You might not want to hear this, but the path to better cash flow starts long before you sit down to draft invoices. Thankfully, though, there are some proven, simple changes in your firm’s habits can put you on the right course.
While this advice is pertinent to any professional services firm, in this post we’ll take a look at how a sophisticated system such as ArchiOffice can help you implement these three techniques.
1: Establish a Billing Routine
First, your team needs to establish a routine of predictable billing. When you send out invoices on consistent dates, your clients know what to expect and will pay more regularly.
Predictable billing is a team effort. You should schedule staff reviews of time and expenses, so employees can ensure that their numbers are entered accurately before the billing process starts. Follow that up with a scheduled management review, after which the bookkeeper or office manner can start their work.
2: Conduct Time Reviews
Our first point relates to why doing proper time reviews is crucial. Good cash flow starts at the beginning, with employees entering their time in the system. When they do this in a timely and efficient manner, they develop better time management skills.
In other words, if your staff knows that they’re expected to enter their time by—for example—Monday at 9 am every two weeks, they’ll develop a consistent process that works with their schedule and responsibilities. Some employees might simply enter all their time that Monday morning, while others could take a minute to do it at the end of every day. Either way, entering time will no longer be a haphazard process.
If you want even more regularity, you might want to use ArchiOffice’s option to require approval for time and expenses. With this feature, once an employee’s time is approved they cannot go back and change their hours. This means that there are no surprises at the end of the month.
If you prefer a hands-on approach, you and other managers can approve employee time in detail view. This entails going to each project and clicking on each slip to approve.
However, this can be a little time-consuming or challenging for smaller firms. If that’s the case for you, you can batch-approve.
3: Do a Pre-Billing Review
Finally, you should make time for a pre-billing review. This entails looking at the billable amount of time that you’ve put in and making sure that it’s covered by the amount that you’re going to bill. Even if you bill by fixed fees, this is an incredibly helpful exercise to see whether or not you’re being paid enough.
The simplest way to get it done is to run the budget vs. actual report in ArchiOffice. This will show you your allocated, billed, current, and remaining hours, in addition to the percent that’s been invoiced so far.
These three suggestions seem pretty simple by themselves, but together they’ll have you well on your way to increasing your cash flow!