5 Ways to Reach 30-35 Billable Hours Every Week

5 Ways to Reach 30-35 Billable Hours Every Week

Billable hours are the lifeblood of any professional services organization.

The more billable hours your consultants log, the more successful you’ll be!

But It’s easier said than done… For a variety of reasons, consulting and professional services firms often don’t record as many billable hours every week as they should.

If your consultants aren’t billing 30-35 hours every week, here are some things you can do to improve the numbers:

1. Clearly Communicate What’s Billable and What’s Not Billable

What’s billable and what’s not? Getting this right is one of the fastest ways to increase the number of billable hours your consultants deliver every week. Do you bill for communication time? Emails? Phone calls ahead of a consulting gig? What about the time spent preparing materials for an on-site visit? Often these activities are not billed to a client. Some of them could be billed. But only if you clearly set expectations with your clients during the sales process.

2. Use Communication Checklists

It’s easy to tell your sales staff to “clearly communicate” with prospects. It’s not easy to get them to actually follow through. The easiest way to ensure communication happens is to give your sales team a checklist of items to cover with new clients. Require that they use the checklist with every new customer, check off the boxes, and turn it in with all purchase orders. That way clients aren’t surprised (or upset) when they see the items their invoice later.

3. Take Administrative Duties Away from Consultants

Consultants are often burdened by countless administrative duties. Emails, phone calls, planning sessions, internal conference calls, quarterly check-in calls, appointment confirmation calls, and on and on.Some of these things are necessary. But some could be delegated to administrative staff. The more “non-billable” activities you can take away from your consultants, the more money they can make for you.

4. Assign Team Members Based on Skills and Availability (Not Just Assigned Accounts or Territories)

Out of convenience, leadership in many service delivery firms assign work based on territories, size-of-company, or pre-existing relationships. While common, these approaches can easily lead to major workload imbalances a your consulting or professional services team. One team members might be booked for months. Another might be sitting around watching training videos. There’s nothing wrong with training of course. But with a bit of planning, most consulting teams could do much better at allocating their resources. This is one way using a professional services automation (PSA) tool can lead to major improvements in revenue.  In Klient Software’s PSA solution, resource planners can see everything they need to know to assign resources—all at a glance. Each consultant is tagged with his or her specific skill set. And a visual, drag-and-drop calendar makes it easy to make assignments—in a way that maximizes the resources you have available.

5. Enforce the Use of CRM and PSA Tools

The tools you provide your team can provide significant increases in efficiency (and revenue) if utilized. The easiest way to enforce the use of the tools you provide your team is to say: “If it’s not logged in the system, it didn’t happen. “That’s usually motivation enough to get your team to use their CRM or PSA tool—especially if they’re paid on commission or eligible for bonus pay for performance.

So… What can you Do ?

  1. Take some time today to evaluate the number of hours each of your consultants are billing.
  2. Even better, set up a regular report that tells you the average hours your consultants bill every week.
  3. If the average isn’t 30-35 hours per consultant, it’s likely you’re leaving money on the table. Use the tips in this article as a starting place to improve your numbers—and your revenue.

… and if you want the ultimate shorcut, why not scheduling a  Klient Demo?
You’ll will see all the amazing features klient has to offer, including the one to “Make your billing easier”.

Stay sharp! – Klient team

How To Reduce Revenue Leakage for Professional Services Invoicing

How To Reduce Revenue Leakage for Professional Services Invoicing

On the surface, invoicing for professional services organizations seems like a simple concept.

For services organizations just starting out, oftentimes it’s as easy as downloading an Excel invoicing template for consulting services, punching in your hours and rate, rendering a services invoice, and sending it to the client.

However, as services teams grow past 25 consultants, firms begin to focus their attention on streamlining the invoicing process. But quite often, even some of the largest professional services organizations are still approaching the vital task of invoicing incorrectly. Given that invoicing directly affects cash flow for a business, it seems like something that organizations should dedicate time to getting right, yet to this day perfecting the invoicing process continues to be put on the back-burner by many services teams.

Excel Invoicing Templates Are Not Enough

There’s a time and a place for Excel – but invoicing is not it. A key trait of any growing services business is the ability for top management to solve problems quickly and efficiently. Talk to anyone who has spent time managing a professional services organization and they will tell you that they spend most of their time “putting out fires.” As a result, Excel becomes a manager’s go-to fire extinguisher–it’s easy to understand, it can get the job done quickly, and it’s flexibility allows you to make things look the way you want. When it comes to invoicing for services work, however, that is where the benefits of using Excel end.

The invoicing process can be a tedious one. Even one small mistake could cost a business tens of thousands of dollars, often without anyone even noticing. And, the process can occupy a lot of time and resources if not done efficiently. With Excel, every step of the process – creating, proofing, approving, adjusting, and sending invoices – introduces inefficiency.

Not only is using Excel for invoicing labor intensive and error prone, but the manual processes can also reduce visibility and transparency for senior management who need insight into the performance of the business.

If Not Excel, Then What? 

When it comes to replacing Excel templates, invoicing software seems like the obvious answer. But for professional services businesses, invoicing software isn’t usually offered as a standalone solution. Most commonly, it is part of a financial management solution, a time and expense tracking tool, or a professional services automation (PSA) suite. A typical and costly mistake that many services teams make, is selecting a type of invoicing solution that is unable to accurately support the needs of their business.

Financial Accounting Software

When thinking about generating invoices, financial accounting solutions seem like a natural starting place. That said, for professional services organizations invoices are more about people and projects than they are about simple debit and credit transactions.

If a services team plans to grow past just a few consultants, or is already well past that size, it’s probable that the organization will outgrow their accounting system quickly and won’t be able to rely on it for generating invoices and tracking project progress.

This doesn’t mean, however, that invoices for professional services work will not need to find their way into an accounting application to track receivables, cash flow, and outstanding balances. To accomplish this, it’s best practice to leverage a solution outside of an accounting application to generate invoices that can be integrated back to a business’s financial accounting solution. Robust solutions will have pre-built integrations to some of the most popular accounting packages, allowing data to flow seamlessly from one application to the other.

Time And Expense Software

Software designed for time and expense tracking is a much more natural fit when it comes to the invoicing process for services teams. These tools are better developed to manage people and projects and make it easier to translate activities into the financial components of an invoice.

However, time and expense software is not without its limitations. Missed or forgotten transactions, for example, can be problematic with a time and expense tracking tool. If the software a business is using is not able to recognize when a billing milestone has been achieved, it can go un-invoiced for quite some time, creating revenue leakage and reducing cash flow as a result.

Professional Services Automation (PSA)

For services organizations achieving growth, the only real answer when it comes to the right tool for invoicing is a professional services automation software.

A PSA software is a project management and resource management software rolled into one easy-to-use platform. The value that PSA software brings to the invoicing process can be seen in both reduced revenue leakage, and increased efficiency.

Reducing Revenue Leakage:

Consolidating invoicing and time tracking into the same system helps to eliminate revenue leakage. PSA software takes the process a step further by focusing on collecting all of the time that can be billed, and ensuring it reaches the invoicing process. Robust PSA solutions will have a detailed understanding of how much time is anticipated in a given period. Based on project schedules, a PSA solution will alert project leaders when things aren’t going according to plan. More importantly, a PSA solution will understand the difference between earning revenue and sending an invoice. This helps to recognize revenue properly on fixed price work.

Driving Efficiency:

A PSA solution will also allow project managers and finance teams to model exactly how they would like to bill their clients up front. With so many different contract terms available, this allows the organization to seamlessly complete the invoicing process in whatever manner suits them. Finance teams can complete the invoicing workflow quickly without the headache of manual processes. More importantly, this structure drives accountability throughout the entire invoicing process. Finance Managers and CFOs are provided a detailed view of exactly what has been billed, how it has been adjusted, and what is still being waited on. This helps streamline the business’s month-end processes and frees up valuable time and resources to focus on other important projects.

Perfecting the Invoicing Process With PSA

Through leveraging a PSA solution, organizations can reduce errors and increase efficiency, while also ensuring that cash flow follows closely behind work being performed. And, as the business grows, they offer a scalable invoicing process which means fewer fires to put out.

Revenue Recognition For Professional Services Organizations

Revenue Recognition For Professional Services Organizations

Revenue recognition is an accounting principle, which refers to how revenue is treated or recognized.

While relatively straightforward in many sectors, revenue recognition can be a particularly complex matter in professional services, due to factors such as work being done under an array of different contract models along with complex deliverables.

Organizations are required to account for billed vs. unbilled receivables and deferred vs. recognized revenue, based upon the specifics of each sales contract.

Generally speaking, there are 6 different models of contract structures that a professional services organization may use. And, often times, they will use different models for various types of clients or projects, resulting in a more complicated revenue recognition process.

  1. Time and Materials Contract Structures
  2. Fixed Price Contract Structures
  3. Not To Exceed Contract Structures
  4. Retainer-Based Contracts
  5. Recurring Service Subscription
  6. Managed Services Contracts

In order to simplify the revenue recognition process, it is becoming increasingly common for professional services organizations to seek out a Professional Services Automation (PSA) solution that has revenue recognition functionality built-in.

How Klient PSA Can Help Simplify Revenue Recognition

With a Professional Services Automation solution such as Klient PSA, organizations can manage complex billing and invoicing situations by configuring rules that completely automate project billing—including fixed fee, billable rates, milestones, installment agreements, and recurring billing types.

Furthermore, users can also manage vendor bills and payments with ease. And, the services organization can recognize project revenue with revenue recognition templates and calculation methods. This allows the services organization to create multiple recognition rules per contract and project and simplify the process of revenue recognition.