In this blog series, we covered how professional service organizations can track and manage a project's profitability, the best ways to forecast revenue, and the benefits of managing your resources. Today, we'll take a look at professional services software and how it can support your organization's time and expense needs.
Increasing profitability is a primary goal for any business. For professional service organizations (PSOs), there are two main paths for increasing profitability – win more projects and expand their portfolio, or streamline operations. Revenue growth is the path most chosen, but without the tools and processes in place to efficiently deliver work, any gains in revenue will be lost somewhere along the way.
So how do you go about capturing every revenue opportunity? To start – make sure each hour and every expense gets billed. How many hours and resources has your organization spent on sifting through multiple spreadsheets, making updates and merging data? How confident are you in the final report? Using spreadsheets or multiple in-house tools to track time and expense leads to inefficiencies including inaccurate project status and costs/revenue visibility and risk. One mis-entered expense item can blow up an entire master spreadsheet, bringing operations to a halt. As an information worker you don't want to spend a lot of time on these administration tasks – but it has to be done.
Time and expense entry is a critical element of the project – it's how you are gathering budget information, as well as tracking what your actuals are. And no matter how well you track your project deliverables, if your time and expense capture is inaccurate, your project costs and service profitability will be inaccurate as well. Even more challenging to track are time and material projects, where that time actually drives your billing. Without an integrated timesheet management and expense reporting solution, your project-based business will not be able to effectively account for project costs, track budget versus actual, and analyze real-time accurate project time and cost information. Knowing your true project and service margins is critical to managing your organization's overall profitability.
Valuable Insight into Utilization and Project Cost Information
When it comes to timesheet and expense management, you need to make it simple for employees to enter hours and expenses. The more manageable the process, the more likely timesheets and expenses will be accurate and entered on time. A professional services automation (PSA) solution is business process oriented, rather than modular, allowing you to leverage the embedded workflow engine to generate event-driven alerts, facilitate collaboration, manage timelines and major project milestones. At the most basic level your information workers will be able to quickly and conveniently enter time and expenses to expedite billing cycles and the period close process.
PSAs automate the key underlying operational processes enabling you to capture time and expenses. These benefits include the ability to:
- Manage and submit timesheets for approval based on your organization’s processes.
- Track hours worked and allocate directly to projects or tasks.
- Submit timesheets and expenses on the go from any mobile device.
- Improve visibility, accuracy and control.
Integrating a PSA solution into your organization provides flexible, fully integrated control over your professional services resources. With a system that enables you to track time and expenses more completely, deploy resources and manage projects more effectively, project managers will have a clear and accurate project snapshot updated with the most current information available. A PSA solution gives you the power to focus on what's important: gaining the visibility and control you need to grow and manage your professional services organization and capture every revenue opportunity.
As we've walked you through the various stages of a project's lifecycle, hopefully you can clearly see the benefits of a professional services automation solution. In our final blog of this series, we will focus on cash flow – invoicing and financial system integration.
Guide - 5 Steps To Improving Disconnected Processes in Professional Services Organizations