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Issue link: https://cpapracticeadvisor.epubxp.com/i/432767
TIME & BILLING Reviews Billing by the Hour or Fixed-Fee, Time Management is Essential By Isaac M. O'Bannon, Managing Editor O v e r t h e p a s t s e v e r a l years, two major factors h a v e s i g n i f i c a n t l y changed the way many f i r m s o p e r a t e , b o t h internally as well as how they interact with their clients. Te internet, of course, has something to do with this, but it is more in the way professionals are using it and the programs that have been developed to help them be more efective and productive. First, frms are moving more and more of their operations to the cloud. Not just one or two programs, but most or all of their core professional p r o g r a m s , f r o m t a x , t o c l i e n t accounting, to practice management and even their time tracking and client invoicing functions. Te second factor, the increasing move to value billing, was not enabled by the cloud, but it has dramatical ly grow n in popularity with many frms. As cloud-based applications and other programs have automated many of the functions that accounting frms used to charge clients for by the hour, many frms are facing the issue of re- evaluating what their various services are worth. Not the value of their time, but the value – to the client – of client write-up services, or a tax form, pre- paring fnancial statements, or other client ser v ices. The value i s not inherent in the amount of time that a professional spent doing a compila- tion or an 1120 return … it is the product itself. While some frms who have gone to this model have tried to move away from time and billing systems, this is a mistake for many reasons, particu- larly these two: • Firms will always need to provide cl ient s w it h item i zed i nvoices, whether the clients receive them on paper, by email or online. • W hile not billing by the hour, these f i r m s s t i l l n e e d t o e f f e c t i v e l y manage their sta f work load and time usage to determine produc- tivity and whether frm services are a p p r o p r i a t e l y p r i c e d . T i m e tracking and management sofware excels at this function, and cannot be sacrifced. Until about a decade ago, most accounting frms charged by the hour. While many still do, or at least do for some services, particularly audits, the transition to the value pricing model is similar to the move to "less paper" ofces that frms made a few years ago. It is here and it will keep coming. Furthermore, fxed fee pricing models will be expected by clients who may be considering your frm or another. Will they choose the frm that can tell them precisely what their monthly fees will be, or the firm that says, "Well, it depends on the amount of time it takes." However, whether a frm is using value pricing or hourly billing , a program designed for time tracking and billing for accounting frms, or a broader practice management system that also includes time tracking and invoicing functions, is still one of the central components of a modern practice. (See our 2014 reviews of Practice Management systems at w w w. c p a p r a c t i c e a d v i s o r. c o m / 11384725 ). Tis review of Time & Billing sys- tems looks at several programs that of fer var y ing features, including dashboard v iews of key business indicators, advanced sign-off and review processes, and even human resources functions for tracking paid time of accruals and ofering integra- tion with payroll programs. As with any program as core to a frm's productivity and management, the selec- tion of a time and billing system should refect how the frm currently manages its services, clients and staf. To achieve the best results from any such program, such as tighter control of billing and frm pro- ductivity analysis, all staf at a practice, from partners down, need to use the program reliably and consistently. ● Isaac M. O'Bannon, Managing Editor Isaac is the Managing Editor for CPA Practice Advisor. REVIEW SECTIONS BASIC SYSTEM FUNCTIONS • General navigation/ease-of-use • Designed for accounting professionals • Scalability • Hosted version/SaaS app TIME MANAGEMENT CAPABILITIES • Timesheets, timers, multi-staff views • Multi-staff entry • Time tracking by project/job • Approvals/sign-off process • Support for various hourly rates INVOICING FUNCTIONS • Expense tracking options • WIPs, budget-from-estimate • Accounting interface cash or accrual • AR management • Customization MANAGEMENT FEATURES • Dashboard overviews (aka snap- shots) • Managerial reporting analysis • Security features/user roles INTEGRATION & DATA MANAGEMENT • Data output options • Integration w/payroll & profes- sional accounting systems • Report writer or customization tool • Integration w/other apps (tax software, e-marketing, portals) HELP/SUPPORT • Built-in support features • System updates • Support website/documentation • Live support 18 December 2014 • www.CPAPracticeAdvisor.com