No matter the size professional firm, time and billing is an application crucial to achieving profitability. To earn money, you must collect fees, to collect fees you must bill, to bill you must capture time. Simply stated, lost hours result in lost fees. As your firm gets bigger, more importance is placed on business intelligence regarding utilization, realization and optimization-all key measurements of staff productivity. But simply choosing the right time and billing solution is not a guarantee of a successful outcome.
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After several years of evaluating time and billing solutions from a reviewer's perspective, I was fortunate recently to gain some very valuable insider insight regarding how professional service firms operate in reality, succeeding (or not) with their current time and billing solution. Two separate instances gave me an intriguing perspective on the typical issues firms deal with when deploying this application.
I once worked with a financial services firm whose management was frustrated with the firm's time and billing software and sought my advice on a replacement. They complained about the application's inability to capture and generate meaningful management information. I quickly concluded that the problem was not a lack of features but rather a lack of knowledge in using them. The application was more than capable of gathering and generating the information needed, but the staff had never received formal training, and were not capable of using the product properly.
The second incident concerns a conversation I had with a project management firm, whose primary worry was that its employees were not recording all of their billable hours. The consequence? Lost revenue.
Management estimated that if each the firm's 10 billable employees failed to record just one quarter hour of billable time per day, at an average billing rate of $175 per hour, over the course of a year approximately $100,000 of unbilled time would be accumulated. Employees recorded their hours for the previous week on Monday mornings. Imagine waiting until the following Monday and trying to reconstruct an entire week of time.
Time and billing vendors can tout their applications' features and functions, but the ultimate success of implementing time and billing software depends as much on creating and maintaining an employee environment of awareness and diligence as it does on selecting the right vendor. System administrators and management must receive adequate training to properly set up the system and understand its analytics. Timekeepers must be encouraged to enter billable hours as they occur, and given a convenient means to do so. You should spend as much effort in creating an environment of compliance as you do in evaluating the right time and billing solution.
During the course of your evaluation, you need to consider that the software must accommodate the needs of two distinct sets of users. Administrators and executives want robust and flexible setup options and reporting. But timekeepers care more about how quickly they can get in and out of time-entry screens. Cumbersome and numerous data-entry screens will only deter compliance, resulting in lost billable hours. Convenience will ensure compliance, if users are provided multiple time input options, including remote, Internet and mobile devices.
Evaluating time and billing software is made easier by the caliber of solutions that are available. Though they do vary considerably in look and feel, most are robust enough to accommodate even the most demanding of both sets of users' requirements. Consider the following criteria carefully as you initiate your search and narrow down your choices.
Flexibility. First and foremost, a time and billing system must accommodate a wide range of billing types and report formats. Since external invoices are produced for payment by a firm's clients, the layout must often accommodate a specific style.
Reports must also be flexible and able to provide meaningful information from which decisions can be made. The majority of this information will concern staff utilization, which translates into firm profitability. Other reports might provide market segmentation, defining which types of clients are most profitable. And collection reports are critical to stay on top of delinquent accounts and monitor write-offs. Therefore, comprehensive standard reports and report writers that can easily customize these reports are must-have features within any time and billing solution.
Setup. Most of the time spent implementing a new time and billing system is in getting it ready for initial use by the timekeepers. As the packages reviewed below all reflect, there are numerous options and screens that define how the software will be utilized. These include demographic information, multiple billing rates by client, activity or timekeeper, default billing notes and billing templates. If considerable time and thought does not occur upfront regarding the type of output desired, then users likely will be disappointed and frustrated by the reporting output.
Navigation. An efficient application must facilitate data entry by providing ease of use through custom screens and shortcuts. This is especially important for the timekeepers who want to minimize their interaction with the system to just a few minutes daily. To facilitate this further, remote time collection allows the user to immediately capture time spent on billable activities. Several of the solutions reviewed provide PDA, Internet or email options for entering time, allowing them to enter time when off site, improving significantly the likelihood of recording all time. Rarely do firms today rely on central timekeepers who enter time on behalf of others. The key to the success of distributed time entry is convenience, which these solutions can supply.
Interconnectivity. It is becoming increasingly common for multiple applications to share a subset of similar data. Time and billing systems need to integrate with calendaring and productivity applications to minimize the inefficiency of redundant data entry. Interfaces to Microsoft Outlook, Excel and Word provide a means of accomplishing this as do connections to other time and billing and practice management programs. Successful products today begin to blur the lines between where one application begins and the other ends.
What does the future hold for time and billing applications? Look for increased remote time collection options and reporting flexibility. Only by continuing to offer new and faster methods of capturing time remotely, and expanded ways of analyzing this information once collected, will firms really reap the benefit. And to ensure success, spend the proper time educating employees on how to use the system. Although not a billable activity, adequate training will result in significantly higher employee compliance and ultimately time and billing success.
Billing Matters, a time and billing solution with a legal bias, adapts well for use by accounting firms. It offers many features beyond basic time and billing, like document and calendar management.
Setup is quite time consuming, but the end result is well worth the effort. Additional features include calendaring, online research and document management. Navigators are available to access many different screens and can be customized for specific use. Keyboard accelerators also facilitate navigation as do customizable toolbars. Initial setup data includes creating staff and resources, users, classification codes, contacts and matters. Work saving features include autoentry forms, timetables, special dates and group scheduling.
Billing Matters uses lists to display its various record types. These serve as the starting point for locating, adding, viewing, editing and deleting records. Quicktabs appear along the top of lists and provide easy access to different combinations of filters and views of the current list. Power views display record details for previewing. Customization capability of forms and windows is extensive. Triggers can be set up to create messages notifying staff when certain events occur.
The setup wizard allows the entry of multiple billing methods, staff rates and payment terms. Rate tables can be assigned to staff, billing codes or clients. Billing methods include contract billing, matter billing and a combination of both. Billing preference templates can be created and used for multiple clients. Time and expense entries originate from quick items, timesheets or billing item forms. Pre-bills provide detailed billing information for review by staff prior to actual invoice creation.
The Bill Flow Manager allows viewing of all time-and-expense entries, transactions and client funds and printing of pre-bill reports and client billing history. Reports are numerous and are categorized by billing, transactions, staff and financial. Billing reports include aged accounts receivable and WIP amounts, productivity, profitability and timesheet reports. The report designer allows for custom reports
LexisNexis Time Matters Software
Price: Professional, $350; $200 (each additional user). Enterprise (SQL); $715; $400 (each additional user).
BillQuick provides time tracking, billing and project management functionality in a time and billing application that is a good fit for any size business.
The startup wizard assistant facilitates set-up of new company files. The BillQuick company navigator screen provides multiple-icon access to frequent tasks, including clients, projects, employees, activities, invoices and payments. The screen also serves as a dashboard, displaying key metrics like cash flow, recent reports printed and workflow steps.