Deciding how often to bill your customers is key to running your business. You should select a frequency that helps you maintain a healthy cash flow while striking the right balance for your customer based on the work being done. Establishing the billing frequency helps you and your customer understand expectations for a project. As part of this, you and your customer should have a mutual understanding of how you’ll handle possible overruns and missed deadlines, should something occur. It’s your responsibility as the service provider to ensure these measures are in place to avoid any billing surprises.
4 Things to Consider Before Setting Up a Billing Process
It’s important to set the billing cycle to match the project work. You’ll want to consider the length of the project, the cost of the project, and whether the project involves phases or milestones. Another consideration is how to handle expenses associated with the project.
1. Length of Project
The length of the project is a factor when considering the right billing cycle. If the project is relatively short, say one (or a few) month(s) or less, you might decide to bill upon completion. This is a one-time bill for the entire cost of the project. If this type of project has a high dollar value, you may want to consider a weekly billing cycle so you can manage actual costs to budgeted costs. If the project is an ongoing project for services, you may want to consider a weekly billing cycle, especially if your customer is billing their customer in return.
2. Scheduled Billings (Cost of Project)
Large dollar value projects, regardless of the duration of the project, may be managed best by setting a scheduled billing for a fixed amount that represents a percentage of the project at agreed upon intervals over the course of the project. An example of this type of billing cycle is a schedule that bills for 50% of the total project amount at the beginning of the project and 50% at completion.
3. Phase/Milestone Billing
If you expect the project to run for multiple years, another option to consider is milestone billing. With this billing cycle, you invoice your customer when a phase/milestone is complete. If the amount of time between milestone billings is too large to support a healthy cash flow, you might consider a quarterly or monthly billing cycle. This allows you to recognize revenue while the expenses (direct and indirect) are being incurred.Shortening the cycle allows you better management of your cash flow’s INs and OUTs.
4. Project Expenses
Some projects require expenses, such as materials, licenses and permits, to be paid prior to starting the project, as well as other expenses over the course of the project. It’s important to establish with your customer who is responsible for covering these expenses. If you take on the expense with the agreement that your customer covers all or part of the cost, you should set a billing frequency for them that allows you to recover your costs in a reasonable time. If the project allows the billing to be passed through to the customer upon receipt, that provides the highest likelihood of quick payment.
Establishing a solid project plan, which includes expenses, and getting approval on all parts of the project prior to starting the work will create a solid relationship with the customer that allows both parties to plan for upcoming expenses. This eliminates surprises that catch either you or your customer off guard and potentially place the project at risk.
Billing Repeat Customers
While you might assume you will use the same billing cycle for established customers, this may not always be the case. As we’ve noted, you need to consider how variables change from project to project. It’s best to treat each project individually and negotiate the billing cycle as part of the pre-planning process. This avoids any surprises and leads to a stronger relationship with your customers.
Solomon is a proud sponsor of the 2018 Dynamics SL User Group, being held in St. Louis on April 23-26. Will you be attending?
If so, stop by our booth (32) in the Expo Hall and say hi to our representatives, Nicole Holliday and Pat Gibson.
Nicole is the Director of Sales & Marketing at Solomon Cloud Solutions. This will be Nicole's 19th time attending an annual SL (Solomon) conference since she first started working at Solomon Software in 1991.
Pat is a Senior Consultant and one of the first developers of Solomon Software. Since 1982, he has played an integral role in the support and development of Solomon I, II, III, IV, and the Dynamics SL product. Pat has lost track of the number of conferences he's presented at over the years, but it's safe to say he's been to a lot.
Pat Gibson will be presenting the following session on Wednesday April 25th from 1:30-2:30 p.m in room Parkview-Aubert:
Get the Most Out of Dynamics SL
Solomon Cloud Solutions is committed to improving Dynamics SL customer satisfaction and success. In this session Pat will present the following solutions to help you make informed decisions faster, improve collaboration, increase your productivity and reduce costs.
As the original architects of Solomon Software we have over three decades of software development experience and are always looking for ways to increase your productivity - this is a session you don’t want to miss!
While it may be too early to think about ‘Spring Cleaning’, the time for ‘Winter Cleaning’ is NOW!
If you’re asking yourself what’s Winter Cleaning, think of it as the ‘cleaning’ every organization needs to do in their ERP software at the end/beginning of the year. Just like Spring Cleaning, its purpose is to get rid of, or put into storage (aka archive) things you no longer use, but are not ready to part ways with entirely.
We can apply this idea to our ERP systems to ‘clean them up’ so they are optimized for day-to-day use. You will be surprised how much more efficiently your business runs when your software system is clutter-free. As you might with Spring Cleaning, if this task seems overwhelming or too time consuming, taking a room-by-room (module-by-module) approach can make it more manageable.
Updated 2/2/18 to include January 2018 Payroll Tax Table updates*
Year-end reporting issues in Dynamics SL tend to resurface every January. We've put together a summary of a few common issues/questions our support team receives, pertaining to tax year 2017 government tax filing and 2018 payroll tax withholding.
Please join us in congratulating Suzanne on her upcoming retirement.
Solomon Cloud Solutions is a proud sponsor of the SL User Group.
Solomon Cloud Solutions brings you tips on how to use the Dynamics SL 2015 SDK with VS 2015.
UPDATE 9/27/2016: The instructions below show how to use Visual Studio 2015 as a development environment for Dynamics SL 2015. However, you will not have access to the Code Inspector tool - Code Inspector was developed as a Visual Studio add-in, and add-ins are not supported in Visual Studio 2015.
Install the SL 2015 SDK
As a consulting and development organization working with Dynamics SL partners we have noticed an increased number of SL clients being infected with Locky (http://www.idigitaltimes.com/new-locky-ransomware-virus-spreading-alarming-rate-can-malware-be-removed-and-files-512956) and other ransomware viruses.
The most noticeable immediate impact for Dynamics SL users is that the following message starts to appear in a variety of places in SL:
Employers with greater than 50 employees are required to meet new IRS reporting requirements in 2016 to comply with the Shared Responsibility provisions of the Affordable Care Act. IRS Forms 1094-C and 1095-C are used to communicate health care coverage information to full-time employees and the IRS. Silver Brook’s ACA Compliance solution allows you to generate printed forms for distribution to employees and e-File IRS forms 1094-C and 1095-C.
Learn more about the ACA Compliance solution here: http://www.silverbrook.com/ProductDataSheets/ACACompliance.pdf
Solomon Cloud Solutions is trained and prepared to assist with the implementation of the Silver Brook ACA Compliance solution. Partners that have sold the Silver Brook ACA Compliance solution can contact us at email@example.com to learn how we can help you get the software implemented and the 1094-C and 1095-C forms prepared.