We have recently talked about some of the biggest mistakes of project management, and one of them was inefficient invoicing management. For companies that work on several different types of contracts or even have different invoicing methods for individual phases of projects, it can be extremely difficult to handle the project finances.
The best solution is to automate project invoicing with a tool centralising time tracking, project management, and invoicing in one place.
Invoicing clients is essential to any business, especially for a consultancy that sells hours instead of products. However, it can be very time-consuming to translate all the time spent on a project into the invoicing agreement.
When you use a tool that automatically synchronises the project finances with the tracked billable hours, costs and other expenses, creating an invoice becomes simple, fast and effective.
One-click invoicing eliminates lots of manual work. With one-click invoicing, you can create many invoices simultaneously, which means fewer clicks, and it saves the bookkeeper and the project manager time every month in the invoicing process. This means less administrative costs and more time to focus on other priorities.
With the time tracking tool and invoicing tool merged, team members have an overview of time spent on the project and how it translates into the remaining budget.
That way, the project manager can promptly react to any challenges, such as exceeding the planned budget.
The project manager always has quick and easy access to the status of any project and can whip up a status report in no time if the client requests one. This kind of transparency can significantly improve client relationships.
Having a better overview of the project helps you stay within the budget and timeline and creates the foundation to improve the project finances. Simultaneously tracking time and project finances makes it possible to avoid potential risks. Besides cutting costs on bureaucracy, it helps recognise opportunities to reduce other unnecessary costs.
Since you have all the crucial information regarding the project’s financial performance, you can allocate resources and budget more efficiently. Seeing exactly how the tracked hours, costs and other expenses correspond to the budget, you can identify a more profitable invoicing method to assure that all the work gets properly valued (for example, combining fixed price invoicing with a time and material contract for a particular client).
By automating your invoicing management, you get a better understanding of your project performance and cash flow, allowing you to see if any contracts need re-negotiation. Future plans, estimates and forecasts become more reliable, elevating finances and reputation.
Automating invoicing agreements is perfect for a consultancy and other organisations that invoice their clients based on hours and projects. They typically work on complex contracts, making it practically impossible to properly manage project finances without the help of automation.
Project invoicing in TimeLog, for example, gives project managers the flexibility to structure the project’s budget internally, without affecting the initial proposal and billing agreement with the client. This means you can allocate budgets effectively, regardless of any discrepancies between the contract value and actual time consumption. In TimeLog, you can easily manage eight different contract types (including time and material, fixed price invoicing, prepaid hours and service agreements) and an unlimited number of subcontracts on a project.
The entire project’s financial process – from the initial proposal, all the way to invoicing the client – is subject to human errors. Team members often rely on (inaccurate) memory to write down their hours, the overburdened project manager loses sight of overdue invoices, or forgets to update the bookkeeper with the final version of the invoice, and so on…
Automatisation reduces those errors. By using the same tool for tracking time and project invoicing, a project manager can make sure that no billable hours are lost, no payments delayed, and that everything gets included in the invoice.