Even today, the issues related to time management and therefore, billing, of the service enterprise are one of the main obstacles to their growth and profitability. The fact is that many companies are struggling to bill their customers properly, which has a direct negative impact on their EBITDA at the end of the month.
And contrary to the promises of reputable suppliers, even with a good ERP, project billing for service companies often remains a crucial issue for their profitability. More precisely, managers do not have a clear and detailed vision of the time and expenses carried out within the framework of their projects, hence the billing problem.
What are the main billing issues for the Service Enterprise?
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Loss of hours worked for the Service Company
For many companies, the problem is very basic: not all hours worked on a project, and therefore billable, are billed. It’s as simple as that. It’s that simple.
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Difficulty in billing at the right hourly rate according to different criteria:
- Client
- Project
- Task performed
- Resource used
Although it seems obvious, the task of automating this process is more complex than it seems and thus, a good part of the invoicing becomes a manual task with all the risks of error and waste of time for the manager.
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Difficulty in correctly invoicing expenses related to a project or a time sheet. Examples of expenses:
- supplies
- ravel and catering expenses
- equipments
- software used
- rental fees
- etc.
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Too many steps and manual work during invoicing (hello Excel users)
Several studies have shown the cost of the poor performance of in-house software for the Service Company; what is commonly referred to today as technological debt.
Many managers mistakenly believe that using an Excel file for invoicing costs them nothing, when in fact they fail to take into account the losses due to errors related to the manipulation and rewriting of time and expense data and the losses due to direct omissions in time and expense entries.
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Difficulty in transferring the billing summary to the accounting system
There is no doubt that outdated software is extremely costly to companies in terms of user productivity. Studies show that one of the main causes of billing losses for the service enterprise is due to their incompatibility or poor integration with the accounting system.
One can easily imagine the time wasted by valuable resources manually entering time and expense data into the accounting system or trying to confirm or validate manually entered project costs and expenses in the accounting system… somewhere, in a file of some sort.
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Difficulty keeping track of hours billed to clients
Considering that for service companies, THE main source of revenue is billable time and THE biggest expense is its resources, regardless of the size and maturity of the organization, it would be to the organization’s advantage to equip itself with a timesheet and billing system that will be able to respond to the above-mentioned problems by automating the process of time management and project billing.
Especially since there is a great loss of business intelligence in terms of analyzing the productivity of resources in their projects and the expenses incurred by type of project, for example.
Main Benefits of Adaptive Billing for the Service Enterprise
Consequently, we can easily conclude the main benefits of an adaptive billing and time management software for the service company; namely:
- Facilitate Project Expense Management
- Ensure profitable billing of projects and clients
- Increase the profitability of projects, based on Business Intelligence
Indeed, if your Timesheet and Billing software is well integrated to your operations; if it allows the direct integration of time and expenses and their export to your billing software; then your managers will be able to quickly see if a project is profitable or not.
Conclusion
A winning combination for the manager and the company
For the manager, the happy tune consists of being able to easily account for the hours worked plus the expenses incurred for each project and to be able to invoice everything easily and quickly.
It is important to remember that the minimal expense of subscribing to a timesheet and invoicing software will very quickly have a direct impact on the profitability of the service company.