By implementing an effective project billing process, you make sure you’re paid (on time) for the hours you and your team have logged in. Delays in payment can put your business at risk, limiting your access to cash flow and hindering growth, so you need to act quickly if you want to improve financial management.
Invoicing is realized via an on-account setup, which is commonly referred to as a billing schedule. If the agreed-upon price for the job remains unchanged throughout the project, the billable amount is calculated per project or contract. When it comes to time and material projects, you take how much work has been done and multiply it by your hourly rate.
Billing, including billing clients and chasing payments, takes a lot of time, and its repetitive nature makes it error-prone. To save yourself valuable time and money, have a straightforward project billing process in place. It’ll give you and the team something to refer to, not to mention that it’ll keep everyone in sync. So, what steps can you take?
Base Your Estimate on Data from Past Projects
A quote isn’t legally binding unless it’s part of a contract. Regardless, it’s a crucial tool for your business, especially if you’re selling products or services where each job is different. A client demanding a quote is a good sign because it indicates they find your solution valuable enough to consider it. The components of a quote include buyer and seller business information, the date of issue, what will be provided, the breakdown of cost, applicable taxes, timelines, payment terms and conditions, and signatures. Preparing an accurate estimate is of the essence, whether it’s for internal work or a client.
So, you’re sure you can get the job done by the promised time and under budget. When figuring out what to charge a client for a specific project, look into your history. Data from past projects is more valuable than you think, so take the time to identify similar projects, get an idea of the costs incurred, and use the same approach. From now on, keep tabs on everything you do – relevant tasks, who’s responsible, the hourly rate, and the average time needed to complete the tasks. Above all, be aware of deviations between projected and actual project costs.
Set Your Terms and Conditions in Advance
Payment terms and conditions help you mitigate the risk of non-payment, offer protection against chargebacks, and restrict access to content until after the customer has paid. Set expectations for payment ahead of time and negotiate if needed. The worst thing you can do is wait until you send a bill to ask for payment within 30 days.
If you’re taking in a big project, simply ask for upfront payment to have a guarantee they’ll follow with the rest of the debt. Think of it as a deposit. The client can pay for part or all of the commission (the ideal scenario) before the project is finalized.
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Automate The Billing Process
You process countless invoices every year, so it’s not such a bad idea to automate the billing process. The software system defines, qualifies, and automates the creation and sending of invoices to clients on a one-time or recurring basis. It supports both agile and traditional management, meeting your workflow requirements and accommodating specific client needs. As such, you’re able to customize your invoices to include the most important details. Billing software gives project managers and accountants much-needed visibility and makes the process quicker, easier, and less prone to error. It’s an all-in-one suite that changes how the business works.
There are numerous solutions out there, each with different capabilities; some of them are great, but others aren’t so great. If you want to monitor a project’s progress and task billability from beginning to end, sign up for a Timesheet Portal account. Its billing software for timesheets makes it easier to track the hours worked and bill accordingly. Suppose you hired freelancers. In that case, you can verify the production work and make the appropriate payments. You can bill in multiple currencies, not to mention that the software solution integrates with popular accounting solutions. Ensure better accountability and build trusting relationships with your clients.
Offer A Variety of Payment Methods
By offering a wide range of payment methods, you retain existing clients and attract new ones, increase your brand’s credibility, and keep your cash flow topped up at all times. Some of the most popular payment methods include:
- Cash. Many believe that paying with cash helps better control spending. In a card-obsessed world, cash is still king. While you don’t have to wait for credit card payments, you still have to deposit the money into a bank account. Keeping large amounts of cash at hand is dangerous.
- Credit card. Some people use credit cards for all their transactions. Allowing customers to pay via credit card eliminates delays associated with waiting for payments and simplifies managing cash flow. You’ll need a payment processor or a payment service provider – and a payment gateway.
- Bank transfer. Funds can be easily moved through bank transfers, so request a direct transfer from your client’s bank account to your business account. Most businesses use bank transfers to collect payments. To receive money, provide your bank account info to the person/business sending the money.
- Mobile payments. You can process mobile payments in the blink of an eye, which translates into more income. Sensitive data is completely safe. Peer-to-peer payments are enabled by platforms such as PayPal, so users can send money via their smart devices.
- Cryptocurrency. If you accept crypto payments, you get paid instantly, from anywhere in the world, without high transfer fees. The blockchain stops clients without the necessary funds to make a payment, so you don’t have to worry about chargebacks. You can exchange money directly from one wallet to the other.
Discover the many ways your clients prefer to pay to determine what payment methods you need to offer.
All things considered, it’s not hard to improve the efficiency of your business and increase productivity. Have professional conduct, minimize disputes, and lend a positive image to the brand.
