The stability and success of any services organization like IT services or engineering services depends on maintaining a strong cash flow. An effective billing management strategy is a critical part of it. Simply having a billing process is not enough. Enterprise leaders must have a progressive outlook and constantly be on the lookout for the best billing practices and solutions for their organizations.
Why Should You Upgrade to Better Client Billing Processes?
It is not uncommon for business owners to put concerns about their client billing processes on the backburner to focus on other more pressing matters like service delivery or even solution selling. Unfortunately, poor billing practices can lead to critical issues such as extending credit to clients or failing to investigate past-due accounts on time. These problems inadvertently cause a ripple effect on not only the finances of the company but also its time and productivity. The good news is that these problems are easily remedied by streamlining processes to bill a client.
You may not immediately notice the benefits of following proper billing practices but they can drastically improve quite a few areas of business. IT and engineering services firms can stop letting their valuable limited capital be wasted, leading to an improvement in their liquidity. These firms can start focusing on growth instead of their costs and debt. Of course, it also puts them in a stronger position to outperform their competitors.
Here are four effective client billing practices that your IT or engineering firm can leverage to strengthen its financial footing, along with advice from some companies that are putting these practices into place themselves.
1. Automate the Billing Process
Automation can make life much easier for any IT or engineering firm when it comes to client billing. Billing automation does more than just make your billing process faster. It can automatically help compile all costs, expenses, or billable time and use that information to generate invoices. Manual methods like paper forms and spreadsheets are highly prone to errors like incorrect or double entries. With automation, you will require less manpower to track and calculate quotes, which also reduces the possibility of human error. That not only saves time and effort in ensuring accuracy but will also save you money.
With automated project time billing software like Replicon, you get access to a range of automation features that powers up your client billing processes. Here are some of them.
- You can automate your reminders for overdue invoices so that you don’t need to remember to send them out. Replicon automatically tracks and sends out reminders to the relevant stakeholders at set intervals.
- All invoices can be processed online by Replicon’s systems so that you can track their status.
- Replicon’s powerful automated time tracking system allows you to accurately track all billable hours for correctly invoicing your clients with minimum fuss.
- You also gain the ability to create invoices exactly as needed, be it fixed-bid or billable time. You can even add expenses and materials as and when they occur automatically when generating invoices.
2. Choose Cloud-based Software
These days, IT and engineering businesses need accessibility and flexibility to achieve success. Manual systems like paper or spreadsheets do not offer such privileges and relying on those systems only holds your organization back.
Tom Winter, the CRO and Co-founder of DevSkiller, an automated technical screening and talent management platform, agrees that cloud software is essential.
“Make the most out of cloud-based software: you have zero excuses to still be billing with manual systems, make the most out of the technology available! With cloud-based software, you can keep precise track of the invoice you’ve sent, if they’ve been received, etc. You can also access the data from anywhere you are, and you won’t have to worry about losing track of anything.”
For engineering and IT firms, which pride themselves in being ahead of the curve in terms of technology, the lack of a cloud-based system for billing should be an area of immediate concern. A cloud-based system like Replicon can help you accomplish several tasks easily and efficiently such as tracking and sending invoices. At the same time, it enables you to get a real-time overview of all billables, eliminating the possibility of dated data. Of course, this information will be accessible to all authorized personnel such as account managers or project managers.
Considering the rising adoption of the work-from-anywhere mantra, especially in the IT industry, organizations will find cloud-based systems to be immensely helpful. No matter where your employees choose to work from, they can still access the system and monitor the accounts. Since Replicon’s cloud-based system can also track time anywhere, your entire organization can work remotely and your billable hours data will still be accurate and ready for invoicing.
Replicon’s cloud-based platform offers an incredible 99.9 percent uptime guarantee, which ensures that you will almost always have access to the latest data from across your organization. Of course, there will be no worries about losing any of your data. This also ensures that you always have up-to-date data for meeting tax audits, disputes, and insurance claims needs.
3. Improve Client Transparency
In the IT and engineering industries, cost overrun is a serious and common problem as a result of project management issues such as scope creep and lack of visibility into project metrics. No matter the reason, the end result is often an unhappy client who is presented with a larger than estimated bill. Unless the organization is able to accurately show where the costs come from, client disputes are a possibility, leading to a strained relationship and even delays in payments.
Arthur Linuma, Co-founder and President of ISBX, a software development and consulting agency that serves global brand including Apple, Nike, L’Oreal, Warner Brothers, Lexus, and Red Bull, believes that transparency in billing is vital:
“You should always be clear and transparent with your billing. Make sure your clients know exactly what to expect and avoid hidden surprises. Be specific about what work you are charging for and if you are giving clients a discount on certain items, make sure to state what they are. Break down the hours and fees for each stage of your work. Lastly, set clear boundaries about your payment terms and any fees for late payment.”
Replicon helps you do all of this and more. With its advanced time tracking capabilities, Replicon ensures that you capture all billable time accurately. Configurable validation rules help verify all time and expense data. Flexible approval workflows ensure all stakeholders are kept informed while they sign off on timesheets and expenses. Once approved, Replicon automatically uses the data to calculate billable hours and expenses for invoicing, eliminating human error. Moreover, all approvals are tracked by the system resulting in an audit trail.
Replicon also provides comprehensive invoicing capabilities to ensure all billables are clearly mentioned on invoices. You can set billing rates and other costs to be automatically calculated and entered into the invoices. These rates will be clearly mentioned on invoices to ensure transparency. You also have the option of adding any extra line items, such as discounts, with details to let clients know what they are. If any dispute arises, you will have all the data that you need to back up your claims along with a complete audit trail.
4. Ensure Timely Invoicing
A major challenge for IT and engineering firms is ensuring a stable influx of cash. Without money coming in, these firms will need to start paying for salaries, subcontractors, vendors, materials, and other expenses out of their own pockets. Larger firms with sizable cash reserves and access to bank loans may be able to tide over a delay in getting payment from clients. However, that is simply taking on another debt that they do not need. That is why it becomes imperative that IT and engineering firms ensure that they get paid on time.
“When you invoice your clients you are practically handing them out a rate free loan. When we launched our service we did invoices once a month with a 14-day payment term. What this did was that it gave some of our clients up to 45 days to pay for our service.”
If using manual methods, chances are that you are spending a lot of hours and effort into creating invoices and sending them out. With Replicon, you can cut down those hours into a matter of minutes. After all, Replicon does most of the work for you by automating the tracking and calculation of all billables. In just a few minutes with a few clicks, you can have an invoice ready to be mailed. Since all data is verified with validation rules and approval workflows, there is no need to spend extra time checking the numbers.
Tom Winter from DevSkiller agrees that manual invoices are cumbersome: “Forget about physical invoices. It is easier to track down the whole invoice process when it is delivered via email, and you can also customize the time so the invoice arrives at the best financial moment for your client.”
Replicon also makes it easy to model client billing rates as per your invoicing needs. Hourly, daily, weekly, or monthly rates can be easily modeled into the system to capture all data at the required level. This enables you to adhere to any payment contract periods that you have agreed upon with clients. For IT firms, which have a wide variety of project contracts to deal with, this can be massively helpful.
Since IT and engineering firms often work with international clients, getting paid in the right currency is vital. Again, Replicon ensures that you are billing with the right currency thanks to its multi-currency support for a global client base.
Meeting Your Client Billing Needs
IT and engineering firms experience some unique cases around their client billing processes due to the nature of their business. Serving a global client base while ensuring timely payments can be a challenge but it is a challenge that Replicon can solve.
Configurable timesheets can intuitively capture billable and non-billable hours across projects while assigning those projects to one or more clients for easier billing. Digital receipts and attachments ensure you have the proof you need to claim on expenses and materials. You get enhanced validations and notifications that help reduce client billing errors down to zero. Replicon also helps you track and deliver projects in real time while keeping all stakeholders informed of progress. Moreover, Replicon’s flexible billing options and enhanced invoicing capabilities help you make your client billing processes more efficient and productive. With advanced analytics, you can make data-driven decisions. Finally, Replicon allows you to integrate with other solutions for a more efficient ecosystem within your organization
Here are some case studies detailing how Replicon’s Project Time and Billing solution helps out firms in the IT and engineering industries.
Want to learn more about how Replicon’s solutions can help your organization streamline its processes as it navigates the modern challenges of a global, mobile, and remote workforce? Check out some of our free webinars!