Top 5 Year-End Reports in BillQuick

Sugar plums dance in our heads. It is that time of year. For presents and visits and . . .

Year-end review and making plans for 2008.

Checking 2007 results, improvements and new initiatives naturally flow forth. Company procedures could be improved. Initiatives to speed up collections (or just to collect certain balances) may be part of plans to expand the firm. You may simply realize the work pipeline needs to be filled. Reviewing 2007 results, you may also decide that the firm would benefit from staff and management skill improvements. (One excellent opportunity is the BillQuick User Conference, Keys to Success.)

Below are the top 5 BillQuick reports to help you review and plan.
 

Aging Report As Of	From the Reports, Aging menu, select this report and run it twice -- first as of December 31, 2006 then again as of December 31, 2007. Comparing accounts receivable totals and aging between the two reports by project, client and company provides a good measurement of collection efforts. Relative to the revenues for each year and seasonality factors, gauge whether you need to improve collections.
Gross Margins	From the Reports, Analysis menu, run this report for invoices dated 1/1/07 to 12/31/07. Each page lists invoices for a client, showing what was billed, its cost, gross profit, and the gross margin percentage. Look closely at the cost figures to ensure they are accurate. In addition to comparative insights into client and project profitability, this report may also prompt you to fine-tune pay rate and overhead multiplier information for employees. Also, it may indicate a need for a fee increase across the board, for certain project types, or for certain clients.
Staff Billing	From the Reports, Analysis menu, run this report for 1/1/07 to 12/31/07. 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 and against a benchmark rule of thumb. This may lead to skill improvement plans or changes in personnel. 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.
Work in Hand	Run this report from the Reports, Company menu with no filters. It 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 2008.
Project Manager Billing Analysis	From the Reports, Billing menu, run this report for 1/1/07 to 12/31/07. 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.

A few extras you may want to check out include:

1. Days Receivables Outstanding - Knowing the age (in days) of each invoice highlights the risk to your investment in clients (also see the next report). The longer a receivable is outstanding, the greater the probability of it not being paid in full (or at all). What is normal depends on your industry and clients, but be cautious not to quickly accept the situation just because it has always been that way. Using the data in this report, you can estimate what it costs you in real dollars for working capital (loans, credit cards) as well as in lost or postponed opportunity (marketing funds, expansion capital, investments). This may lead to charging late fees, raising fees, or requiring up-front or scheduled payments for work.

2. WIP + AR by Client, WIP + AR by Project - Reviewing the total work in progress (unbilled time and expenses) and uncollected accounts receivable, you will know how much you have invested in clients and projects. In addition to the carrying cost for unbilled and uncollected work, higher-than-average total investments are red flags. To gauge the magnitude of the risk, ask yourself what would happen if the largest 3 or 5 clients went bankrupt. (The previous report can bring the risk into sharp focus.) To lessen the risk, expand the number of clients and projects you have to reduce investment concentration and/or request up-front or scheduled payments for work.

3. Gross Margin by Project - Run this report to increase the sensitivity of project managers 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).