Billing and invoicing are two of the most common everyday tasks in professional services. They’re also some of the most infuriating.
Efficient billing processes are one of the bedrocks of a profitable business. Especially in this industry, you can’t keep your customers waiting – so getting their invoices out to them as quickly as possible is paramount.
As with many other areas, technology is transforming the way businesses approach their billing practices. In this blog post, we’ll discuss the challenges of billing in professional services, and how software has been created to make the process easier.
Understanding the Challenges of Billing in Professional Services
Professional services firms are in a unique position when it comes to their billing. As they’re usually business-to-business companies, they have to track timelines for many projects. What’s more, these companies can all want completely different things.
Even with the best people on the team, you can’t expect every aspect of the process to be perfect. Humans make mistakes – and studies have shown that the typical small business pays 450 invoices a month with a 1.29% duplication rate. That’s about six duplicate invoices a month – and though this isn’t a lot on its own, the costs soon pile up.
The Rise of Professional Services Software
This is why having a streamlined billing system is important. It can kill two birds with one stone, improving productivity and accuracy. Professional Services has developed many pieces of software to work in its industry specifically. Handily, this is known as Professional Services Automation software or PSA.
These often come equipped to do almost everything – from calendar management to expense tracking.
In terms of billing and invoicing, here are the features you should know about:
- Time Tracking
- Project-Based Billing
- Expense Tracking and Reimbursement
- Customisable Invoice Templates
- Reporting and Analytics
It’s also worth noting that most PSA software now integrates with existing accounting software. This means you won’t have to deal with the headaches of moving across lots of data.
The Benefits of Professional Services Software
Of course, this isn’t the only benefit companies get from using PSA software.
A. Improved Time Tracking and Accuracy
In every business, time is money. Nowhere is that truer than in professional services, where billable hours are a key metric in how and when people get paid. Software can fully automate this – doing away with cumbersome spreadsheets for staff. And there’s evidence for its effectiveness: in a 2017 survey by Service Performance Insight of 68 global businesses, 12% reported an increase in on-time projects from using PSA software.
B. Streamlined Invoicing Process
The same is true for invoicing. PSA software automates the invoicing process; you don’t even have to think about clicking a button to make the document. Thus, the time you would’ve spent putting together the invoice can go to improving connections with your clients. Speaking of which…
C. Enhanced Client Communication
We’ve all experienced miscommunication with our customers. At best it’s a slight annoyance; at worst, it can throw off the timeline of a whole project. Software-generated invoices sidestep this issue. Invoices are as clear and detailed as your client needs, and they’re also sure to be in the same format every time. This improves both transparency and trust – two things every business should be striving for.
D. Real-Time Reporting and Insights
Like any business, those in professional services need real-time data. It’s a gateway to actionable insight, and as such, it’s invaluable.
Again, PSA software automates this process. So, instead of having to trawl through hundreds of spreadsheets, you can press a button and the software generates a report for you. Another advantage of it over spreadsheets is the fact that reports can be role-based. So, your Finance and HR teams can get reports specifically tailored to them. In an industry where business diversity is the order of the day, this can be a game changer.
Overcoming Implementation Challenges
No new software is without its challenges, and PSA software is no exception. To ensure the best chance of your team and shareholders accepting the software, you should carefully consider not just the features but also the user experience.
What is the interface like? How will it link to the system I already have? How does it display information? This is what will influence user adoption on a daily basis and decrease lingering resistance to the change.
It goes without saying, but you should also make sure to choose a reputable vendor for the software. They can offer your employees – and you! – support when you need it.
To overcome challenges after you make a decision on software, you could consider:
- Offering comprehensive training to all employees who will be using the software
- Pilot testing with a small number of employees or projects before going live, allowing for feedback on potential issues
- A phased implementation, focusing on specific modules and allowing employees to adapt
Technology hasn’t changed the values at the core of professional services. Companies are still looking to provide services with trusted expertise. But what technology like PSA software is doing is helping those companies provide those same services in a way that’s more efficient, profitable, and informed.
PKF Smith Cooper Systems are experts in helping professional services companies get the most out of their technology.
Contact us on 01332 959008 or use the enquiry form.
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