With intense competition in the sector, professional services firms cannot afford any inefficiencies in their operations. And as many firms are also still frequently stretched for resources, any delays between completing project work and receiving payments can quickly mount up to become a serious issue for service providers.
Getting paid on time should be one of the top priorities for any professional services firm. But this is a problem that is all too frequent, particularly for small and medium-sized businesses. Last year, it was reported by the Financial Times that the average small business – taking into account all sectors – was owed £31,000 in overdue payments, for a total of £30.2 billion across the economy as a whole.
Therefore, streamlining the process of calculating and delivering invoices should be a top priority for any firm. If clients are issued accurate, timely documents in line with previous agreements, a service provider will be in a much stronger position to get paid on time.
But this is often a process that is fraught with difficulties, as businesses are struggling with complex documents and manual calculations for working out timesheets, expenses and the cost of materials. When these operations are not adequately integrated, this can all add time to a project, reducing the chances of invoices being sent out in line with milestones or at agreed intervals.
Correctly identifying and invoicing the right amount for a professional’s time is one of the biggest challenges for many firms that are still labouring under traditional record-keeping and accountancy solutions. To work out the right amount, they may have to look through complex timesheets and determine how the hours worked will translate into costs.
As well as being a labour intensive process, this can be very time-consuming and many firms cannot afford these sorts of delays, which can have a knock-on effect on how quickly they are paid – and therefore negatively impact their cash flow.
Traditional methods may also be prone to inaccuracy, particularly if firms are dealing with multiple paper-based sources of data or your employees are filling in timesheets or expense forms long after the event – if for instance they have been working remotely.
Thinking about improving your business efficiency? Please don’t hesitate to get in touch with one of our team of experts.