how about better cash collection?
by roman h. kepczyk
studies done over the past two decades have clearly shown that there is a significant improvement in realization for firms that enter, release and post time and expenses on a daily basis. this process allows for daily or “hotel”-type billing that is sent out with the completion of each billable project.
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the next step in the evolution of time and billing systems provided real-time dashboards to report on firm activities and effectively allow firms to generate invoices. this can work only if all time and expenses for all personnel are captured within the system. while most firms have a daily time entry “policy,” the biggest abusers of the policy are often owners and managers, so it is about time for them to get on board and use the system.
as we keep stating, all professional staff today have at least dual monitors and the majority have the screen real estate of three or more. this allows users to have their timesheet open at all times and enter information throughout the day so that it can be reviewed and released before walking out the door.
this will require training and some adjustment on the owner’s part, but this is a first and most critical step when moving to daily billing and reporting. if management doesn’t get on board, they are wasting any investment in a new time and billing system. this choice can diminish the value of their practice.
“72% of firms were preparing the majority of invoices onscreen rather than using manual billing sheets and 6% delivered invoices electronically.” – cpafma 2019 survey
once everyone is on board with “live” time and expense capture, the firm will be in a position to create an invoice with the completion of each project. these time-capturing systems support both onscreen entry and onscreen invoice generation. with this information immediately available it is recommended that the “in-charge” for a client generates the invoice and the owner can then approve it onscreen for administration to process. by doing daily billing, the majority of invoices will
- go out faster,
- improve the cash collection cycle and
- leave a smaller volume of traditional month-end billing, mailing and paper sorting.
today’s time and billing systems can also generate invoices in a pdf (rather than physically printed) format. these can be emailed to the client as an attachment with or without password security. this significantly reduces the amount of administrative handling to print, stuff and send the invoice; delivers it directly to the client within seconds; and creates an audit trail of when it was sent out. when practice management is properly configured, the invoice delivery process can be automated to save the pdf and attach it to an email or portal to be delivered to the client, which is today’s recommended best practice.
recommended actions:
- mandate daily time entry, release and posting.
- provide training on daily billing processes.