Accounting Time and Billing Software FAQ: Should the Partner do the Billing?
The Traditional Approach to Time and Billing Software
Effective use of time and billing software should always involve the billing partner for best results. Many accounting firms follow traditional billing patterns. For example, (1.) the distribution of detailed work in progress reports to the individual partners or owner as the first step in the billing process. (2.) the partners or owner analyze the work in progress reports and sometimes request copies of prior invoices, or analysis reports to determine client profitability or delinquency.
(3.) The partners or owner make notes and billing instructions on the work in progress reports and return them to the administrative staff for invoice preparation. (4.) Drafts of invoices are printed and (5.) submitted to the partners or owner for review and changes. (6.) Corrections and edits to the invoices are made by the staff. (7.) Partners or owners perform a final review of the edits and changes. (8.) The invoices are mailed or emailed to the clients.
The whole process takes at least eight steps and can be very time-consuming involving a significant amount of redundant effort.
“New Age” Time and Billing Software
Today many practitioners demand that time and billing software allow them to directly access their work in progress and prepare invoices from their workstation. The most obvious savings are the elimination of the middleman or administrative staff which reduces the overall time spent preparing client invoices.
Furthermore, the partner or owner is working directly with the data. Eliminate unnecessary edits or drafts: just review the text and amounts and mail the invoice. Oftentimes, the owner when working directly with the data in this manner will think of additional opportunities for value billing, or better ways to express the service. It’s more difficult for the administrative assistant to ‘get it right’ when expressing the nature of the service from written notes on a copy of the work in progress report. An owner can oftentimes better discern the most appropriate vernacular for a client invoice because of the direct personal relationship.
In situations where partners prepare their own invoices, the firm might have some procedure they follow for accountability. For example, invoiced realization reports that show amounts billed compared to slips at standard rates. Also, aging of total unbilled work in progress by partner reveals situations that require further attention by firm management. Partners not involved with invoice preparation should review both invoices and pending invoice reports before final posting.
Of course in certain cases, such as fixed-fee recurring, monthly bills, it may not be necessary to involve the partner. Administrative staff should handle any repetitive process not requiring significant alterations.
At a minimum, your billing system’s work in progress report should display the comprehensive information necessary for invoice preparation. It’s a waste to time for staff to search files for last months supporting documents and invoice copies. In addition to the showing time entries, the work in progress report should provide prior invoice information. It should also show current year write-ups, write-downs as well as account receivable aging information. Mango software generated the following work in progress report:
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