A few years ago, Sweden was in the headlines for experimenting with a six-hour workday.
It’s a scenario in every professional services firm across the globe. Managers review how consultants have spent their time over the last workweek or month, so that they can approve the time and expenses, understand project profitability and process the invoice to the client.
Sounds straightforward – but in reality it is often one of the most frustrating tasks for any professional services agency. I’ve seen and heard the feedback from countless firms over the years – hours worked are frequently missing in timesheets or worse – the data is significantly inaccurate. It’s no surprise that revenue leakage is the biggest challenge in the professional services industry, but there are six key ways to minimize lost revenue from taking a hold of your business.
Minimize time needed on administrative tasks.
In the era of cloud computing, paper-based methods of tracking time, or using siloed spreadsheets have passed their prime. People are happier when they can reduce the amount of time spent doing highly administrative tasks, so simplify the process and give them one system to easily enter, review, approve and process time and expenses across different projects.
Be diligent in when and how frequently information is captured.
Let’s face it – there are a lot of things that people need to get done each day, and in many cases time and expense management falls to the bottom of the list. Don’t make the process difficult and ensure that even when work gets busy, there are clear guidelines and automated reminders sent to employees so that the data is in when you need it. Ideally, you want to have people form the habit of entering by the end of the day to minimize inaccuracies.
Provide clear details on costs and expenses to ensure adequate invoicing.
Capturing time and expense data is important, but so is knowing the details behind this data. All professional services firms have encountered a client who wants to clarify the cost of a project, and for a firm to maintain profitability they also need to negotiate resources and costs against scope. Similarly, managers can better manage their teams if they understand what they are working on, and if they need more support. The greater the insights, the more transparent and smoother the discussion.
Track status in real-time.
Keeping track of project profitability and delivery is like driving from one city to another. Sure, you may know the general direction of where to go, but wouldn’t it be more efficient if you knew the route before you started the car? Nobody likes surprises – particularly if it’s news about overruns, delays or other project hiccups, so the ideal solution should be integrated with other systems to give you a better understanding of resources, costs, status in real-time. That way, if you’re headed in a less efficient direction, you can reset in an instant.
Maximize your team resources.
Managing teams with different billing rates, utilization rates and across different projects is hard. On one hand you want to match projects to the right skills and experience to keep satisfy your clients and motivate your employees, but on the other hand you want to stay in control of resources and costs without micromanaging the process. Keep your teams focused on the right work by implementing easy-to-use software to enter time and expenses, and giving you a one-click view of the information so that you can reallocate resources across projects as needed.
Quicken the billing cycle.
According to the Aberdeen Group, long cycle times processing invoices can cause revenue leakages of up to five percent of the transaction value. Identify the easiest way for time and expenses to transfer to your accounts payable team so you minimize the chances of human error, lags in invoicing or even bad debt.
Most systems of capturing and billing time, expenses and related costs are more complex than necessary. Whether it’s using manual processes, spreadsheets or a variety of tools, the more disparate the data the higher the administrative burden and chance of human error. In the fast paced professional services industry, a centralized system to capture all time, project and resource-related data is intrinsic to the business. We’ve found that it can reduce administrative time by as much as 90 percent, and reduce hours spent by employees to capture the data to a tenth of the time. For more information on how our customers have improved client billing, check out our case studies here.