The month-end billing session
At the end of each month, the partners sit down with the WIP report. Page after page of jobs, some finished weeks ago, some still in progress, some with time recorded that nobody is sure can be billed. Each partner works through their own list when they get a chance. Some bill promptly. Some put it off because a client is difficult or the time looks too high.
Meanwhile, the practice's bank balance tells a different story from the fee income on paper, and debtors are only half the problem. The other half is work that was never billed at all.
Billing waits for a decision nobody is prompted to make
In many practices, finishing a job and billing it are separate events with nothing connecting them. The job is marked complete, and the invoice happens later, when a partner reviews the WIP. If the partner is busy, it waits.
Time recording adds friction. On fixed-fee work, recorded time may be higher than the fee, and deciding what to write off feels uncomfortable, so the decision is put off. On time-based work, the partner wants to check the time before billing, which means reading through entries. Either way, the easiest thing to do is nothing.
Partners also differ. Some bill as soon as work is done, others wait until they have time to review everything at once. The practice's cash position ends up depending on individual habits rather than on how much work has been completed.
What slow billing costs
| Issue | Effect |
|---|---|
| Finished work unbilled | Cash tied up for weeks or months |
| Billing in one monthly session | Invoices delayed by up to a month |
| Write-off decisions postponed | WIP that is not really recoverable |
| Clients billed long after the work | More queries and slower payment |
| No view of lock-up by partner | Hard to see where the problem sits |
Staff notice too. When their work sits unbilled for weeks, it feels undervalued, and the link between their effort and the practice's income becomes harder to see.
How we connect finishing a job to billing it
- When a job reaches the stage your practice chooses, such as filed or client approved, a draft invoice is prepared automatically in your practice management or accounts system, for example Xero Practice Manager or Xero.
- On fixed-fee work, the draft uses the agreed fee from the engagement. On time-based work, it uses recorded time and rates, with a summary of the time for the approver.
- Drafts are routed to the partner or manager responsible, with a short list of the day's drafts rather than a monthly report. Approving is one click, and edits are recorded.
- Where recorded time differs from the agreed fee by more than a margin your practice sets, the difference is shown and the approver records a decision, so write-offs are made at the time, not months later.
- Drafts not approved within a period you set are escalated to the managing partner.
- A lock-up report shows unbilled WIP and unpaid debtors by partner, client and age, updated daily.
Partners still decide what to bill and what to write off. The system makes sure the decision is prompted when the work is finished.
Billing becomes part of the job
Invoices are prompted when work is finished rather than at month end. Write-off decisions are made while the job is fresh. Clients are billed while they still remember the work, which tends to mean fewer queries. And the practice can see exactly where cash is locked up and who needs to act.
Is this how your WIP looks?
- Billing happens in a monthly session
- Finished jobs sit unbilled for weeks
- Write-off decisions are postponed
- Partners bill at very different speeds
- You cannot see lock-up by partner at a glance