A few years ago, Sweden was in the headlines for experimenting with a six-hour workday.
Time cards offer a better alternative to labor-intensive methods of time tracking such as ledgers and spreadsheets. However, they are not invincible. Unless you have a proper process in place to calculate time cards, chances are that you will face issues in one or more areas such as client billing.
Why Client Billing Delays Must be Addressed
Most organizations have processes in place to ensure that their clients are billed on time and ensure timely payments. It is a simple fact that the faster you send out your invoices, the faster you are likely to be paid. Invoicing delays are always a concern and these delays mean that clients become incapable of paying on time, even if they would normally do so. The inefficiency in billing ends up affecting the organization’s cash flow and hindering its profitability and growth.
To avoid such a situation, it is imperative for organizations to focus on getting their invoices out the door at the right time. While improving billing efficiency is vital, the fault does not always lie with the accounting department. Indeed, in many cases, the issue can be traced back to faulty time tracking.
Solving Billing Delays with a Time Card Calculator
Time cards offer a low cost method to tracking the work hours of your employees. They can capture not only regular work hours but also overtime and meal breaks if needed. Using that information, organizations can quickly calculate the number of hours worked and determine the wages. Additionally, the time data captured can also be leveraged to calculate the hours spent on a project and use that information to drive billing and invoicing. However, to use that data, it is a good idea to leverage a time card calculator, as seen in the examples below.
Eliminate Incorrect Invoicing
However, calculating those hours manually requires considerable time and effort and the risk of errors is high. Inaccurate calculations will result in incorrect invoices being sent out, leading to issues such as customer dissatisfaction, delays in receiving payments and extra administrative effort to rectify mistakes. All of these can be avoided by leveraging a time card calculator. As these calculators can perform the calculations correctly, you can reduce the risk of sending out incorrect invoices which can delay clients from paying their bills.
Timecards are typically filled and submitted on a weekly or fortnightly basis. However, this gives rise to the issue of bottlenecks, especially when you have a large number of employees submitting their time cards at the same time. It is a huge administrative burden to quickly and accurately calculate the hours for each time card to get the data you need for billing. Here, a time card calculator can be of benefit by taking care of the calculations for you, speeding up the process without compromising on the integrity of the data. This leads to faster invoicing that reduces delays in billing.
Best Practices for Client Billing
In addition to the above-mentioned ways to improve billing with a time card calculator, there are other best practices for client billing that you can implement. Here are some of them.
Automate Wherever Possible
By automating your billing process, you eliminate a massive potential for human error while also saving money by reducing extra administrative costs. Using a time card calculator is a step in the right direction. In the long-run, automation will save you considerable time and effort in both accounts payable and receivable.
Track All Expenses
There may be additional expenses as part of certain projects related to travel, equipment etc. It is important to track all of these expenses as they occur so as to include them in the invoice. Have a mechanism in place to identify these expenses and verify their legitimacy and accuracy. Ask employees to submit receipts with those expenses to have the necessary documentation to support your invoices. It may also be a good idea to establish an upper limit for certain project expenses such as travel and food or you may have some explaining to do when you send out the invoices.
Streamline Time Tracking
Time tracking is one of the biggest areas for potential billing leakages if left unchecked. Time cards must be filled correctly and submitted on time but many employees fail to do either. Therefore, organizations must implement a time tracking system that streamlines the process and makes it easier for time cards to be submitted on time and accurately.
Review Sent Invoices Regularly
Another common reason behind billing leakage is faulty invoicing practices. Implement a centralized system for tracking and managing all invoices to make it easier to review regularly. Develop a mechanism to follow up on invoices whose payments are still outstanding. Remember that a longer billing cycle means your cash flow can be throttled. Therefore, get the invoices out on time and don’t let dues remain pending for more than what is necessary. A centralized system will also make it easier to send out reminders for payments and track them as required.
Delayed client billing can be the result of several factors but time tracking does play a critical role. Manual methods of calculating time cards are no longer a viable option for organizations looking to streamline their billing process. A time card calculator can be the first step towards modernizing your time tracking system and improving your billing process.