t be a scary epic production: it should be just another natural step, triggered by such things as reaching a pre-set milestone or date.
Best of all, you can set the system to automatically act when a milestone is reached or automatically prompt you so you don’t forget. Either way, any changes to the project are reflected in the billing without you having to dig for them.
Another reassurance is to run a Work In Progress report to satisfy yourself that no costs go unbilled.
All project-specific content is automatically prompted, so descriptions and explanations only ever need keying in once. VAT rates, multi-currency data and Nominal codes are also handled by the system.
2. Bill early
Late invoices don’t get paid on time, hurting cash flow and damaging your company.
It’s frustrating for those responsible because every month is a predictable crunch time. Invoices need calculating, assessing and verifying before being sent out, and complications can abound in any project-based business, whether you’re a creative agency, an engineering consultancy or a professional service firm.
But does it have to be so difficult?
No. The right system would substantially speed up the process. System-based invoicing is one of those tasks that can benefit companies considerably. We’ve seen businesses previously struggling with stressful bottlenecks get the invoicing task down to a day or two of calmness and clarity, and with greatly reduced errors in the bargain. Month-end billing needn’t be dreaded any more.
But why wait until the end of the month anyway? If a project ends in week 2, why not send it then?
Once you can create invoices quickly and easily, you are in a position to experiment with the timing. Some businesses swear that sending out digital invoices at 8am on the first day of the month speeds up payment by 3 to 5 days. Others say that early on Monday morning has worked the best time for them. A smart system gives you the luxury of being in control and able to try different approaches.
3. Bill clearly and accurately
Don’t create excuses for customers not to pay. Unclear or inaccurate billing is the best excuse of them all for them to delay payment. Suddenly it’s not the customer in the hot seat, it’s you.
Clarity and accuracy are longed for in any business. Achieve those, and you’re saving time for your team members, making your customers happier, reducing queries and letting everyone get on with their job.
4. Bill with identity
Your smart system should allow you to brand your invoices.
There is good evidence that a branded invoice is taken more seriously and is paid faster. It certainly enhances customer perception.
Invoices should be able to be sent as a PDF attachment to an email, or as a printed document, or via OB10 electronically.
5. Bill intelligently
Look for these additional benefits from a smart project billing system:
- Logical prompting and handling of information throughout the entire journey: from estimation, quotation, job set-up, progress tracking and invoicing, right through to links to your accounts system.
- Flexibility to allow you to invoice based on either billing plans or incurred costs.
- Automation to handle many elements such as recurring fees where appropriate and the creation of overdue invoice reminders.
- A smart invoice approval process to help smooth the invoice’s passage from end to end.
- The handling of multiple jobs on one invoice.
- The power to pull together all time, costs, expenses, purchases, scheduling, progress-tracking and billing into one combined system in real-time.
- The ability to allow team members to see and enter data remotely, by web browser and by iPhone or Android. Everybody always sees the most up-to-date information wherever they are.
- Avoidance of anything having to be entered twice.
In summary, smart billing isn’t a stand-alone task. You need a powerful system to pull everything together to achieve all the above. But the results can be remarkable, on three main areas:
- Improved profitability
- Improved cash flow
- Reduced time spent preparing, checking and hunting for information
The Managing Director of one creative agency told us:
“Previously we would have spent the equivalent of 10 working days just creating the individual client invoices.
Today the same job can be completed by one person in less than a day.”