Professional Services firms need accurate billing to ensure on time invoice generation and avoid invoice rejections. Invoice accuracy is also important to keep clients happy.
Confusion on billing and time tracking of consultants for each project creates internal inefficiencies and rework due to invoice rejections. This results in lower profit margins and increased client churn.
The nature of Professional Services industry is such that the needs of each project are different, and this affects billing. It is also a challenge to standardize processes, which is why a billing software helps.
Standardized processes in billing make it easier to generate invoices, automate processes, and reduce the risk of human error. The automation also gives clients confidence in the numbers and reduces the chances of invoice rejections.
However, not all billing software are the same. It helps to understand what the specific needs of your business are and then match that with the features of the billing software available.
Features to look for in a Professional Services billing software
A good billing software for Professional Services should have the following capabilities:
- Standardized invoice templates with the ability to also generate custom invoices
- Automate the generation of routine invoices such as monthly subscription amounts due, etc.
- Check financial health of each project in terms of amounts paid on time and overdue details
- Get a 3600 view of each client with alerts when the amounts due exceed preset deadlines
- Estimate and forecast which client will pay when to manage cashflows
- Identify which projects are facing multiple invoice rejections or late payments
- Track projects and client payment history across the business from a unified dashboard with the drilldown option to check by region, business vertical, etc.
- Automate tax calculations that is localized to each region in which your business operates
- Access data securely from anywhere and any device
- Setup multiple revenue recognition methods
- Work with multiple currencies with the ability to view a consolidated report or multi-currency reporting
- Connect with the bank for visibility on actuals
Most billing software have identical features, but there are a few that offer more advanced capabilities. The question you need to ask is which of those advanced features does your business need and how they will help you achieve your specific business outcomes.
How to choose a billing software for Professional Services
Professional Services firms have specific needs and even within the industry, certain businesses have certain criteria and nomenclature they use. Law firms, for example, have a standard practice of billing six minutes at a time and their client engagements are called “matters” instead of “projects” in other project-based businesses. A billing software should be able to take into account such unique requirements and offer other options such as:
- Real time visibility on the finances with bank account integration
- Advanced business intelligence that not only shows users ‘what is’ but also suggests what they should do
- Comply with tax and accounting requirements in different regions
- Ability to create custom ad-hoc reports and analyze the data based on custom parameters
Over the years billing software has evolved and there are many features that can help meet your immediate needs. However, growing businesses will find individual solutions that are implemented for specific tasks may not be the best option in the long run. That is why businesses are choosing a more advanced and integrated solution like Professional Services Automation that offers end-to-end capabilities for the entire project lifecycle; it can do much more when integrated with your existing solutions like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Human Capital Management (HCM).
Go beyond basic billing software with Professional Services Automation
A billing software can help you manage that specific component of the business process. However, a more advanced solution like Professional Services Automation that offers the classic features of a billing software and so much more will help future-proof your business.
A Professional Services Automation tool is an integrated solution that helps you gain visibility on existing workforce, their availability, and relevant skills. It also helps in project allocation, monitoring, billing, and more.
There are also more advanced solutions like evergreen that go beyond what regular Professional Services Automation tools offer.
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