Billing Steps / Work Flow |
12:07pm May 3, 2001 PST (#1 of 8)
Please outline the process that your company goes through to bill your client.
How do you determine when a client should be billed? What department generates the billing? Who makes this decision? Who writes the description for services? When is the description written? (When billed or when job is opened) What and/or who determines the amount (all marked up job cost vs. what the market will bare)
Please be creative and add questions, thoughts, and facts.
Thank you,
John McLaughlin
12:08pm May 3, 2001 PST (#2 of 8)
Our Process...
>How do you determine when a client should be billed?
- try to progress bill every client, not all clients go for that.
>What department generates the billing?
- Finance Department
>Who makes this decision?
- To bill the client? Most of the time it is the Account Supervisor
>Who writes the description for services?
- Account supervisor
>When is the description written? (When billed or when job is opened)
- When the job is initiated but could be changed.
>What and/or who determines the amount (all marked up job cost vs. what >the market will bare)
- Most markups are determined at the contract stage with client. Try to markup as high as you can go.
Ed Miller Business Manager Grafica, Inc.
12:08pm May 3, 2001 PST (#3 of 8)
Our Steps...
>How do you determine when a client should be billed?
Run job costs sheets monthly; provide to CSE who determines whether to bill or WIP
>What department generates the billing?
Accounting physically prepares the bill from info provided by CSE
>Who makes this decision?
CSE
>Who writes the description for services?
CSE
>When is the description written? (When billed or when job is opened)
When billed
>What and/or who determines the amount (all marked up job cost vs. what the >market will bare)
CSE
Pamela A. Brosch, CPA Chief Financial Officer HSR Business to Business Inc.
12:09pm May 3, 2001 PST (#4 of 8)
We bill...
> How do you determine when a client should be billed?
Media: We bill media at least one month prior to the month the media is to run. Whenever possible, we bill for the entire campaign based on a media estimate. We then reconcile the media costs vs. billings at the end of the campaign.
Creative Jobs: We bill 50% of the estimate as soon as we get the go ahead on a project. If there is not enough information available to do an estimate, we bill 50% of the budget. We bill another 40% of the estimate the day we deliver the project. The final 10% is billed when all vendor invoices have been received.
Public Relations (and all other monthly fees): Billed on the 1st of every month for the previous month. Timesheets (cost reports) with notes are pulled to put together a description of the activities for the month.
> What department generates the billing?
We use billing statuses to determine when a job should be billed. When a job is opened, the AE gives it a status for 50% billing. (Accounting prepares all invoices.) When the AE is notified that the job is completed, they will change the status to 40% billing. Accounting pulls job status reports daily and bills anything that shows up. We TRY to final bill jobs within two weeks of their delivery date. This occasionally requires us to call vendors for some lagging invoices.
> Who makes this decision?
As I mentioned before, all billing is generated by billing statuses entered by AEs. The amount of the billing depends on the actual hours vs. estimated hours on the job summary. If the actual hours are within the quote and any approved change orders, accounting creates a final bill for the quoted amount and gives it to the AE for final approval. If the hours are over the estimate, we have a 10% contingency. If the hours exceed the estimate and the 10% contingency, it raises a lot of questions. We pull job summaries often to make sure that we are "on track" on a job. If we're taking too long during one process, we should be going back to the client with a change order for additional money.
> Who writes the description for services?
Depending on the scope of the project, the description is written either by the AE or the Production Manager.
> When is the description written? (When billed or when job is opened) When the job is opened.
# We are C&P junkies. Using production and billing statuses and constantly watching the job summaries has made us much better at billing. Fewer billable hours falling through the cracks. It's rare that we go over on a job and are unable to bill for our time. If the client changes the direction of a job (i.e., he wants three photographs, not one) and we spend more time than quoted on the job, we present the client with a change order right then while they are aware of the circumstances. This keeps the client and the agency both aware of what decisions impact the cost of the job.
Tammy Lamb
12:10pm May 3, 2001 PST (#5 of 8)
We have just started...
>How do you determine when a client should be billed?
We have just started to do Work in progress billing at the middle of the month. If a project has a number of hours accrued, we bill the client for work to date. In the past we have waited until projects are complete, but on large brochure projects that tend to drag on for months, this isn't feasible. Often times, if a client has put a project on hold, this gives them the incentive to complete the project. Now they have expenses accrued and want to complete the job.
We try to bill media placements at the middle of the month and additions and/or changesto the media placements are billed at the end of the month.
Just before the 15th and the end of the month, the account managers request job costs reports from our AR person for jobs ready to bill. These reports are reviewed and we have a form we fill out for each line item to be listed on the invoice. These forms, with the job tickets are returned to our AR person to be entered into C&P. Prior to posting, she runs a billing preview. These billing previews are returned to the AE for final approval. Once the AE has reviewed the billing previews, we hand them in for posting and then sign final invoice.
>What department generates the billing?
Our media department does billing for all of our clients media bills. These are forwarded to the Acct Mgr responsible for the account who then approves the bills before they are sent to the client.
The account service people are in charge of billing their own clients for all other types of jobs. Assistant Account managers will provide the AR dept with the line item descriptions, billing amounts, etc. but it does not go to the client until the senior acct managers have approved the invoices.
We are working toward having ONE person in charge of all client billings. our plan is for this person to determine a VALUE billing system VS an hourly plus costs billing system. We are working to train our clients the value of the products and services we provide and get away from showing them what we actually have in each job.
Another concern is that we have too many variances in our billing with so many different people doing their own billing.
We do have a notebook that we have put together that gives us ranges for certain types of products. We refer to this when providing clients with quotes and give them "ranges" for price rather than a set amount. We are very specific about the number of revisions included in the quote as well as the other services we will cover for that price range. This gives us boundaries.
>Who makes this decision?
Ultimately the senior account managers are each making this decision for each of their clients.
>Who writes the description for services?
Each account manager writes their own.
>When is the description written? (When billed or when job is opened)
Usually when it is opened but it sometimes changes at the time of biling due to changes in direction since the time the project was opened.
>What and/or who determines the amount (all marked up job cost vs. what >the market will bare)
The account managers.
Are our billing procedures similar to your own? Do you bill straight from the Job costs reports? What other reports do you use in C&P when you prepare to bill a job?
Linda Anderson
01:12pm May 3, 2001 PST (#6 of 8)
We...
> How do you determine when a client should be billed?
50% upon job approval & 50% upon delivery per Terms & Conditions. Sometimes a job will have longer lead times and will require 50%/25%/25% billing.
> What department generates the billing?
Account Team starts the process by forwarding the signed proposal to accounting. Then when job is ready for final billing, Account Team generates a "billing package". This consists of a Job Progress Report and Job Cost Report (Account Team does not have access to costs). They review hours for internal labor and make sure external mark-up costs do not exceed estimate. The billing package goes to accounting for invoice preparation.
> Who makes this decision?
Account Executive or Team Manager. Director of Finance has final invoice sign-off
> Who writes the description for services?
Account Team prepares proposals. All descriptions transfer to invoice. Account Team will proof descriptions in billing package stage to be sure what was promised was delivered. Photography rights are spelled out in detail in this phase also.
> When is the description written? (When billed or when job is opened)
When job is opened if information is available. Updated throughout production if necessary
> What and/or who determines the amount (all marked up job cost vs. what the > market will bare)
Director of Finance determines mark-up and billing rates to achieve forecasted profit model. Principals determine "what the market will bare". Hopefully, what the market will bare is higher than mark-up!
Roxanne Cowan
01:12pm May 3, 2001 PST (#7 of 8)
In response to your questions, let me outline our billing procedures.
Around the third week of the month accounting runs job summaries for all open jobs in the system. These are distributed to the appropriate account people who approve the amounts to be billed, and also provide accounting with the descriptions that they want in the spec field on the invoice. In many cases, the account people actually email the descriptions to accounting so we can copy the information directly onto the job specs.
A few exceptions to the above are as follows. Occasionally, when it is time to generate billings an out of pocket charge is missing from the job or all hours are not in. In cases such as these, we may hold these jobs aside and wait for the charge to hit and then bill the job at whatever time of the month it is. Also, we bill our retainer fee clients on the first of the month for that month.
Decisions about markup, billing rates, write-offs, etc. are generally made by one of our two managing partners, who are also the senior account people on all accounts.
If you have any questions or require further explanation please feel free to contact me at your convenience.
Mike Montgomery Strata-G Communications
01:13pm May 3, 2001 PST (#8 of 8)
We are fairly new to C&P, so I don't feel like we have a great system yet - here are a few things that are working for us.
The AE determines that the job is ready to bill and changes the status code on the job ticket to 100. I have it set up that when a job code is changed to 100 (ready to bill) it generates an email to me. I then print the job progress report which goes to the ae for adjustment/comments. I generate the invoice.
The description is in the job ticket. The AE is responsible to be sure that this is the information that they want to appear on the invoice as we do grand total billing only. When you bill, if you select show job description, it will appear on the invoice
Susan B. Levey Business Manager Caudill and Associates, Inc.
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