Many elements interact to maximize firm, manager and staff efficiency. Without these efficiencies, project and firm profitability is never consistent or reasonable.
A recent call from a BillQuick customer brought out a common scenario. Please spend a few minutes to see if there is something in this conversation that helps your firm.
[This conversation was edited for clarity and brevity.]
Hi, I wanted to talk to someone about our situation . . . see if BillQuick is still right for us or if we need customization of some type.
I will be glad to help. Why don’t you give me a little background and tell me the issues.
Okay. First, our firm merged with two other firms over the past 16 months. That all went smoothly. We jumped from 7 employees to 26 . . .
We’re winning more jobs. Coming out of the recession and the different backgrounds of the three owners. . .they are putting a spotlight on project profitability. . . the inconsistent margins. . .
I did an analysis for the owners. They didn’t like that projects are doing worse overall, profit-wise that is. Too many are below 5%. Some are 9% or 10%, and a few are near 15%. The owners think special project management training is the solution. It will help but I don’t think it is the management of the projects that’s the real issue. Our managers have 10 to 30 years of experience. . .
I think it has more to do with “process” – the process the managers follow, that the firm overall follows . . . in the way we manage hours and expenses charged by staff and managers. I think maybe we need special BillQuick training or customization. I hope we don’t have to change to another program.
Do you have any ideas?
I agree that a special seminar for project managers will help. Everyone benefits from refresher training. Each person’s experience brings out questions that they would not have thought of before. And there are always a few new things to learn.
For BillQuick . . . let me ask a few questions. What is the company policy for recording hours worked and expenses – daily, weekly, biweekly . . . ?
It’s biweekly. That’s our payroll cycle, every 2 weeks.
Okay. Are staff and managers on time with their time sheets or . . .
[laugh] Never! Well, that’s not fair. They’re busy people, especially the professionals and managers who go out to the job sites.
So you have to remind them a lot?
I send out reminders the day before. Then I do a road trip through the office. It takes about an hour, sometimes more, while they finish up.
Who reviews time and expenses?
I do. Before processing the payroll.
What about billing? Who checks the items?
The project managers do. That’s one of the things that slows down billing. When they find something that off, that’s not right, they ask the employee or sub-consultant to explain.
What’s that like?
It can be a slow process, maybe a week sometimes. It depends on everyone’s schedule.
What do the manager do? How do they handle the feedback?
[laugh] There’s a joke in our firm about the looks people give managers when they ask about work done weeks before.
Sort of like a deer in headlights? Frozen, startled?
[laugh] Yeah, like that.
How much of the “questionable” work and expenses are marked ‘Non-Billable’?
Sometimes a lot. It depends on a lot of things – how busy we are, whether the professional or staff have time to research what happened 2 or 3 weeks before. Like I said, we’re growing and the owners want to leverage people.
Okay, I think I have the picture now – Biweekly time sheets and expense reports, time and expenses charged to projects are checked during the monthly billing cycle, billing takes 7 to 10 days per month. . .
And that’s less than what it used it. Before BillQuick it took us 14 days, sometimes more. The other firms we merged with, one of them took 20-23 days to get invoices to clients.
Your situation is not uncommon. You’ve gains strong benefits from BillQuick already, but I think you need to adopt a few more features to smooth out the process, to boost efficiency across a few areas.
First, talk to the owners about changing the firm’s policy for time and expense entry. Make it daily.
I don’t have time to chase down daily time sheets. I. . .
And you won’t be. Chasing down time sheets will be a thing of the past.
To help change everyone’s time entry habits, the second recommendation is that you purchase the Agent Workflow Automation module. It monitors time cards. Your policy will be to enter all billable and non-billable time – at least 8 hours every day.
Then Agent will check that everyone is doing it. If someone does not report at least 8 hours, they receive an email reminder. You can also send a reminder to their supervisor. This builds the new ‘daily entry’ habit. Most employees will use the Simple Time Card screen for hours worked. Our customers reports their employees take less than 1 minute per day to record their time.
Last, I recommend that you add BillQuick’s Submission and Approval. Every day after entering time and expenses, employees should submit them for approval. Time would be submitted to you for payroll, and both time and expenses would be submitted to project managers for billing. It takes only a few seconds to submit items.
The managers have their Billing Review Report to know what to bill. How will I know what’s been entered? Does BillQuick tell me what report to print?
No, it’s easier than that. BillQuick informs you in three ways when you have items to review. With a click you can see each employee’s hours for payroll. It’s done on-screen. If something’s not right, you reject it and send a message through BillQuick back to the person. They get it the next time they log in. No more road trips around the office.
Also, project managers won’t be waiting for a Billing Review Report. Waiting is part of the profit hit you’re taking on projects. Like you, they will review entries by project on-screen. Our customers report a typical review of project time entries takes 7 to 15 seconds. Managers check time and expenses a couple of times a week. If they reject something, it’s no more than a few days after the work was done. It’s fixed quickly. You’ll have to replace the ‘deer in headlights’ joke with a new one.
[laugh] Not a problem. We’ll hold a joke contest.
[laugh] Okay, now let’s look at the outcome of these changes, the efficiencies added to the process.
Agent’s automatic monitoring of time entry policy results in more timely information. Managers can check budget comparisons, project spent and other job reports more often. Because managers review time and expenses a couple of times a week, they have a better sense of charges. Essentially, they have timely information they can rely on to help them manage projects better, more profitably.
Also, submission and approval results in less time spent making billing decisions. Your billing cycle should drop to 2 or 3 days.
Yes, that’s common. It also means you gain about 3 months greater cash flow per year.
Last, managers gain back more billable hours. They can spend more time managing projects, and maybe manage more projects. You gain more productive hours too.
The bottom line is managers can combine the project management techniques they learn in the seminar with efficiencies from BillQuick. They have more hours and better information to bring in more profitable projects. Based on what other customers report, conservatively I’d expect a profit boost of 3% for projects and more consistent margins.
There are other BillQuick features that might help enhance project profitability a little more. I think other seminars might help too. It’s best to take it a few steps at a time.
I remember the approval feature when we bought BillQuick 3 years ago. We didn’t need it.
It might have added some benefits with 7 employees back then, but now with 26 it is essential for efficiency. Agent’s time card monitoring is too.
I’m not sure I can handle this alone. Does BQE offer training, other help?
Yes, we can set up Agent for you remotely. Our consultants do that every day.
Also, I recommend Open Training for you and the project managers. The owners will probably want to be part if it too. I think it is best to customize the training to your firm, leverage what you do now and add improvements.
One last item. You didn’t mention it, but if there’s a problem with charging to the correct project, you might assign employees to projects. It’s called Project Control. Also, a remote option for capturing time and expenses on a smart phone or laptop away from the office might be beneficial too. We can talk about those issues later.