Software Review: Practice management - more than just invoices

Many practitioners use the terms "practice management" and "time and billing" interchangeably.While these applications have some features in common, time and billing is actually a subset of the practice management application. Exactly where to draw the line separating the two isn't easy, simply because they have a lot in common. With each new product generation, the line slips even more, as time and billing vendors continue to add features and functionality.

The core of both T&B and practice management is tracking staff time. It's what is done with this data when accumulated that separates the one application type from the other. While both T&B and practice management can turn accumulated staff time into bills and statements to be sent to clients, practice management often goes far beyond the accounts receivable orientation of T&B.

That's not to say that the cash flow foundation of both T&B and practice management is of low importance to most firms. It takes a decent income stream to keep a practice running smoothly, and it's a very rare client who offers payment without being billed for it. In fact, in these tight economic times, many clients don't pay promptly even when they are timely and accurately billed!

When a client receives a bill for services that's both accurate and timely, there's a much better chance that it will be paid on time. And as most practitioners can attest, the longer an account goes unpaid, the more difficult it will be to collect.

Most of the T&B and practice management applications available for practitioners do a pretty good job in this area. If the ability to generate bills in a timely manner and track receivables is all that your practice requires, you may be able to operate quite well with a T&B package. In fact, practice management may be overkill for your requirements.

Examining the two application descriptions, it's the second word in each of the descriptions that highlights the emphasis of the software. In time and billing, the emphasis is on billing - cash flow. In practice management, the emphasis is on management.

Cash flow will have an important place in the hierarchy of any for-profit business. If payment for goods or, in this case, services, isn't received in a timely manner, the practice will not have the economic resources to remain in, or conduct, its business.

The practice management application acknowledges this, but also recognizes the resources that the practice employs to supply these services and generate this necessary cash flow - the time, effort and expertise of the staff.

A good practice management application will let the firm's management discover how efficiently and effectively the practice is using these resources. It does this by allowing management to analyze how and where each staff member is using their time, what staff time is not being billed, and how profitable each client and engagement is.

Under the microscope

Practice management is an unpopular application with most staff members. Many of them feel that it is in place just to uncover slackers or discover who isn't putting in a 150 percent effort. Unfortunately, in some firms, this is exactly why management implements practice management.

In the real world, though, it's just impossible to bill out every minute of every day. Some of this time is spent on tasks that are considered general and administrative overhead, some on staff development, and some of the unbillable hours are simply unavoidable staff downtime.

When used properly, practice management takes these factors into consideration when doing its analysis. When management does find anomalies in how staff members are performing, it can (and should) investigate the situation to see if an adjustment can be made in staff allocation or other areas.

Another facet of practice management is determining if firm resources are being used efficiently. Are the right staff members being assigned to the right tasks? Are the staff member's capabilities a good fit for the tasks they are being asked to perform? Are you using senior staff in tasks that can be accomplished by less expensive junior staff?

The firm's staff isn't the only thing put under the microscope by practice management. This comprehensive application also often has ties to accounts payable and expense management, so that the firm's management can make sure that it isn't expending an inordinate amount of the financial resources being generated by staff effort.

Finally, client engagement analysis is also a vital component of practice management. It may be prestigious to have a client that you bill $1 million a year. If servicing that client costs you many thousands of dollars a year more than they pay, management needs to consider raising fees, dropping the client, cutting back on the services provided, or simply continuing to eat the loss as publicity or good will.

To make this type of decision, you'll need to know not only that you are losing money on a client or type of engagement, but why, where and how this loss is taking place. The other side of this factor, overbilling, is also a concern. Many a client has switched firms because they believed that they were being overcharged for the services provided.

The 'M' in management

There are at least two other areas that a good practice management system addresses. The first is workflow. By paying attention to the reports generated by the practice management system, it may be possible to find choke points in the flow of work through the firm. Are there too many reviews scheduled for a report or return? Does a client's work end up sitting in a senior staff's inbox for days before being looked at? None of these (and other) hold-ups is necessarily a problem, unless it is costing the firm revenue or impacting productivity.

A final component of many practice management applications is CRM - client relationship management. It's hard keeping a client, and easy to lose one. Making sure that the firm is always on top of a client's requirements, calling when a client expects to be called, keeping a client in the loop on tax and finance issues that affect them, and delivering client work when promised, all go a long way towards helping in client retention. Many practice management systems either incorporate calendaring and contact capabilities, offer these as an option, or provide tight integration with Microsoft Outlook or a CRM package such as Goldmine or ACT!

Partly the same, but not totally

As an application class, practice management packages have many features in common. They all perform time and billing, and offer a variety of reports. Each vendor takes a somewhat different approach to practice management, depending upon what they feel are important capabilities or what their customers have indicated that they want in the software.

The trick in picking the right vendor and package is two-fold. First, know what your firm wants and needs. How do you track time now, and how will that process have to change if you migrate to a particular piece of software?

Once you are clear on what's necessary and important, look at the various practice management applications to see, first, if they meet these wants and needs, and second, how they go about doing this.

If your management and staff are going to have to expend a major effort to implement and use the new system, chances are that they will resist the new software or not use it in a correct and timely manner.

Data has to be captured and entered as it is generated - ideally, several times a day if possible. If your staff is frequently out of the office - and many firms are tremendously mobile these days - make sure that the system that you pick can capture time and expense data remotely through a laptop or remote PC, or with a PDA or even a cell phone.

If your staff will be using PDAs to enter data into the practice management system, make sure that the application supports the PDA's operating system. Many practice management systems still maintain extensive Palm OS support, while PDAs based on Microsoft operating systems are now the most prevalent devices. Even Palm's own Treo 700w uses Windows Mobile 5.0, rather than Palm's own software.

Pay particular attention to the reports and analyses produced by the application. If the reports don't give you the type of information that you need to make usable analyses and decisions, you'll waste a lot of money, time and effort.

Putting them to the test

To give you an idea of what you can expect, we tested six popular packages. While these aren't the only practice management applications available, this product category is shrinking, rather than expanding. Because of this, you might want to exercise caution in your purchase. Even as we were putting this round-up together, one popular practice management product changed hands.

Practice management is a mission-critical application. While you won't need a supercomputer to run any of these packages, you should install the application on a PC that's in good shape, and make sure that proper back-up procedures and protocols are in place.

We conducted our testing on a Shuttle Small Form-Factor PC with a 3GHz Pentium 4 and Seagate 160GB hard disk. For back-up, this PC has an internal 8GB dual-layer DVD burner, and can also back-up to one of the network-attached storage drives on our network.

In conducting our reviews, we installed the application and sample client data provided by the vendor. We then went through the application, adding staff, transactions and clients, and generating reports. We examined built-in timers, any interfaces for remote data entry, and what, if any, options are available.

CaseWare Time 2005

All of the vendors covered in this round-up supply software specifically for accountants, though Timeslips and Time Matters are actually a bit more targeted towards lawyers. Some vendors, such as Sage, cover several bases, with accountant-oriented products and accounting software aimed at your clients. CaseWare is totally focused on the accounting firm market. It doesn't have a lot of applications, but those that it does supply, like IDEA, CaseWare Working Papers and the product under review, CaseWare Time 2005, are all well designed and implemented.

We've commented on CaseWare's user interface in previous reviews. It borrows heavily from Windows Explorer and Outlook, with three vertical panes. The leftmost pane lists all of the possible tasks available, with subfolders that expand and contract with the familiar Windows checkbox. The center pane is where the action takes place, whether data entry or viewing a document. Finally, the small rightmost pane can hold a variety of data, such as an explanation of what actions are expected or available in the center pane. CaseWare's user interface used to be rather revolutionary, but many other vendors have climbed on a similar bandwagon, so we don't think there will much, if any, problems getting used to it.

This version of Time continues to offer its own spreadsheet and word processor. Neither is as powerful as Excel or MS Word, and since there is very tight integration with Microsoft Office, most users will use the Office applications with which they are already familiar.CaseWare Time 2005 is built around documents. You create documents for client engagements, work papers, bills and statements, and other tasks. Finding the right document is easy - just click on the appropriate client or document folder in the leftmost pane.

The application provides a few bells and whistles that are either optional on other practice management packages, or unavailable. These include engagement letters and a simple-to-use project management capability using the project monitor. Time provides many reports, and you can use filters to make these more focused. Designing your own invoice and statements is pretty easy with the tools provided. Reports and invoices can be printed in PDF format, which makes them easy to e-mail.

As provided, Time makes it pretty easy to track client assignments. If you use Outlook as a contact manager, the "Today" add-in provides an easily implemented transfer capability between Time and Outlook in both directions.

Time does not provide a direct interface for PDAs or Web-based data entry. You can clone the Time file so that staff members can enter time and expenses on their laptop, and merge these in to the main file. Since you can transmit this file over the Internet, it's not hard to gather remote staff time and expenses. CaseWare still doesn't offer a stand-alone timer utility, so Time needs to be running to use the built-in timers. There are five of these, so you can have several client timers open simultaneously, starting and stopping each as required.

Time is priced at less than $500 for a single-user version, and multiple-user versions are available. CaseWare can provide you with a demo disc if you want to try the software out before you buy it.

CCH ProSystem fx Office Practice - Enterprise Edition

CPA Software could borrow the famous Timex tagline - "It takes a licking and keeps on ticking." Over the years, there have been numerous changes in ownership of this company, but despite which vendor's logo is on the letterhead, CPAS has managed to continue to refine and support its accountant-oriented applications.

Late last year, Sage, the latest owner, renamed CPAS to Sage Practice Solutions - and then, as we were putting this round-up together, Sage and CCH announced that the Sage Practice Solutions applications were being acquired by CCH, and renamed as part of the ProSystem fx line.

The staff of Sage Practice Solutions will, at least for the time being, remain in Florida and continue to develop and provide support for the software. Exactly where sales will be based was still unclear at press time, though you can still call the Sage Practice Solutions 800-number to buy the software.

CCH has its own practice management application, however, so the ultimate fate of the Sage application remains to be seen. Considering that the newly renamed ProSystem fx Practice - Enterprise Edition is a brand-new application and is much less expensive than CCH's ProSystem fx Practice, it's very possible that CCH will continue to sell and support two practice management products, with the Sage acquisition positioned as an entry-level product.

And if that isn't confusing enough, the practice management application is not the same product as the Practice Manager that we've reviewed in the past. This is a new product, based on .Net and MS SQL Desktop Engine technology.

Flush from our success in installing Creative Solutions' CS Practice, which also uses the MSDE engine, we plunged full speed ahead with our installation. Big mistake!

Creative Solutions' application does much of the SQL engine configuration for you. The Enterprise Edition assumes that you have a fair competence in setting up a SQL database, which we were somewhat rusty at. We wasted several hours before we gave up and decided to wait for a business weekday when tech support would be available.

That was the best decision of the weekend. The support person walked us through the installation, configuration and set-up, and we were running the application 20 minutes after making the call. This isn't to dissuade you from purchasing the Enterprise Edition - just realize that you will need someone with a bit of competence in SQL to get going.

Once we got the application running, though, we liked it a lot. There's no fancy overall navigation pane, just simple menus. Choosing task categories, such as AR, administration, billing, time entry, contact management and the like, takes you to screens where you can choose individual tasks. Many of these screens have a vertical panel on the left that lets you make the task selection, showing the results in the large right-hand panel. We found it easy to enter time and expenses, and find the tasks and reports we needed. You can customize reports with extensive filters, and use Crystal Reports 10 to generate custom and ad hoc reports if needed.

Regardless of what name this application wears, it provides a lot of functionality and capability for a reasonable price. Some features were still in development as we conducted the review. These included Web time entry as well as PDA data entry. Interfaces for general ledger and payroll are also promised for the second quarter.

For the most part, the Enterprise Edition has pretty much the same (or improved) capabilities as its predecessor, and is priced more in line with a T&B practice. If you can wait for some of the add-on bells and whistles, it's a good deal.

CCH ProSystem fx Office Practice

Over the past several years, CCH has emerged as a major force when it comes to providing a complete suite of accountant-oriented applications. Along with tax prep and write-up, CCH has several applications for practice management in its ProSystem fx Office suite. All of these applications are tightly integrated, built on an underlying Advantage database.

Unlike several of the packages we reviewed based on Microsoft's SQL Desktop Engine, we had no difficulty installing the Advantage Database Server, Practice or the Engagement ancillary application that CCH sent us to look at. ProSystem fx Engagement is an optional application, as is the ProSystem fx Practice Driver, a data mining and analysis add-on. Practice Driver provides an excellent addition for those firms that want to go a bit farther in determining what is taking place in their practice, and can display the data in an executive dashboard format. ProSystem fx Office Engagement is another worthy addition, though it is not designed solely for use with Practice - you can use it with audit and tax prep as well.

By itself, ProSystem fx Practice will meet the needs of many small and midsized practices. As with CaseWare's Time, a small vertical pane on the left of the window shows you what tasks are available. These are grouped under larger buttons. When you click on a button, such as "Time," a list appears of tasks related to that overall category. This makes it easy to navigate through the application. Screens are nicely laid out and easy to understand, and it is simple to drill down to source screens from many of the summary screens.

A "day-planner" feature helps you and your staff to schedule their time and convert it into time data as you finish appointments. ProSystem fx Office Practice also has timers that you can use to track the time spent on a client assignment during the day. The application lets you enter time and expense data remotely, either through a remote timer on a laptop, or via direct entry through the Internet. There's also a PDA module, though this is only available for the Palm OS.

ProSystem fx Office Practice provides a comprehensive set of reports, and you can export these into Word or Excel for easy customization, or print them to PDF format, so they can be e-mailed. There's also a custom report wizard that lets you extensively filter data presented in the reports.

By itself, Practice provides good project management features, including tracking and status reports. For more detailed control, consider CCH's ProSystem fx Office Engagement. This greatly extends the workflow reporting capabilities, and works across the Office and application suite so you can follow a client's engagement from initial contact, through write-up and review, and into tax prep. Engagement also provides document management and the ability to route client reports and documents electronically, reducing paper clutter and slow-downs.

Creative Solutions Practice CS

Creative Solutions was one of the first vendors to directly address the accountant's software market. Its line of applications was also one of the first to be seamlessly integrated by using a database shared between applications. The vendor remains one of the most successful in this market due to both the completeness of its applications suite and the quality of its applications.

As Creative Solutions has transitioned from its "Solutions" series to the new "CS" series of applications, it has also freshened many of its applications, including Practice CS. This version of the software moves onto a platform consisting of Microsoft .Net technology using the Microsoft Desktop Engine SQL Database.

One reason that many application vendors are moving to MSDE is that it is essentially free if you are using Windows 2000 or Windows XP, while other database engines, such as Pervasive, require a license fee. Another is that scaling up to a huge number of users is a snap; it only requires that you purchase a Microsoft SQL Server license for the appropriate number of users.

Creative Solutions has also spruced up the user interface. The old one wasn't too shabby, but the interface in Practice CS incorporates the by-now familiar left vertical task pane. This pane has buttons for Actions, Firm, Staff and Clients. Clicking on a button exposes tasks related to that category. We always liked this approach when CaseWare introduced it years ago, and it's obviously an idea whose time has come.

Interestingly, the top entry in the Actions tab is a dashboard. This launches a full-screen graphical display of important firm information. This dashboard is customizable, so you can display only that data that you find relevant to a quick overview. If firm priorities change, modifying the dashboard to reflect these new priorities takes only a few minutes. Dashboards can be set up for firm data, and another set up for client data. There's also a set of links on these dashboards to access Microsoft Office documents, other CS series applications, or to view sites on the Internet. This dashboard is a nice feature if your management will use it.

Practice CS continues with many of the desirable features from the Practice Solution. There is extensive customization and filtering available in the reports, and you can hide fields in input screens or move them around to more closely match source documents.

The practice management application no longer needs a separate timekeeper module. Timekeeping is integrated into the application and can be done by the staff member or batch-entered by a data entry clerk. Multiple timers are available in the software, but the application must be running to make use of them.

Obviously, the prime candidate for Practice CS is a firm that's already adopted other Creative Solutions applications, or plans to do so in the future. Other practices will find Practice CS a practical and useful application even if they don't want to become an all-Creative Solutions shop.

Lexis/Nexis Time Matters 7 including Billing Matters7 Plus Accounting

Time Matters just keeps getting better and better with each release. The application, now owned by LexisNexis, is modular. You can purchase only the Time Matters part, which has more of a practice management focus than billing. This part of the bundle has always been very strong in the areas of calendar and customer management. You can capture time directly in the application, or import it and scheduling information from Outlook. Time Matters has excellent data import capabilities. You can use it with Palm and PocketPC PDAs, and even the RIM BlackBerry.

E-mail management has been a feature of Time Matters since its first release. These features have been enhanced in this version, with the addition of an out-of-office assistant, vCard support, and several other tweaks. Time Matters continues to provide comprehensive document management functions, as well as links to LexisNexis for research without needing to leave the Time Matters application. Of course, you do have to have a Lexis/Nexis account to use this feature.

When researching on the Internet, you can capture information and use the document management functions to organize the documents into appropriate categories and/or clients. Twain driver support lets you plug in a scanner and scan documents into the application as well. The ability to attach supporting documents is very useful in an audit or tax prep engagement, if the other software that you are using does not provide these capabilities.

Billing Matters Plus Accounting, the other bundle component, lets you create and track invoices and statements. It adds a full general ledger as well as AR and AP. For many firms, especially those on the smaller side, this will be enough. If not, you can link these applications to a stand-alone accounting package. Time Matters includes a two-way link to the new Microsoft Small Business Accounting 2006 software.

All of the practice management packages that we tested allow you to customize bills and reports to some extent. LexisNexis has changed many of the reports a bit, though they are still not all that fancy. You can fancy them up yourself with the customization tools and filters provided, or export them into Word to really get fancy.

A feature that we really liked is the ability to customize the navigation panels. When you install the entire bundle, you get a seamless set of navigation panels that pop up depending on the task category that you select. Any and all of these navigation panels can be completely customized. You can add and delete icons, change the icons or replace them with custom bitmaps, insert tasks from other navigation panels, and re-order the flow of the tasks in the panel. It's easy to do, and a unique and useful feature. These revised navigation panes can be global, or customized for specific users.

Sage Timeslips 2006

Timeslips is one of the best-known packages for time and billing, having been around since the 1980s. It was originally introduced for lawyers, as many T&B/practice management systems were, but was quickly adopted by accountants. Not surprisingly, the company was bought quite a while back by Sage, so it's one of three Sage products in this round-up (at least until CPAS is more fully integrated into CCH ProSystem line.)

To be accurate, Timeslips 2006 might be best classified as a T&B application, though over the years its capabilities have been enhanced to the point where the argument can be made that it's equally useful for practice management tasks. Be that as it may, because of its popularity we've included it in both the practice management and the T&B round-ups.

Timeslips was initially modeled after the manual system of filling out little pieces of paper for every client task. Its paradigm is still an analog of a paper time or expense slip, though the process has been greatly enhanced and simplified by computerizing it. As in past versions, you can fill out a form to record client time (or unbillable time for tasks such as G&A overhead, staff development and meetings, and the like).

One of the best features of Timeslips is its pop-up timers. While this function has been widely copied, Timeslips still does it very nicely. You can run multiple timers from the application, or you can install the TSTime utility, which lets you run client timers without having to have Timeslips running or, for that matter, even installed. Remote time entry is available, and Sage offers an optional timekeeping utility for Palm OS-based PDAs. Timeslips itself does not support the Microsoft Mobile operating system, but a third-party developer does have this for sale.

Timeslips is a mature application, so this year's offering is very similar in features and functionality to last year's. It provides comprehensive reports, which can be exported in PDF format or to a word processor for further editing and customization. The 2006 version adds an export to Excel feature, so it's very easy to do custom calculations.

Sage has also added the ability to reprint unpaid bills, and enhanced the drill-down capabilities in the reports so that you can trace transactions back to their source. The newest version of Timeslips also enhances report sort options. You can sort by report column, or by values such as time, date or money amounts.

If this is not enough customization for you, there is a report design tool to let you create your own reports from scratch or by modifying an existing report. Data entry screens are also customizable, so you can hide unused fields to speed data entry and cut down on data being placed incorrectly.

This "customize by hiding or deleting" carries forward into other areas of Timeslips. The software monitors your use, and after a while, if you haven't used a feature, it asks you if you want to disable it. Timeslips calls this "smart configure," and it can avoid inadvertent operational mistakes by hiding features that aren't used.

As a mature and polished product, Timeslips already had plenty of useful features, including the "Timeslips Today" panel. This is a configurable executive dashboard-type of display to give you a status-at-a-glance overview of important firm data. Also carried over into the latest version is the tight two-way integration with Microsoft Outlook. This lets you schedule appointments in Outlook and capture the time there, transferring it for billing into Timeslips.

The popularity and length of time that Timeslips has been available has resulted in a large pool of third-party developers creating adjunct applications and capabilities for the core application. Many of these are available online at the Timeslips Web site.