2008 Review of Time & Billing Systems

EXECUTIVE SUMMARY: Tracking time is imperative, whether billing by the hour or fixed-fee. Time and billing systems offer analysis tools and measurement of employee and firm productivity. Automated invoicing provides greater detail for clients and internal review. Most systems integrate with popular professional and client-side accounting systems.

The one thing I have noticed is that it’s becoming more and more difficult
to track our time. We live in a multi-tasking electronic world. At any given
time, you may find yourself on the phone and answering e-mails, and those occurrences
happen one after another before you ever get the opportunity to turn on a timer.
Next thing you know, the day is gone and you’re left wondering where you
spent your day.

Whether you fix-fee bill, bill by the hour or use a combination of both, tracking
time is important. We track everyone’s time in real-time. It’s important
to know how much time we are spending on all of our engagements. As an example,
let’s say your firm prepares a 1040 and charges the client $400 for the
preparation. Does your current system provide you the information to bill the
client when the return is completed? Is all the time entered? What was last
year’s fee? Is there a reason you should be charging more or less this
year? What is the actual realized rate on this 1040 for the firm based on time
incurred? The answers to these questions provide valuable information as you
grow your practice.

Time and billing systems include the ability to invoice your client, track
the payment, age your receivables, and assess interest charges and sales tax.
You should be able to e-mail invoices from your time and billing system directly
to the client. All the systems I looked at included some communication capabilities
such as templates for collection letters.

Reporting is key to managing a practice. Most offerings provide several key
reports as a part of the system, where some will allow customization capabilities.
Time and billing systems serve as a valuable component to running a practice
today. Tracking time, invoicing clients, collecting receivables and reporting
were the key components I considered in this review. But I think today’s
time and billing systems have to do more. Firms are looking for programs that
allow them to integrate well with other components of running their office.

Most of today’s systems offer some level of integration back into small
business accounting market programs like QuickBooks, Peachtree and, in many
cases, Micro-soft Office Accounting. Many also provide integration with Outlook
for contact management. This is important as firms look to minimize the number
of databases they are trying to maintain.

Selecting our time and billing system was a very important decision (as I’m
sure it is to your firm, as well). Much of our staff’s day was going to
be spent within this program. We were going to entrust our key asset, which
is time, to this package, and our pricing and management decisions were going
to be driven by the results provided by the system. Whether you are evaluating
your current system or looking for a new system, my advice is to choose it wisely
and use it fully.

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Darren is a frequent guest lecturer at Indiana University’s Kelley
School of Business. He is a member of the Indiana CPA Society Board of Directors,
a contributing editor of The CPA Technology Advisor, and a national speaker
on the topics of workflow and practice management.

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