In this blog series, we covered how professional service organizations can track and manage a project's profitability, the best ways to forecast revenue, the benefits of managing your resources and how efficient time and expense entry increases your bottom line. Our final blog in our five part series will cover invoicing and financial system integration.
Delivering a successful project takes a combination of the right talent and the proper tools. Sales teams need to have enough visibility into past projects to build reliable and competitive proposals, project managers need a complete understanding of a project's health throughout the delivery process to make informed decisions, and financial managers need to be able to create, review and issue invoices as well as compare project performance to budgets and other metrics. But if you are still relying on error prone, manual processes to create invoices, your organization could be risking the overall success of the project right at the end.
A Successful Finish – Bill with Confidence
A professional services automation (PSA) solution works in conjunction with your existing accounting system – the granular financial and billing detail related to service engagements captured in a PSA solution can be directly integrated into the invoicing process allowing critical information to freely flow back and forth between applications. Detailed data captured in a PSA solution can provide your organization with a complete audit trail – resulting in greater accuracy in invoicing and financial reporting, fewer credits and fewer customer disputes. Professional services software can automate every aspect of creating the invoice including project hours entered by each team member, hourly billable rates calculated, additional expenses incurred while on the project as well as flag any discrepancies. The ability to provide greater detail and reliability ensures adherence to contract terms and conditions as well as financial reporting requirements.
A PSAs ability to integrate with your invoicing process is a critical component of a projects success. These benefits include the ability to:
- Bill for every hour worked and dollar spent.
- More frequent invoicing – get paid for your work faster.
- Track profitability on fixed price projects as easily as on time and materials projects.
- Manage payments received.
Complete integration means that your back office operations such as time and expense entry data is accurate and always current. Project times and expense amounts are viewed in real time, and the system will automatically calculate your invoices based on your defined billing needs, i.e. a fixed price project, a time and materials project, a cost plus or a milestone billing. In the end it's about cash flow – getting an accurate invoice to the customer so they have no questions and pay it quickly.
The Way Forward
Multiple non-integrated applications can quickly take on a life of its own, building walls between departments that fragment the organization. Aligning your systems into a single user interface is the glue that holds together the communication and analysis of your clients' projects – from their perspective as well as your own. With greater accuracy and controls in place, professional service managers can chart future projects for both current and prospective clients with a higher degree of confidence than ever before, and they can forecast delivery capacity requirements and costs, bringing greater predictability to the overall process.
Putting the necessary framework in place ensures that each successful project will translate into organizational growth for a viable and successful future. PSA brings critical business functions together into one solution driving long-term growth and profitability.
With foresight as well as integrated and flexible systems, professional service executives can optimize people, processes, streamline operations and fulfill profitable growth objectives. So, as you turn your attention toward planning for the upcoming year and you begin to set next year's goals, make sure a PSA solution is part of your strategic plan.