Time & Billing, or Full Practice Management?
Many accountants use the terms "time & billing" and "practice management" interchangeably. These two classes of applications are related, but aren't the same thing. T&B is really a subset of practice management. It addresses several key and core requirements in an accounting or service firm, but often doesn't go as far in providing detailed information as a practice management system. Does this actually make a difference? Not for some firms, but it does for others. Picking the wrong application can lead to early dissatisfaction with the software and reluctance and resistance among staff and management to actually using it. If that happens, you've probably wasted your money in buying the software, and your time in installing and configuring it. The differences between T&B and practice management are subtle, and are often focused on intent, rather than outright features. T&B applications generally focus on the cash management functions of a firm. T&B captures billable (and unbillable) staff hours and expenses, invoices these out to the client that they are related to, and tracks the payment status of open invoices. The applications often also keep track of unbillable time, write-offs and work in process. But these are not the main thrust of the application. Rather, cash flow and revenue generation are really the core functions of T&B. These "other" aspects of staff productivity and utilization set practice management apart from time & billing. Practice management software also tracks accounts receivable, but extends beyond this basic practice requirement to accumulate other data that can (and should) be used to manage firm resource utilization. In many cases, T&B will be used in a smaller firm, while practice management will be used in a larger firm. Another popular scenario is using a T&B system as a front end in a larger firm. In this application, the T&B system acts as a data collection sub-system, feeding the data into the larger practice management system. This approach is often used when a firm is very spread out, possibly multinational, or when the core practice management system has been custom-designed and programmed. Using a packed T&B application as the data collection front end lets this type of practice rapidly adapt to changing staff and office conditions without incurring major programming and implementation costs. While many practices benefit from installing a full-blown practice management system, others do quite well with the more revenue-oriented T&B. One consideration is just how the application is currently handled in your firm, and what uses the output is put to. Time & billing is designed to capture and categorize staff time. Expense capture is often, but not always, also a function provided in the application. This data is posted to the proper client, and invoices and statements are generated, sent and tracked. Almost all of the T&B software available can perform these basic functions. It's in the details that packages differ substantially. Not every firm bills every one of its clients in the same way. Sonde clients get billed on an hourly rate, others get billed a flat or monthly fee. Some clients get billed one way for certain engagements and another way for other engagements. Some firms require a retainer from a client, others don't, or only require this retainer on the initial engagement. For longer-running engagements, your firm may want to accumulate work-in-process hours, and bill at certain levels of accumulated hours, on a monthly basis, or at some other standard. The T&B system that you select must be flexible enough to accommodate the way that you want to run your firm. Time & Billing Software Buyer's Guide:
Copyright 2003 Gale Group, Inc. ASAP
Copyright 2003 Thomson Financial Inc. Accounting Today May 5, 2003, |
back to OnlineSoftwareGuide.com Index