Question

1. Give an example of when you would use reimbursable expenses and billable time.
2. Discuss the benefits of Time and Billing.
3. Are there any difficulties of using Time and Billing? Why or Why Not?

Answer 1

1)Example:

Billable and Reimbursable Expenses

I work for a company where we have 1099 contractors who do consulting work. These contractors send my company a monthly invoice and detailed spreadsheet showing any expenses incurred (travel, meals, etc.) for their contracting jobs. My work then has to pay the contractor and then also bill the firm who hired that contractor. My question is- how do I mark an expense as billable and reimbursable if the original expense is not incurred by my company? I need to take the specific expenses and somehow track them as reimbursable to the contractor as well as billable to the client/firm.

2) Benefits of time and billing:

Record day-to-day work log

Every minute of your work is valuable and countable. Recording work hours in a day-to-day hourly manner on multiple projects can help you track your daily tasks. It becomes very easy to get distracted on other non-billable activities instead of focusing on billable work. At the time of billing clients, you may also forget or miscalculate the hours spent on designated tasks. With organized work logs completed in a timely manner you can avoid confusion and accurately generate bills with less effort.

All-in-one billing interface

Let us assume you have calculated the billable time, but need to include expenses before an invoice is generated, it becomes increasingly more difficult to split bills for each consultant and generate separate invoices based on their working hours. Time and billing software eliminates this confusion and reduces the effort on the billing process because it brings time, expenses, and projects together in one interface while including additional features like: dashboard, CRM, and reporting to simplify time-tracking activity.

Increased work productivity

Modern day time-tracking software has many features that can help users analyze the hours spent on projects and time spent on other activities. One of the best things about tracking time is that it gives you an overview on where you are spending your time so you can see how productive you or your staff are on different projects. Some businesses undervalue the possible benefits of time-billing software because they are comfortable with old traditional methods and do not know how to fully utilize the advanced comprehensive features. Irrespective of size, online time and billing software help businesses to accomplish multiple tasks including but not limited to: tracking workforce productivity or project management and accounting activities.

Get paid faster

Many people received delayed payments when traditional billing methods were in practice due to this being a manual process. In today’s environment, people enjoy getting paid faster on their invoices. Calculating billable hours on various projects, generating bills for that amount, and sending them to clients for approval can be a time-consuming process. By using integrated billing software, many businesses and consultants are able to streamline this work to make it less burdensome and convenient. All in all, billing software enables invoicing to be shared with clients online which will reduce delays in billing and ensure faster payments.

Avoid billing confusion with clients

One reason for a potential misunderstanding with clients is improper billing. These misunderstandings could occur due to a miscalculation that is inconsistent with client records, or perhaps the client has made some mistake in noting down the working hours, or someone could have possibly missed out some numbers while adding up the billable amount. This tends to be a sensitive situation because even a small error in billing could damage your business reputation. By using automated time and billing software you can avoid upsetting clients and reduce the risk of losing them due to a billing misunderstanding.

3) Difficulties of using time and billing:

1. Customer management

SaaS delivery businesses usually have a large number of users. The companies need effective ways to manage their users through keeping track and records of customers who sign up for their services. A recurring billing solution that offers an effective way of categorizing sign-ups, activations, trials, upgrades, and downgrades will go a long way in improving the efficiency of a company.

2. Flexible Billing Frequency

Businesses with a recurring billing model need an effective subscription billing solution that will enable them to receive recurring payments, reconcile and manage them at any frequency. And you will need added flexibility to offer different prices for different terms. The solution should be able to manage payments on a monthly basis, quarterly, semi-annually, annually or as required by the company.

3. Automatic invoicing

With potentially hundreds to thousands of customers likely to sign up for your start-up’s services, invoicing can be a headache. The situation is even more complicated if you are offering different levels of service or customers sign up at different periods. To solve this headache, look for a solution that can send automatic invoices to customers when purchasing a subscription for the first time, during renewals and after making cancellations.

4. Secure payments

Customers must be confident that their credit card data will be handled securely when they make payments at your website. Therefore, you should ensure a secure connection is available between the customer’s browser and your company’s web server. On the other hand, you need a billing solution that is PCI-compliant to ensure the safety of your customers’ credit card information.