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2007 Review of Time & Billing Systems

Time Is Your Asset: Manage It Wisely

From the November 2007 Issue

For many accounting firms, time is often one of the most valuable assets. This
is primarily because of its scarce nature. Even during tax season, there really
is no way to squeeze more than 24 hours out of a day (although, for billing
purposes and with rounding, you can actually get 25 or 26). But nobody works
24-hour days.

Of course, time is not a traditionally depreciable asset; not for tax purposes,
anyway. Try that and see how long it takes for the IRS to pay you a not-so-cordial
visit. But time, both your’s and the cumulative work time available among
the professionals in your firm, is an ever dwindling substance. In one sense,
it appreciates as it elapses, since it seems to be worth more when there is
less of it. But it continues to dwindle, nonetheless, until there is no more
to be spent. So you need to make the most out of it by actually treating your
billable time as an asset. Manage it, track it, plan it and, most importantly,
get paid for it.

professional tax and accounting firms do not bill by the hour for all tasks.
Certain routine services, many tax return types and other tasks are often charged
at a flat rate, while more complex processes like business consulting, planning,
audits and extended write-up are time-based. Obviously, keeping track of the
time and expenses incurred for these latter tasks is important when you eventually
submit your invoice to the client. But assessing the time your firm spends on
flat-rate services is important, since it can help you justify the rates, adjust
them as necessary, analyze profitability, and determine the productivity of
the firm and
individual staff.

These analytical functions are really more of a practice management function,
but are essential and can often pay for the cost of a time and billing system,
which can be fairly inexpensive, anyway. As an example, let’s say your
firm charges $300 for basic 1040 prep. Is your firm getting the appropriate
return for your time? First, you need to find the average time it took last
season to provide this service, which a time and billing system will track by
job code. You also need to determine average administrative tasks per return
for things such as scanning, invoicing, filing, making copies, and other overhead.
With this information, you can easily calculate the average cost per 1040 return
and see what your margin is on these services. You can also break down the profitability
of other services and see which employees or departments are most efficient.

Time and billing systems also include invoicing systems that convert the tasks
you’ve completed into itemized bills for your clients, allowing for multiple
billing rates based on the client, the staff member, the project or specific
task. The AR functions built into the programs manage aging receivables and
often enable the assessment of interest and sales tax. Since a key component
of these programs is reporting and invoicing, most also include client communication
tools, such as templates for collections, cover letters and instructions. In
general, time and billing systems serve to streamline the invoicing and processes,
and provide quick access to key business indicators that show how productive
a firm is across its entire range of client services.

Summary — Time & Billing Systems

Key Time & Billing Features

  • Time management
  • Multiple rates for staff, tasks, clients
  • Pass-through expense tracking
  • Invoicing & client communications
  • Integration with accounting and payroll
  • Detailed client histories

Advanced Time & Billing Features

  • Enhanced client/contact management
  • Project management
  • Customizable graphical business dashboards
  • Drilldown detailed invoices
  • Advanced analytical reporting

And all of the systems provide some measure of integration back into the major
small business accounting programs on the market, such as QuickBooks and Peachtree.
This allows professionals to migrate their invoicing data, client information
and receipts back into their internal firm accounting system. Many time and
billing systems also offer integration with Outlook for contact management information,
can output to Excel and Word for customization, and provide syncing with mobile
devices for remote entry of time and expense data.

But just as important as “user-friendliness” is to client-side
accounting programs, so too is it crucial to a time and billing application.
Although they can all be used after-the-fact, with time, job and expense data
entered at a later date, that process is about as effective as a client trying
to post transactions one or two days later. To get the most from a time and
billing system, all professionals should enter their time as soon as possible,
certainly the same day, if not immediately after a client engagement, phone
call or specific task. Some firms have an administrative person who manages
this process and, while not quite as precise as direct, live entry by professional
staff, it is still better than waiting until the end of the week and guesstimating
the information. Remember, even time spent tracking time and preparing client
invoices is billable to that client as an administrative cost.

Time and billing programs generally offer a “lite” version of
what full-fledged practice management systems offer, and often at a much more
attractive price point that can start at less than $300 for a single user. For
this investment, a firm gets insight into its productivity, streamlined billing
processes, better tracking of pass-through expenses, and more appropriate compensation
for client services.

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BQE Software Inc. — BillQuick
BillQuick 2007 provides small businesses with highly
customizable and flexible time and expense tracking, project management
and complex billing capabilities. Industry-specific versions are available
for accountants and CPAs, architects and engineers, computer and IT consultants,
and attorneys.
ImagineTime Inc. — ImagineTime
Time & Billing
The ImagineTime Time & Billing system offers
a combined time management, invoicing, AR, due-date tracking, tax tickler
and scheduling system initially developed by professional accountants
for their peers’ firms, but now also available for law offices and
other consulting-oriented professions.
Sage Software — Timeslips
by Sage 2008
Timeslips by Sage 2008 is a proven time and billing
product for both accountants and law firms, and it meets the needs of
the traveling professional through handheld and remote processing add-ons.
It is an excellent option for small service-based businesses that need
a workflow-based system or the ability to handle complex contractual billing

Office Tools Pro — Office
Tools Pro 2007
Office Tools Pro provides accountants and other
time-centric service professionals with time and expense tracking and
invoicing tools, along with other features designed to enhance practice
efficiency. In addition to the time, expense and invoicing functions,
the program includes integrated AR…
Software Technology, Inc. —
Tabs3 Billing
Tabs3 Billing Software Version 14.2 from Software
Technology, Inc. is a crossover product from the legal industry, accommodating
service-based professionals for 25 years. Able to handle complex hourly
rate structures and fixed fee contracts, it offers strong integration
with PracticeMaster, the company’s suite for calendaring, scheduling
and client management.
TPS Software — TPS Time
& Billing
TPS Time & Billing offers comprehensive time
and expense tracking functions along with invoicing capabilities. The
program, designed primarily for accounting professionals in small and
midsize offices, also offers contact management, calendaring, AR, due-date
management, client correspondence templates, managerial reporting and
web-based remote entry capabilities.