By Mark Engelberg, TimeLinx
We know when we’ve “left money on the table” but usually all we can do is move forward and accept it. In the case of doing customer work, you’ve left money on the table because doing work at multiple rates is difficult to manage. But TimeLinx was built to overcome that. Tracking and controlling revenues and costs while delivering work is what TimeLinx is all about. Yes, we’re a project and service management tool but we’re much more than that.
Because what’s the point of delivering services if you can’t control your costs, or generate accurate invoices when the work is done? Of course, doing customer work is all about delivering the work on time and within an agreed budget. That gets you a repeat customer because you made them happy. But right now, today, the work needs to be profitable for you and allow you to know where you are at this moment so you can catch costly problems or overruns before you are too deep in the hole. If you can’t do that, you might as well have told the customer to go down the street to your competitor.
So TimeLinx created Billing Modes in the very first version of TimeLinx almost 23 years ago. Because our Billing Modes provide tremendous flexibility to charge different rates based on different job parameters, rather than settling for a single, simple rate because the bookkeeping is too difficult, and invoice creation is too time-consuming. By far, a single hourly or daily rate is how most businesses bill for work, often leaving a lot of cash on the table. If a Fortune 500 company could pay a higher rate than a small business for the same work, would you charge the higher rate if it was easy?
With the TimeLinx accounting integration “TAP” taking real-time values into your accounting system for billing and payroll, Billing Modes produce precise revenue and cost numbers for real-time job P&L’s, pro-forma invoices are eliminated, and time-consuming work approvals are fast and easy. And after 20+ years of doing this, our flexible billing design means we can tackle almost any situation. In multiple currencies, even.
So, let’s run through our 5 Billing Modes (or 6 if you include giving discounts for prepayment). It seems simple, but in each mode, setting the parameters is what makes the system work for everyone. I’ll use USD as the basis for these examples, but pick your currency.
And by the way, every job will have a Billing Mode, but the amounts can be different for every job.
Project Billing Mode: This tells TimeLinx to look at a specific hourly rate to charge for all tasks performed on this job unless the task has a special “flag” (there are many) to handle the billing or cost as an exception. Perhaps you charge the project rate for everything except travel, or project management. Yup, we got that.
Task Billing Mode: This tells TimeLinx to charge a different hourly rate for each Task in the job, assuming no exception flags. So you may charge $200/hr. for programming and $125 for training, and $150 for project management. Easy.
Consultant Billing Mode: Mary bills $200/hr. because of her experience, skill set, or seniority level. John is lower and Mark is higher (of course!). This Mode tells TimeLinx to look at the billing rate for each person who enters time. Of course, this rate can be different for every project and customer.
Fixed Billing Mode: All work on this project is billed for one fixed fee. So the number of hours, who did the work, or what kind of work was done is ignored unless there’s an exception flag. By the way, as work is done in this Mode, revenues don’t increase as work is done, but of course, labor costs do. More on how that’s done in Part 2.
Customer Billing Mode: TimeLinx looks in the Company/Account record for the TimeLinx Rate field and uses that. Unless there’s an override, of course. The customer record holds several other billing settings which I’ll review next time.
Retainer Billing Mode: Do you give a discount for a prepayment (retainer) for work? Does the rate vary based on certain factors? A certain number of hours, perhaps? Does it expire at the end of this year? All of that and more are set in the Retainer mode.
TimeLinx also supports non-billable (but trackable) work, weekend and holiday factors, overtime, time of day, milestone billing, travel exceptions, customer exclusions, and more. But I’ll save some of that for next time.
By the way for one 15-year customer, serving companies in 14 countries with more than 300 service people, billing used to take seven weeks to collect, calculate and construct their invoices. Now it takes five days.
If you have complex contracts among your customers or want to see if higher profits could be a reality, come talk to us. If we can’t do it, maybe a new Billing Mode is in store for TimeLinx. But the odds of that are unlikely!!
Like this article? Comments are welcome. Send to editor@timelinxsoftware.com.
