What’s so hard about this? Just send out the bills and watch the cash flow in, right? Not necessarily. For project-based businesses, billing can present special challenges. Clients often specify exactly how they want to be billed and what the rules are for billing each project. Those rules may vary greatly from project to project. Your challenge is to be able to bill in whatever format your client wants.
Most generic ERP systems offer just a couple billing types. They’re designed for industries where clients don’t care what the invoice looks like. In the project world, that is not the case — you have to follow the client’s billing rules.
For example, one project may be billed at 25 percent of the total project fee for each of the next four months. Another project may be billed when key milestones are completed. Your billing tools need to allow for different billing rules to be established for each individual project.
Then there are the invoice formats. One client may ask for detailed invoices showing every task completed and every employee who worked on the project, while another client may be fine with a summary invoice that has no detail. Again, if you want the business, you must be able to address these client requests, and generic ERP systems simply can’t support flexible billing requirements, that most Professional Services firms must deal with.
When it comes to ERP systems and tools, project-based businesses have needs that are a lot different from other organizations. Each project is different, and a project based business must be able to manage each one effectively despite variation. For that to happen, ERP tools must be able to manage and track information at the project level.
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