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Business Development

Understanding the Different Client Billing Methods

BQE CORE’s billing and invoicing feature provides the tools you need to implement different billing methods including fixed and cost plus billing.

Whether you’re an A/E firm or in a different professional services industry, billing clients happens on a regular basis. And as you’re aware, it’s not always as simple as sending a bill at the end of a project. No, depending on the client and the project type, you can find yourself dealing with a wide variety of different billing methods. If you’re using manual processes to handle your billing, you already know how much time is wasted (not to mention all the costly mistakes!) And if you’re dealing with several different types of software to handle accounting and billing, this doesn’t make things any easier. The best option to handle all of the many different billing methods is to use firm management software that includes an integrated billing system to seamlessly handle your billing methods so you can feel secure each time.  

BQE CORE offers various billing methods with flexible options for your firm. You can choose any method according to your project type and situation. Let’s look at the different billing methods available: 

Fixed Billing 

Flexible billing is a fixed or flat fee billing that occurs when a client is billed a portion of the total contract amount over several months. The project's contract type is fixed but the bill amount can be the same or vary in each billing cycle. When the project contract or company policy defines a different billing amount, you can use a billing schedule to define the billing records and amount. Learn how to set up fixed billing here.  

Hourly Billing 

Hourly billing is the most common billing practice across many industries. Hourly billing involves a dynamic generation of billing records based on time and expenses logged to projects with an hourly contract. Only approved time and expenses (work-in-progress) are included in the selected date range. The invoice amount is the total of the bill amount for time entries and charge amount for expenses after any adjustments made during the billing process. 

Recurring Billing 

Recurring billing involves a pre-defined amount billed to a client on a set frequency such as biweekly, monthly, quarterly, and so on. The amount billed is the same regardless of the hours spent. BQE CORE allows you to reduce the expenses on the recurring bill or to add them to the invoice (in addition to the recurring amount). This depends on the type of recurring contract the project has. 

Frequency of billing for a project starts from the date of the invoice. When you select a recurring contract for a project, BQE CORE generates the billing record according to the frequency and amount. 

Cost Plus Billing 

If you are an engineering, architectural or any professional services firm that works for federal or state agencies, you might have to use Cost Plus contracts. Cost plus billing adds a profit margin or management fee to the bill amount. You can set special bill rates in the fee schedules for the direct costs and set the fixed fee or percentage on the Projects screen. You can manually override it with a different amount in the Invoices screen, upon which CORE then re-calculates the net bill amount. However, if you change the net bill manually, it does not change the fixed fee. 

Cost + Fixed Fee  

Cost + fixed fee contracts can be used when you want to bill direct costs—time and expenses (if expenses are a part of the contract)—plus a fixed fee or profit to the client. When using BQE CORE, a portion of the fixed fee is added to the net bill before generating the invoice. BQE CORE also tracks the fixed fee portion to ensure you do not over-bill.  

Cost + Percentage  

A Cost + percentage contract can be used when you want to bill direct costs—time and expenses (if expenses are a part of contract)—plus a percentage of the costs or profit to the client.  

Progress Billing 

Progress billing means you can bill your clients as required even if the time and expenses are not yet ready and approved. You can send a progress bill or your monthly invoices with the projected value of the work done. Later, you can associate the time and expenses to the relevant invoices via batch update.  

Progress billing helps to improve your cash flow by sending invoices on time even though your staff has not completed their time and expense sheets. This feature enables you to bill time and expenses in advance and later associate the recorded entries with already processed invoices.  

Percent Complete Billing 

Percent complete billing is the subjective determination of how far along a project is. Throughout the life of a project, the manager tracks and updates this value. You can calculate this percentage based on the contract amount spent and then bill the client accordingly. Percent Complete billing supports both single project and joint invoicing.  

Automatic Billing 

Automatic billing, like in BQE CORE, simplifies the billing process for you by allowing you to define an automatic billing schedule at the project level. You can set the frequency and processing mode (manual or automatic) whichever best suits your current project. This process releases the associated time and expenses automatically and does the write-up/write-down, as needed.  
Split Billing 

Split billing is most used in the legal industry wherein the invoice is split into various parts to divide work among clients, firms or payers. An example of split billing is you might want to split the invoice between a primary matter and a secondary matter in a proportion of, say, 20% and 80%. All the time and expense entries are logged to the primary matter, but later the billing is split between the clients of the two matters. The line item taxes and main taxes are included in the split billing percentage set at the matter level.  

Using BQE CORE to Bill Your Clients 

BQE CORE is designed by A/E professionals for the professional services industry. Our wide range of billing capabilities means you can easily input the data you need, and let your software take care of the rest. BQE CORE combines billing and invoicing, project management, time and expense tracking, accounting, HR, and more for a full system to manage your firm’s back-office so you can focus running your business.  

Try a free demo of BQE CORE today and see just why our clients are raving about the success they’ve found with our software.  


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