Time Management and Invoicing for Professional Services Firms
The truth is, everybody comes to work to make money. Work can be fun. There’s camaraderie in a professional services firm with like-minded people. There’s satisfaction contributing to a job well done, working with happy clients and many other positives.
But if you had money elsewhere, you’d choose when you worked and when you didn’t. Money is the difference and it’s why we come to work every day. Businesses only work, and people only work in them for as long as there’s money to go around.
So you’d think all professional services firms would be closely managing where the money comes from. And you’d think how it is managed from the get-go would be an important aspect of the business, given serious time and commitment from the highest management echelons in the business.
Managing Billable Time
However, this is not the case. If actions speak louder than words, the money-go-round is often not well managed at all.
Don’t beat yourself up about it if you feel you’re in this boat. This is an opportunity to gain a big competitive advantage.
You love getting the chance to pitch for those big deal jobs from time to time? Take a look around. Research shows that on average professional services firms write off some 26% of their potential fees. That is, for every $100 in fee value, they recover only $74. That’s not some firms. That’s on average! And it’s not one of those ‘overseas’ studies. It’s right here, down under. One of my earlier blogs talks more about this.
If you weren’t writing-off you could be earning over 30% more in revenue without any extra effort. And that could well double your profits. That means every job is a big deal job. That’s a very big deal.
Professional Services Business Management
Sure it’s important that the invoices are raised, payments received, and the taxes, payroll and other transactions are processed on time. But they’re done all after the fact. Managing these is not the be-all-and-end-all of professional services business management. And it’s certainly not all there is to money management. It’s only the accounting.
Imagine driving forward in your car by only looking out the rear window. You only see where you’ve been. You can only react to what’s happened to try and keep on track. You wouldn’t try this at home!
It’s much easier driving a car looking forward. It’s exactly the same in running a business.
The real money is made long before the accountant does the counting. Because by the time the invoice is cut it’s already history. The real money is made in the scope of the job being understood by everyone, internally and externally. And it’s made by managing the job as it progresses from day to day. Indeed from hour to hour. That means managing billable time.
This is an opportunity to gain a big competitive advantage.
You don’t have to become obsessive about it. The fun and camaraderie doesn’t stop. A decent time billing system simply helps you to professionally manage your business as you deliver your professional services. Being aware that time counts means a 12 hour job is done in 12 hours, not 20. And if by the time your staff are up to 6 or 9 hours through a 12 hour task, they’re letting everyone who needs to know that it’s not achievable within 12 hours. Like any sporting activity, it’s about making your time count long before you get onto the field. A decent time management system will help no end. It isn’t just about counting your time. It’s the operational management tool the business relies on. Those using it report makes a huge difference in their businesses.
That’s proper time management. There are multiple benefits. The client gets their deliverable on time. The next client also gets their deliverable on time. And you make more money. Simple as that.
Wouldn’t it be amazing to get supported in your business by a great time management tool? Find out how our expertise in professional services time and project management software can add value to your business.