No, time-based invoicing isn’t just for lawyers!
Agencies, consulting firms and service companies (architects, IT services companies, design offices…) spend 10 to 30% of their total time creating, following up on and communicating about current and future invoices.
Between managing administrative tasks, tracking billable hours and issuing invoices, it’s easy to feel overwhelmed. The right balance has to be struck between a firm reminder at the right time, good communication between the operational and accounting teams, and the choice of automation, which can free you from many constraints.
What are today’s challenges, and how can you overcome them? Let’s take a look at how you can spend less time billing by the hour.
Why is time billing a challenge?
Time billing is often seen as a chore by teams, but it also raises crucial questions:
- How can you ensure accurate, transparent billing for your customers and staff?
- How can you prevent the invoicing process from becoming a source of stress for your teams?
- How do traditional billing methods affect productivity and morale?
Time-based invoicing can lead to :
- A loss of motivation among staff, who feel under pressure.
- Errors or omissions in the calculation of hours, which can lead to financial losses for the company.
- Administrative complications that consume precious time, to the detriment of strategic missions.
Negative impact on team motivation
When employees spend more time accounting and invoicing than performing their core tasks, it can have a demoralizing effect. This feeling of frustration is often linked to the impression of wasting time on administrative tasks rather than contributing directly to the success of the customer or project.
A common example is that of freelancers who, although accustomed to managing their own invoicing, may feel overwhelmed by the constant need to keep meticulous track of their billable hours. This stress can distract them from their core missions, adversely affecting the quality of the work delivered and, ultimately, customer satisfaction.
The financial risks of incorrect invoicing
Billing errors can have serious financial consequences. A misapplied average daily rate (ADR) or missed hours can result in substantial loss of revenue. In addition, late or incorrect invoicing can delay payments, affecting the company’s cash flow and jeopardizing profitability.
— The impact of poorly managed invoicing in an ESN
Let’s take the example of an ESN (Entreprise de Services du Numérique) that invoices its customers on a fixed-price basis.
If the hours worked are not accurately tracked, or if additional tasks are carried out without adjusting the fixed price, the company can find itself losing money on every project. Worse still, if these errors are not detected in time, they can damage the relationship with the customer and jeopardize future assignments.
What are the alternative methods?
Flat-rate billing: simplicity and predictability
Flat-rate invoicing is a solution often adopted by consulting firms, freelancers and even some ESNs. Here’s why:
Cost transparency: customers know in advance how much the assignment will cost, with no surprises at the end of the month.
Time savings: no need to keep track of every minute spent on a task, which simplifies administrative management.
Accuracy: as costs are fixed in advance, the risk of errors is minimized.
— Flat-rate billing in a consulting firm
A consulting firm that adopts flat-rate billing for its assignments can offer total transparency to its customers. For example, a firm might offer a fixed price for a company audit or the implementation of a new process. The customer knows exactly what he’ll be paying, and the firm can concentrate on completing the assignment without worrying about meticulous time tracking.
- The balance of time measurement and billing at Smash, a Parisian consulting firm using the Furious tool.
Time packs and subscriptions: flexibility and loyalty
Hourly packages and subscriptions offer a degree of flexibility appreciated by customers and service providers alike:
- Anticipation of needs: customers purchase a certain number of hours to be used according to their needs, offering a degree of predictability.
- Long-term relationship: subscriptions build customer loyalty while ensuring a steady revenue stream for the company.
- Adaptability: ideal for one-off assignments or to manage peaks in activity.
— Using time packs in an ESN
In an ESN, hourly packs can be used to offer maintenance or support services. For example, a customer may purchase a 50-hour pack to be used over a three-month period for one-off interventions. This model enables the ESN to plan its resources more efficiently, while offering maximum flexibility to the customer.
— How Rébellion optimized its billing with Furious Squad
Advertising agency Rébellion – which employs some sixty people – adopted Furious as its ERP several years ago, not only to manage invoicing for its complex projects, but also for all its operations (project tracking, CRM, quotations, HR). Thanks to automation, it has been able to reduce the time spent on administrative tasks by 10%, while increasing the accuracy of invoices sent to its customers, whether inbound or outbound.
As a result, the company’s cash-flow monitoring has improved, and staff have been able to concentrate on more strategic missions.
David Aït-Ali, co-founder of Rébellion
Furious enables us to monitor both outgoing and incoming invoices very closely. Avec le système de bon de commande, les achats sont directement liés aux projets. In outgoing invoicing, our invoices are automated and our customers can sign directly using the electronic signature.
How can technology transform billing and financial management?
Automation: an invaluable ally for greater efficiency
Automating invoicing reduces errors and saves valuable time. Here are just a few concrete benefits:
- Reduced errors: by automating the calculation and issuing of invoices, you minimize the risk of human error.
- Time savings: automation lets you concentrate on more strategic tasks, freeing up time for higher value-added tasks.
- Customer satisfaction: fast, accurate invoicing improves customer relations.
— Example of the use of the Furious tool for billing automation
Furious makes invoicing child’s play. Thanks to automation, you can :
- Generate invoices at the click of a button: based on billable hours and pre-established estimates, the software enables you to issue invoices quickly and without error.
- Monitor hours worked in real time: track your projects, hours worked and associated costs in real time for optimum management of your business.
- Automatic reminders: in the event of non-payment, the software automatically sends reminders, saving you repetitive tasks.
The benefits of a clear, projected view
Having a clear, projected view of your finances thanks to technology can :
- Optimize budget management: help plan and allocate financial resources more effectively.
- Forecast cash flow: help manage costs and ensure financial stability.
- Facilitate decision-making: provide valuable financial data to inform strategic decisions.
How a consulting firm uses financial reports for better management
Pascal VanBerten, Associate Director ProgressPartners.
Today, we only use the data entered in Furious to monitor project profitability and consultant schedules. We've saved 20 to 30% on invoice management. The team hasn't grown significantly, but we manage 4 to 5 times more invoices than before.
How do you ensure accurate and fair billing?
Time-based invoicing is a delicate subject that requires special attention to maintain a healthy customer relationship and stable financial management.
Avoid common time billing errors
Time billing can be fraught with pitfalls if not managed correctly. Here are some strategies to avoid common mistakes:
- Use billing software: adopt a tool like Furious that accurately tracks the work spent on each project or assignment.
- Establish clear processes: have guidelines for time tracking and billing to ensure consistency.
- Communicate openly: ensure transparent communication with customers regarding methods and prices.
Ensure transparency and accuracy in customer billing
Transparent and accurate billing is crucial to building and maintaining trust with your customers. Here’s how you can do it:
- Itemize invoices: provide detailed invoices that clearly explain the work performed and the associated costs.
- Establish fee agreements: discuss and agree billing rates and methods in advance.
- Offer flexibility: propose various payment options and be open to discussion regarding payment terms.
— How can I find out which times have been billed?
To see which times have been invoiced or not, you can use our “unbilled time” widget in Furious Squad. This widget lets you filter by customer, contract, project, and, by checking the boxes, create invoices on the fly for work performed.
— The advantages of using invoice creation with Furious Squad
Here’s an overview of the benefits of using Furious Squad as a management tool:
- Flexibility in issuing documents: you can group together various departments and projects, and associate multiple budgets with a single file.
- Tailor-made document issuance: create personalized documents that precisely meet your company’s needs.
- Automated reminders: automatically send reminders for overdue payments, reducing the time spent on repetitive tasks.
Adopt modern methods
Spending less time on invoicing doesn’t mean neglecting accuracy or transparency. With the right tools and methods, you can :
- Optimize your work: by adopting practices that reduce the time spent on administrative tasks.
- Improve customer relations: by invoicing clearly, accurately and quickly.
- Increase profitability: by reducing errors and automating processes.
With Furious Squad, you have everything you need to manage your business efficiently and spend less time billing for time spent.
So, how can you spend less time billing for time spent?
To solve this problem and save you time, Furious lets you automatically track your teams’ time – whether or not it’s attached to a project – and generate one-click invoices based on the time spent over the selected period.
Invoices can be sent automatically, as can reminders in the event of non-payment, and of course, cut-offs are accurate and real-time.
You’ll have a clear, projected view of your agency‘s financial situation, and you’ll be able to recover your cash more quickly. These are the essential best practices of a pre-accounting tool.
So, when do you start being Furious?
