Ask five practitioners to define the term "practice management," and the chances are you'll get several different answers. Several of these would probably incorporate time and billing. To be precise, however, practice management and time and billing are related, but they aren't quite the same thing.No one knows how and why these two terms started being used interchangeably. Most likely, it's because time and billing is an integral component of practice management, and because many of the early practice management offerings on the PC were essentially time and billing applications.
That's not to say that time and billing isn't an important part of any firm's practice management strategy. There aren't many practices that have clients that send in their money without being reminded. Getting a bill out in a prompt and reasonable time is important to maintain good client relations. After all, if you can't be bothered to send a bill out until months after the services have been rendered, how can you expect the client to react quickly upon receiving it?
When revenues are not being billed and collected in a timely manner, firm cash flow can suffer, and, along with it, the practice's ability to operate.
The "time" part of time and billing, however, is what leads us into practice management. The real "product" that your firm sells is expertise. The unit of measure of this product, at least in many cases, is time spent on the client's account. Many firms, especially in the small and midsized sector, bill some or many of their clients on a monthly basis, at least for some services such as write-up. Most practices have a mix of the way that clients are billed, depending upon the services that are performed.
It's a rare practice, however, that bills out every minute of staff time. In every practice there's some unbillable time, such as time spent in staff meetings, staff development, and time that is simply wasted. Keeping track of how every member of the staff spends their time requires a fairly extensive system of record keeping, but it is a vital task.
The purpose is not to uncover the slackers in your practice, though it will certainly seem so to those staff members not putting in much of an effort. Rather, it is to uncover - and hopefully eliminate - unprofitable and time-wasting practices in the firm. Keeping accurate time records can also help you uncover clients who are not being properly billed, or engagements that are simply not profitable.
The old cliché that "time is money" is especially true when that time is what your practice is selling. It's also true that time is a non-renewable resource. Once it's wasted, there's no going back and recovering it.
Look here, look there ...
There are a couple of things to keep in mind if you decide to implement a practice management system, rather than just time and billing.
The first and most important of these is to not get too crazy about the minutes and seconds that are not being billed. While the purpose of a practice management system is to maximize resources (billable time), becoming obsessed with realization rates can be counterproductive, antagonizing your staff. Speak to any veteran of a large firm and you'll hear lots of "war stories" about how time sheets were fudged. If that's happening in your practice as a result of too much emphasis on productivity, the data you collect is worthless for making management decisions. It may also be inflated, resulting in overbilling clients. More than one firm has lost a client who felt they were being overbilled.
Workflow management is another aspect of practice management that you should be considering. With the right system, reports can show where logjams exist in handling client work, and possibly even instances of unnecessary staff handling of aspects of an engagement. Remember, one of the goals of practice management is to improve productivity.
Finally, a third area of concern in most systems is client contact and management. Workflow management and client management are often incorporated as part of a practice management system by calendaring and contact management functions built into the software, or by an interface with an external application such as Microsoft Outlook.
The devil is in the details
Most of the practice management features on the market have very similar features. That's just a result of firms having similar needs. To determine the best fit for your practice, you have to have a good feel for how your practice operates. What is the workflow and document flow in your office? How does your staff handle review and sign-offs of tasks? What are the predominant types of billing - hourly, by task, by percentage of completion? All of these need to be considered when choosing an application.
If you already have a time and billing system, and are upgrading to a practice management system, you need to ask what new functionality does your practice need that the current time and billing application isn't providing.
Reports are an important part of any practice management system. If they don't contain the data that you need to make good decisions, or if this data isn't in an easily used format, you're wasting your money, time and effort.
That's true as well in the area of timekeeping. A practice management system needs to be easily accessed by your staff, or they will be resistant to using it. Time and expenses should be able to be entered as they are spent, rather than accrued. Data is freshest when captured at the source as it happens.
This means that your practice management system should have remote timers that are able to be used without having the bulk of the application installed. Accountants are often out of their office and away from their desktop PCs when they are working. In order for your staff to be able to accurately capture time and expenses as they occur, they will need the ability to do this on a mobile device such as a PDA or laptop, or online. Fortunately, this capability is fast becoming a standard feature.
Make sure, though, that the type of devices that your staff uses are supported by the application you are considering implementing. Because the Palm was the first successful PDA on the market, some vendors have concentrated on support for this operating system, ignoring the fact that Microsoft's PocketPC operating system is just as, if not more, popular at the present time.
To give you a good idea of what is available in practice management software, we tested six popular packages. These are not the only applications out there, but serve to illustrate what is available. You won't need a supercomputer to run practice management. Our testing was accomplished on a small form-factor PC powered by an Intel Celeron D running at 2.8GHz.
In our testing, we installed the application and ran through the system using the demo client supplied by the vendor for training purposes. We added staff and clients, edited rates, and ran reports. We also tested how easy timers were to use and what options were available to extend the application.
CPAPractice Manager
Best CPA Software
CPASoftware is part of the Best Software family. This acquisition, made several years ago, has resulted in a shuffling of the vendor's lineup, with some products, such as tax prep, being dropped. The products that remain in this particular division have undergone a major freshening and updating.
That's true of CPAPractice Manager, which was formerly named Visual Practice Management. What hasn't changed about the software is that it's very direct. Many of the screens have been updated, but they are still easy to navigate through. Pick a function, such as time entry, contact management, and the like, and you are taken to a top-tabbed set of screens that let you find and perform the related tasks.
Data entry is simple, and the data entry screen provides two separate timers, so that you can activate them both and switch back and forth between them. This comes in handy when you're working on one client's task, then have to take a billable call from another client. With two timers, you don't have to close the first client's timer - just stop it running while you take the phone call.
CPAPractice Manager has a complete set of contact management functions. This makes it a snap to find client information and project status when you are on the phone with a client.
Bills are easy to prepare, and offer a good amount of customization capability, though there is no separate report writer included or available as an option. The reports that are available are quite comprehensive, though, and should meet the needs of most firms.
Strangely enough, the one place that we didn't find the software particularly easy was installing it. CPAPractice Manager runs on the SQLite database. The install instructions warn you not to start installation without asking your system administrator what the name of the database server is. Given the very reasonable pricing of this software, we suspect that many smaller firms will find it attractive, and wonder whether many of the most likely users will have this degree of knowledge. Fortunately, help is just a phone call away, and once installed and up and running, using CPAPractice Manager is almost intuitive.
Timeslips 2005
Best Software
Timeslips is another Best product, and actually competes pretty much head on with CPAPractice Manager. The application started out as the prototypical T&B software, making inroads during the 1980s, but actually was introduced for attorneys, rather than accountants. That situation quickly changed as the accounting profession discovered Timeslips, and several decades later, accountants make up a large proportion of Timeslips users.
The software has also evolved, adding a feature here, a report there. These days, Timeslips is easy to classify as a practice management system, rather than just time and billing. Its reports are comprehensive, and make it simple to determine billable and non-billable staff time. Once bills are created, you can print them out and send a hard copy, or e-mail the bill to the client, or both. Timeslips supports both the RTF (for word processors) and PDF file formats.
Timeslips has always had a timer feature, and the TSTimer program lets you maintain timers without having to have the Timeslips application open. This is handy if you are working out of the office and want to record time and expenses on your laptop. There is also an optional timekeeping module for the Palm operating system, available from Timeslips Corp., and a third-party time and expense entry application for PocketPC-based PDAs.
Custom fields are available in the data entry screens, so you can add tracking for any additional information that you feel is relevant to your practice. You can also hide fields in data entry screens and reports, streamlining data entry and making the reports easier to use. A bill design tool lets you easily change the boilerplate bills to meet your firm's specific requirements.
One of the major new features in Timeslips 2005 is two-way integration with Microsoft Outlook. You can capture time in Outlook, using the calendaring features of the Microsoft application, and convert this data into billable time in Timeslips. Other information that you may have stored in Outlook, such as client contact data, is also easily moved into Timeslips, and you can move this type of data from Timeslips into Outlook as well. This gives you a lot of contact management and scheduling capability, both hallmarks of a full-blown practice management system.
Timeslips was one of the first time and billing/practice management vendors to offer add-ons to increase the utility of the core product. The Timeslips Accounting Link was one of the initial offerings, and this utility is included to link Timeslips to Peachtree Accounting (another product from Best Software). A similar TAL is available for QuickBooks Pro, but this one will set you back $149. Timeslips Remote for full remote data entry is another option, at $99, and you can centralize remote data entry at the Internet-based Timeslips eCenter.
Out of the box, CaseWare Timeslips is a single-user application, but it's network-aware and network-ready. Various multi-user licenses are available in multiples of five users, or for individual users once you've reached 10 seats.
CaseWare Time 2004
CaseWare International
CaseWare is another company that specializes in applications for accountants. Unlike CCH and Creative Solutions, CaseWare has only a few applications, including the highly regarded IDEA auditing software. CaseWare Time 2004 differs a bit from previous versions in its look and feel. It still has the Windows Explorer-like view pane on the left side of the screen, but in this version, Time 2004 makes greater use of the Microsoft Office-style toolbar and drop-down menus. The result is screens that look a bit unusual, but are very intuitive.
Time 2004 is document-oriented. You create documents to manage workflow, and bills and generated reports are also documents. Time 2004 includes an integrated word processor and spreadsheet. These aren't meant to replace Word or Excel, and are suitable for many of the tasks that you might want to perform in Time, such as creating marketing letters. A document management system makes it easy to find what you need to work with, whether it's a time entry screen, or a work-in-progress report. The time screen has a timer Toolbar that launches a pop-up timer. You actually have to have Time 2004 running to use the timer, however. A remote or stand-alone timer would be a welcome addition.
With all of the options shown in the Explorer-like task bar on the left of the screen, navigating through Time 2004 is as simple as finding the desired task and double-clicking on it. The CaseWare interface does take a bit of getting use to, but once you get the feel, you wonder why more vendors don't take a similar approach.
Reports aren't as numerous as with some of the other practice management systems that we examined, but the reports that are included are concise and useful. A Project Monitor lets you keep client project information in a single, easily accessible and editable place.
CaseWare includes an add-on utility called "Today." This is an option, but is included for those firms that want to interface Time 2004 with Microsoft Outlook. When "Today" is installed, you can easily transfer data back and forth between Time 2004 and Outlook, eliminating most rekeying.
At $499, Time 2004 is competitively priced with other single-user, entry-level practice management systems. Multi-user network licenses are also available.
Not everyone will feel comfortable with CaseWare Time 2004's unique interface, so you might want to look for the vendor at an accounting show and get a tour through the application, or request a free demo version before purchasing. For our part, we find the unique way CaseWare approaches its application both innovative and effective.
CCH ProSystem fx
Office Practice
CCH Inc.
Many accountants these days are looking to implement a comprehensive and completely integrated office system. That's just what CCH offers with its ProSystem fx series of applications. Similar in concept to Creative Solutions' "Solutions," the ProSystems fx Office provides tax compliance, client accounting, engagement management, audit support and practice management applications that all tie together seamlessly through their underlying databases. This underlying database is provided by an Extended Systems Advantage Database Server, which we found easy to install and fast even on the Celeron D-based PC that we chose for testing.
While the ProSystem fx Office Practice system is somewhat pricey, it is comprehensive without being overly complex. Screens are thoughtfully designed and easy to navigate. You can pick up time and expenses through an on-screen timer, or enter them through a batch data entry screen. A planner screen lets you schedule and manage appointments, while a to-do list lets you manage engagements and tasks. Time entry can also be done remotely, on a laptop, through the Internet or on a Palm PDA. The Palm data entry module is an extra-cost add-on, and no similar module is available for PocketPCs.
Reports are nicely designed, and you can print reports and bills in PDF file format for easy e-mailing. A Custom Report Wizard provides a great deal of flexibility in the way that data is presented, and is a welcome feature. If you need more customization, you can export reports and bills to Microsoft Word for extensive editing.
An interesting add-on for ProSystem fx Office Practice is CCH's Practice Driver. This greatly extends the amount of data that you can extract and analyze from the Practice system. Practice Driver seamlessly integrates with Practice and provides comprehensive data mining features.
You can display many of the analyses in an executive dashboard-type summary, and there are a variety of other graphically oriented displays that make it easy to understand what's happening in your practice, or let you focus on areas of your practice that may not be highlighted in the standard reports that are included with ProSystem fx Practice.
Considering that Practice Driver is even more expensive than the practice application that it extends, this powerful analysis tool is obviously not for every firm. Those firms that actually use data analysis to help them make strategic decisions about firm management will love the ProSystem fx Practice and Practice Driver combination.
Practice Solution
Creative Solutions
Creative Solutions has a full lineup of accountant-oriented applications under the label of "Solutions." The Practice Solution provides a central core of a comprehensive practice management system. This application can be used by itself as a fairly complete means of billing and tracking staff resources, or can be extended by the use of add-on modules into one of the most complete practice systems available on the market.
At a minimum, though, we think most practices will have to add the PS Timekeeper module, a $200 option, to the base Practice Solution to have a really workable system, since the base system does not include multiple remote timers or staff time entry functions.
Rather, it is designed to work with a central data entry person entering time data submitted by the staff. This data entry is fast and easy, but not as fast and easy as having the staff enter it themselves. The PS Timekeeper module adds this capability to the core system. Standard data entry functions can be set up in real-time or batch mode. The system defaults to real-time entry.
Creative Solutions has had years to refine the application, and the Practice Solution reflects this effort. Data entry screens are easy to navigate, and you can move fields around, or even hide fields, to make data entry faster and more compatible with your source documents. This flexibility extends to the reports, which provide a good array of filters and easy customization. There is a large collection of management reports, and these are both useful and easy to read. Billing is comprehensive, with work-in-progress billings available, as well as a Smart Bill feature that lets you generate WIP items with automatic allocations. A Quickbill screen lets you generate multiple client bills from a single screen.
The combination of the core Practice Solution and PS Timekeeper modules provides an excellent basic practice management system. Creative Solutions' applications all "talk" to each other by using compatible underlying databases. That allows users to effortlessly integrate Practice Solution with other Creative Solutions applications, so that appropriate data will migrate between the Practice Solution and other installed Solutions.
If you want to extend the Practice Solution, that's easy to do as well. The PS Reporter lets you create custom and ad hoc reports, and there is a scheduling module that lets you track tasks in engagements and schedule staff and projects. There's even an add-on that lets you keep track of staff continuing professional education time.
This degree of flexibility isn't inexpensive. While the core Practice Solution starts out at a reasonable $900, the PS Bundle, with all of the add-ons, costs $1,800, and that's for a single-user version. Network licenses move it up from there.
Time Matters6 including Billing Matters6
Plus Accounting Lexis/Nexis
Time Matters, which was initially more "time" than "billing," has evolved rapidly since its founding company was purchased by LexisNexis. You can still purchase just the Time Matters application, which has terrific calendaring and client management features. A separate Billing Matters application extends the capabilities of Time Matters, adding full invoicing and reporting functions. Finally, there is the version we tested, Time Matters6 including Billing Matters6 Plus Accounting. This very affordable bundle gives you just about everything. It has the terrific Time Matters time management and capture features, and the extensive billing and reporting features from Billing Matters, and adds a full general ledger, accounts receivable and accounts payable system, including check printing, to the mix. In fact, about the only required firm-oriented application that's missing is payroll.
As with most of the practice management applications that we tested, you can enter time and expenses directly on a data entry screen. This is a bit cluttered, but it's very workable.
Where Time/Billing Matters shines is that it provides a complete calendaring and scheduling system where you record appointments, set alerts and centralize information and data on engagements. Sure, you can import this data from Outlook if you use the Microsoft application, but if you perform these tasks directly in Time Matters, you can capture the data with fewer keystrokes.
Time Matters also provides excellent document management capabilities, and you can conduct research on Lexis or other Internet sites, and capture the results directly into Time Matters to use in your engagements. E-mails and faxes, incoming or outgoing, can likewise be captured and managed.
In the billing and accounting areas, the system allows you to customize bills and reports, and bill in a variety of ways, including flat-fee, work in progress, and advance bill. You can consolidate bills for a client, moving bills for multiple engagements into a single bill, and there are excellent (though not very fancy) productivity and profitability reports.
The general ledger and accounts receivable and payable functions are adequate for many small to midsized firms, though they won't give you the same degree of flexibility that many stand-alone accounting packages offer. Still, the features in this area are easy to use, and many accounting and consulting practices have little need for complex or overly sophisticated accounts payable.
Time Matters6 including Billing Matters6 Plus Accounting has full support for external devices, including laptops, PDAs running either the Palm or PocketPC operating system, and even the RIM Blackberry. You can use any Twain-compliant scanner to scan documents into the application, an excellent feature if you want to capture the source documents for expense management.
Overall, Time Matters6 including Billing Matters6 Plus Accounting is a terrific application and system that will handle the needs of many small to midsized practices.
VENDOR AND PRICING INFORMATION
* CPA Practice Management
Best CPA Software
One Pensacola Plaza, Ste. 500
Pensacola, Fla. 32501
(800) 272-7123
Pricing: Two timekeepers - $399; five seats - $699; 10 seats - $999.
* TimeSlips 2005
Best Software
1505 Pavilion Pl.
Norcross, Ga. 30093
(800) 285-0999
Pricing: Single user - $399; five seats - $699; 10 users - $1,299; $159 each additional license over 10, or 5-pack for $639.
* CaseWare Time 2004
CaseWare International Inc.
145 King Street East, 2nd Fl.
Toronto, Ont. M5C 2Y8
(416) 867-9504
Pricing: Single user - $499; Office license, five users - $999, additional timekeepers are $175.
* ProSystem fx Office Practice
CCH Inc.
21250 Hawthorne Blvd.
Torrance, Calif. 90503
(800) 45-PROFX
Pricing: Five users - $1,700, $110 per additional user. Practice Driver: five users - $1,975, $100 per additional user.
* Practice Solution
Creative Solutions Inc.
7322 Newman Blvd.
Dexter, Mich. 48130
(800) 968-8900
Pricing: Up to five timekeepers - $900; other modules - start at $200. PS Bundle (all modules) - $1,800.
* Time Matters 6 including Billing Matters 6 Plus Accounting
LexisNexis Time Matters Software
215 Commonwealth Ct.
Cary, N.C. 27511
(800) 328-2898
Pricing: $700; Enterprise SQL version - $1,400.
