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. Namely, with a tool with one-click invoicing options and a tool that centralises the time tracking, project management and project invoicing in one place. Here are 5 reasons why.
- It makes invoicing faster and more efficient
Invoicing clients is an essential part of any business, especially for a consultancy that sells hours instead of products. But it can be very time consuming to translate all the time that was 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 at the same time, 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.
- It gives a clear and reliable overview of the project’s financial situation
With 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 has the chance to promptly react to any challenges, such as exceeding the planned budget (TimeLog management tool even sends an alert before that happens).
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.
- It improves your business’ finances
Having a better overview of the project does not only help you stay in the confines of budget and timeline, it also helps you improve the project finances overall. 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 at your disposal, 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 not only your finances, but also your reputation.
- It makes it easier to handle many different types of contracts
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.
- It significantly reduces errors in invoicing
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 greatly 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.