BillQuick Blog

Continued from Part 1

Staff Billing

From the Reports, Analysis menu, run this report for 1/1/09 to 12/31/09. The report shows utilization (hours and percentage of billable and non-billable time), total hours and effective rate for each employee. Compare employees performing similar jobs, against a benchmark rule of thumb. If available, compare staff effective rates against companies of similar size. These benchmarks may be published by your industry association or may be shared informally by peers.

Even with recessionary factors, this analysis indicates whether you should develop skill improvement plans (technology, professional, etc.) for staff and managers. It may also indicate personnel changes.

Gross Margin by Project

Run this report from the Billing category on the All Reports screen. Do not apply date filters; however, for a comprehensive analysis you should run sets of reports with the following filters:

• Client
• Type (project custom field)
• Project Manager

When filtered by Client, you can analyze projects for the same client and client to client. Analysis begins with profitability comparison, and then you can drill down to other information to answer ‘why’. When you identify the processes, procedures and client relationship characteristics that produced superior profits, they should be carried to other clients and their projects.

Expanding your analysis to type of project, run this report with the Type (custom field) filter. Your analysis may show that certain types of projects (services, industries, etc) should be expanded to improve profitability.

If you hold project managers accountable for the profitability of their projects or plan to do so, apply project manager filters to this report. Scheduling this report with Agent Workflow Automation will help increase project manager sensitivity to profitability. When discussing results, identify what is unacceptable, work through the causes, and then make improvement plans (technology, fee increase, improve skills, improve efficiency).

Project Manager Billing Analysis

Along with the previous report, run and analyze this report. Select it from the Reports, Billing menu and run it for 1/1/09 to 12/31/09. It shows billings, payments, credit memos and write-offs by invoice for projects managed by each individual.

The key indicator to check is the difference between the total billings and total collections. If it is 10% or less, this is normal. However, a red flag should go up when the difference is greater than 10% of billings. Be sure to adjust your analysis for normal collection cycles and seasonal billing factors.

Work in Hand

Use this report to analyze your company pipeline. Select the report from the Reports, Company menu and apply no filters. Work in Hand shows unbilled contract amounts (and whether you are over-contract).

To gauge how many months of work are in the pipeline, divide the unbilled contracts by your typical monthly billing amount. Combined with available staff and other resources and plans for expansion, this will indicate how intensive new business development should be in 2010. While staying in touch with clients and staying active with prospective clients is part of your daily and weekly marketing activity, rainmaking typically involves more robust activity. As a general rule of thumb, you should have at least 6 months of work in hand. With work in hand, you can add independent contractors and employees to handle the workload should the economic recovery expand faster than expected.

Action Plan

Reviewing the top 8 reports (and others) will prompt various initiatives for 2010. Your plan of action might include goals such as:

1. Increase billed hours by tightening company policies, such as recording hours worked – billable and non-billable – no less than once a day.
2. Convert administrative hours into billable hours or into productive hours that support more billable hours.
3. Speed up time capture by making it possible to capture hours worked anytime, anywhere.
4. Increase monitoring of budgets and contract spent, and focus on exceptions.
5. Increase interaction with clients to stay on top of their situations – for opportunities, to improve client relationships, and for a head’s up on work and cash flow risks.
6. Reduce the time it takes to bill clients.
7. Bill weekly or biweekly whenever possible.
8. Increase monitoring of the work pipeline and increase the number of months of work in hand.

Your actions to fulfill these goals should include more extensive use of the Agent add-on module to:

• Monitor time card entry and follow-up (email tardy timekeepers) with virtually no admin hours involved, ensuring more timely, accurate and complete information for management.
  
• Schedule reports to be automatically generated and delivered to project managers, principals and partners.
  
• Set alerts for exceptions or new conditions, such as a percentage of the budget burned or contract spent.
  

In addition, you may tap the experience of a BillQuick Consultant or Trainer to review your time capture and billing processes. They can recommend ways to improve workflow and procedures in your firm. Custom training can also improve habits and procedures.