Is your billing process a bottleneck or a breeze?

| By:
April Taylor

As the technology support industry matures, providers require greater efficiency and flexibility out of their billing. The contract and billing process has become the conduit that allows you to clarify the relationship expectations between you and your customer. The success of the business is dependent on clearly defining, auditing, and reporting on the services you agree upon.

Knowing what you can deliver to your customers and fulfilling these expectations will help you build loyalty and trust, resulting in a long-term, profitable relationship.

Billing process best practices

To help you and your business gets to that point, we’ve developed five best practices for your billing process.

  1. Know the source of truth – Accurate data is key to the billing process. Ensure that the source of truth for each part of your billing process has been defined. Reconcile and update data on a rolling basis. Vetting all billing records against a source of truth ensures the accuracy of what you’re sending out.
  2. Automate payments – Cash flow is key for your business. One of the best ways to increase your cash flow is to automate recurring payment collection. Take the bottleneck out of the collections process by setting up a payment gateway to process automatic payments.
  3. Automate contract related billing – Use automation to control and bill the contract details established with the customer. There is a lot of complexity in billing. You need to be on top of services, cloud, and transactional billing. Ensure that you are automatically updating product additions and transaction details so that billing is a snap.
  4. Your invoices are a window into your house – Keep those windows clean! Verify that your invoices accurately and positively represent your brand. Most customer finance managers will not visit your office; they will only look at your invoices.
  5. Reduce risk with down payments – Requiring a deposit for projects and/or large purchases reduces your risk and improves your cash flow.

Tools for a better billing process

Billing is the backbone of your incoming revenue stream and your cash flow. If an outdated billing process is creating extra work and turning your billing into a bottleneck, it’s time to consider how smarter solutions can deliver an automated, cost-effective way to ensure your invoices are paid on time and delivered seamlessly, so that your financials stay accurate.

1. A PSA tool

Consolidating information into a professional services automation (PSA) tool, like ConnectWise Manage®, will help you keep track of everything from pricing to organization-wide profit and loss.

Because the system relies on a single database to store information across applications, you’ll eliminate the time wasted from double entry and significantly reduce the probability of errors. Because it’s a web-based system, you’ll have immediate access to in-the-moment financials wherever you go, making it possible to forecast on the fly and plan like a pro.

Another part of a PSA tool to consider are workflow rules. You can use these to setup automatic check-ins to ensure your invoices are being paid on time, create accountability loops that send alerts to your finance team, and even email your customers once invoices become past due. There are a lot of moving parts in your billing process, and workflow rules help keep the process moving forward.

Another unexpected benefit? With the right billing process in place, you can estimate, track, and report job costs, forecast and report on payroll, and even calculate your sales commissions. The level of detail available in your system’s reporting will not only reduce data-entry time but will make it simple to send information within teams and outward to customers and vendors. Full visibility makes it possible to keep your techs at 80% billable—or better—to make sure you’re not losing revenue to low productivity or untracked time.

2. Cloud billing

As more of your customers take their businesses to the cloud, you’re going to need an easier way to bill, manage, and monitor those services. To make it easier on you and your team, finding a PSA solution that includes built-in cloud billing is the place to start.

A solution like ConnectWise Manage Cloud Billing reduces the complexities of managing multiple cloud services and brings them into one, easy-to-use platform. Like other aspects of your business, automation can make cloud billing simple. You’ll remove the manual processes and automate billing for subscriptions and usage, as well as adjust billing and invoicing for clients that come on board in the middle of a billing cycle.

Track and report on your financial performance with customizable dashboards to ensure your cloud services are profitable. Purchasing and procurement for Microsoft® Office 365® and other popular cloud services are just a few clicks away with integrations with top distributors.

3. User-friendly Customer Portal

Don’t forget about your customers when you start making improvements to your billing process. You want the process to be easier for them too.

You can achieve this with a customer portal, like the redesigned ConnectWise Customer Portal. This is the one-stop-shop to take your most time-consuming customer interactions and put the end user in control. Customers can submit tickets, check on ticket status, and, best of all, for your billing process, easily pay their invoices. The ConnectWise Customer Portal is also customizable to represent your brand.

Elevating your billing process

As your leadership gets used to relying on integrated reporting, it will be easier to determine costs, spot P&L abnormalities, and provide more accurate cost estimates as expenses arise. You’ll also be able to rely on an optimized billing process to monitor changes, track sales information, and even send statements and invoices to customers.

1. ConnectWise Now dashboards

To make the most of all the information you’re collecting, you need to be able to easily access it when you need it. The all-new ConnectWise Now dashboards put business-critical data, from finance and billing to service, support, and sales, at your fingertips.

For your billing process, two numbers to keep an eye on are invoice counts and invoice hours reconciliation. The Invoice Count pod shows you the number of invoices you’ve created in a given month and how many have been sent out or closed. The Invoice Hours Reconciliation pod compares the amount of time entered into ConnectWise Manage by staff against what’s been invoiced.

2. KPIs to watch

Along with your invoice numbers, there are key performance indicators (KPIs) you can use to ensure your techs’ time is making you money.

The first is the Percentage of Billable Hours. Your goal as a business is to make money, and when your techs are spending time working on non-billable work, you won’t be meeting that goal. This number ensures your techs are spending the right amount of time on billable work that can increase your revenue. The calculation for the Percentage of Billable Hours is:

Employee Billable Hours/Total Hours
You want to be in the 65-75% range, with best-in-class service providers reaching above 75%.

The next KPI is Resource Utilization. Simply put, you want to make sure your employees are booked up, busy, and working on billable projects. Your employees are one of your most valuable resources, and you want to make sure those resources are being used wisely. The calculation for Resource Utilization is:

Utilized Time/Total Time
Average utilization is anywhere between 50-60%. Best-in-class service providers are hitting marks at 80% and above.

3. Third-party integrations to explore

The ConnectWise marketplace is stocked with solutions that enhance the power of the platform with additional features and functionality to help you deliver better customer experiences. ConnectBooster seamlessly integrates with ConnectWise Manage and ConnectWise Sell enabling a unified payment gateway and the ability to accept automatic or direct payments online and customize invoices. Through this integration MSPs can reduce PCI risk by allowing customers to save their payment information directly to our secure storage solutions thereby eliminating the risks of handling and storing sensitive information locally. Overall, this integration is designed to decrease customer confusion and invoicing questions to your accounting department as your customers can view their open invoices and payment history online anytime, day or night.