Posted by Sean MacKenzie on Thu, Jul 22, 2010
Small business owners often wonder why they should be using an online hours collection system like the one we have here at www.billzone.com. In fact, most owners
know they need a system like this but only some take the step.
Opportunity Cost The biggest reason is simple. If you are spending valuable time collecting hours from contractors and/or employees for billing to your own clients, then you are
not spending time either doing billable work for your clients, managing, or selling your product.
Usually the monthly cost of using BillZone to automate a 10 person team is less than a few hours of billing for one of the team's members, compared to one or two days worth of work for that member to do the task manually. For large enterprises, the benefits are even greater.
Accuracy If you are consolidating a whole bunch of time entries from a variety of sources like paper timesheets or Excel workbooks, then your chances of creating an error during this double-entry process go up. When collection is centralized, data is only entered one time, thus reducing errors.
Timeliness Speed up payment on your accounts receivable. Want your bills to go out on the first of the month instead of the 10th? Automate your process.
Posted by Sean MacKenzie on Thu, Oct 29, 2009
Changing over to a new tax scheme can be daunting for small to medium sized business
owners, but there are some things you can do in advance that can help.
Update Your Accounting System
Ensure your accounting system can handle the change. If it can't, make sure to plan a
changeover to a new system that can, or design a workaround so you can accommodate the
new tax.
Double-Check Invoicing
Check over your invoicing thoroughly at the time of changeover to make sure that you
have applied the tax correctly for each product or service.
Get the Team Involved
If you have a larger business, make sure to involve all the different divisions in a
discussion about the change. There will often be some expertise unique to different
departments that can help your transition.
Prepare Your Suppliers
Prepare your suppliers to expect the change. For example, BillZone allows your
subcontractors to generate their own invoice to you, which speeds up Accounts Payable
(they get their bills in on time) and Accounts Receivable (you immediately generate
invoices immediately from the same data). They might be surprised if the tax rate
changed on their invoice and they were not expecting it, or forgot to implement it
themselves.
Confirm the Date, and Find Out When You're Affected
Be sure of the changeover date, and check to see if you will be affected in advance.
For example, you might be required to self-assess for goods or services sold in advance
of the changeover date but delivered after. Also, this could affect the timing of invoicing for certain aspects of your business.
Posted by Sean MacKenzie on Thu, Sep 17, 2009
Making a Good Set of Categories
One of the most important things you can do when setting up your business on any kind of project management, expensing, or time-tracking software is to make sure you categorize your billing and expenses.
If you create a good set of categories in the beginning, your small business will really benefit down the road. You will be able to see important trends on how you ran your business in the past, and these will help you plan for the future. They will also help to simplify management of your general ledger (GL) and accounts receivable (AR).
Business Items
The first set of categories you create should include a set of items for the overall operation of your small business. These will not be related to projects you are working on, but generally account for "everything that is not a project". Usually, these will include some major categories such as Marketing, Finance, or Accounting. Within these areas, you might split the category into a few more, but generally that is where you would stop.
For example, you might add a few sub-categories like Market Research or Ad Design to the Marketing category.
Project Items
The second set of billing areas you can create will include your projects that you are working on for customers over time. Each project should have its own set of items and sub-items or categories. Your billing system should allow for projects to have multiple versions over time.
For example, you might write a small piece of software one year and then two years later do development to enhance the same software. If you do many versions over time, it is much easier to see statistics over the long run.
You should determine the kind of billing your project will need before you set it up. While some projects may have a standard set of items, others may need to have specific defined items created before you put your time and expenses against them. Make sure your system can do both.
A general contractor might simply put all his time against general items like Carpentry and Electrical, and this may be enough for his reporting purposes. Another contractor might need to specify exact items to bill against, like Breaker Box F, Switch Setup. A lawyer might set up project items for each contract or set of meetings they have been asked to do.
Get Advice
It may seem overly cautious to ask advice about which categories to set up, but it is also a good idea to talk with your accountant when setting up categories the first time. They will have good advice on how to set things up the first time, for both Business Items and Project Items.