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Year-End Reports and Action
Plan
It's that time of year - Year-end review and
planning for 2009.
After reviewing
the top 8 reports (and others),
it is time to develop your
Action Plan to optimize your
policies and procedures.
Top 8 Year-End
Reports
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Aging
Report As Of |
From
the Reports, Aging menu,
select this report and
run it twice -- first as
of December 31, 2007
then again as of
December 31, 2008.
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. |
|
Days
Receivables Outstanding |
Run
this report from the
Company category on the
More Reports screen. Do
not apply date filters.
(If project managers are
responsible for
collections, filter the
report by Project
Manager and schedule it
as a biweekly report
generated by BillQuick's
Agent add-on module.)
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.
Information on this
report may lead to
changes, such as charging late fees,
raising fees, or requiring
up-front or scheduled
payments for work. |
|
WIP + AR
by Client, by
Project |
Run
this report from the
Analysis category on the
More Reports screen. Do
not apply date filters.
(Filter the report by
the responsible manager
and schedule it as a
monthly report generated
by BillQuick's Agent
add-on module.)
It is
critical to know how much you have invested
in clients and projects. In
addition to the carrying
cost for unbilled and
uncollected work,
excessive total
investments are
Red Flags.
Ask yourself what
would happen if the largest
3 or 5 clients went
bankrupt.
To
reduce the risk,
initiate new client and
project acquisition
(rainmaking) efforts.
You might also request up-front or
scheduled payments for work. |
|
Gross
Margins |
From
the Reports, Analysis
menu, run this report
for invoices dated
1/1/08 to 12/31/08. Each
page lists invoices for
a client, showing what
was billed, its
cost,
gross profit, and the
gross margin percentage.
Ensure the costs
are accurate.
Also, compare
client and project
profitability.
This
report may signal a need
to fine-tune employee pay rate and
overhead multiplier
information. Also, it
may indicate technology
optimization or internal
policy changes to
improve efficiency and
reduce job costs. Or it
may indicate an increase
(across the
board, certain
project types, or certain
clients). |
|
Staff
Billing |
From
the Reports, Analysis
menu, run this report
for 1/1/08 to 12/31/08.
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. |
|
Gross
Margin by Project |
Run
this report from the
Billing category on the
More Reports screen. Do
not apply date filters.
(Filter the report by
Project Manager and
schedule it as a monthly
or quarterly report
generated by BillQuick's
Agent add-on module.)
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). |
|
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 1/1/08 to 12/31/08.
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. |
Action Plan
Reviewing the top
5 reports (and others) will
prompt various initiatives for
2009. Your plan of action might
include goals such as:
-
Increase billed hours by tightening company
policies, such as recording hours worked - billable and
non-billable - no less than once a day.
-
Convert administrative hours into billable
hours or into productive hours that support more billable
hours.
-
Speed up time capture by making it possible
to capture hours worked anytime, anywhere.
-
Increase monitoring of budgets and contract
spent, and focus on exceptions.
-
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.
-
Reduce the time it takes to bill clients.
-
Bill twice a month or weekly whenever
possible.
-
Increase monitoring of the work pipeline and increase the
number of months of work in hand.
Your actions to
fulfill these goals might
include more extensive use of
BillQuick's Agent add-on module
(or purchasing it) to:
-
Monitor time card entry and follow-up (email
tardy timekeepers), supporting both more frequent time entry
and reducing administrative time spent chasing down tardy
timekeepers.
-
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 budgeted burned or contract spent.
In addition, you
may tap the experience of
BillQuick Consultants and
Trainers 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. Finally, you can
customize or create a new
billing review worksheet
optimized for your billing
managers and their needs and
style of decision-making.
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