The smart money series: 5 ways you’re wasting money

money and savingsRunning a profitable business is as much about bringing in revenues as it is about controlling costs.  In service businesses, costs can get out of control in several areas where we don’t always pay enough attention. Here are five areas of concern that can have a big impact on your bottom line.

  1. Paper invoicing: mailing a piece of paper to a client costs more than one would think. There’s the cost of the paper, envelope and stamp, of course, but also the cost of the employee who is preparing the invoices to be mailed. Let’s look how the cost of paper billing stacks up, at 500 invoices per year:
    Paper: 5$
    Stamps: 0,61$ each, 305$ total
    Envelopes, 23$
    Employee time, 1 hour per month at 20$/h, 240$
    Total: 573$ per year, for 500 invoices
  2. Uncontrolled non-billables: these are less visible but not less costly. It’s the time the administrative personnel spends on a client file, the support technician helping the client fix a computer issue, the expenses we incur because of the client, but that we cannot bill, for example a visit on the client site with the technical expert and the account manager. Let’s look at the impact of a non-billable site visit:
    Travel time: 2 hours
    Meeting time: 3 hours
    Employee cost: 10 hours total, at a cost of 30$/hour, 300$
    Lunch with the client: 60$
    Mileage: 80$
    Total: 440$ in additional costs
  3. Non-reported billables: these are billable items that employees or consultants forget to report. For example, a 15-minute call taken while driving, or a couple of hours done at night from home for fix a problem for the client. Often, we simply forget to put these billable items on our timesheet. Yet, that is lost revenue for the business. At a billable rate of 120$ per hour, a couple of hours a month of non-reported billables represents 2 880$ in lost revenue.
  4. Non-billed billables: In this case, the time sheets and expenses were logged by the team, but somehow they didn’t make it into the invoice. Sometimes it’s because the billable items were reported late, after that month’s bill was sent, for example. Other times, it’s because the items were simply forgotten. Just like non-reported billables, non-billed billables stack up fast: 2 hours a month of non-billed billable hours, at 120$ per hours, and up costing 2880$ a year in lost revenue – plus you’ve paid the employee for the work, which at 30$ per hour amounts to 720$ in additional costs.
  5. Manual record keeping and invoicing: While Excel and Word a great office tools, they do not scale very well. Keeping time sheets, expense reports and invoicing records in Excel, then creating each invoice individually in Word and Excel from this data is not only a great source of errors, it’s also time-consuming. At Abak, our clients generally used to take twice as much time invoicing manually as they do now invoicing with Abak. These time savings help your business be more productive, and would delay the hiring of additional administrative staff.

What about you? Where do you see money being wasted in businesses?

Abak Earns QuickBooks Silver Developer Status

We are proud to announce that Abak is now available in the Intuit Marketplace. Abak has been integrated with QuickBooks for many years, sending payables and receivables, as well as payroll, to the popular small business accounting solution.

Abak’s small business management solution will now be visible to more business managers who need to organize, automate and simplify cost, revenue and profit tracking.

QuickBooks is used by over 4 million businesses in the world.

Problem with vendor credits transfer to QuickBooks

We have identified and diagnosed a problem with QuickBooks quick booksaccounting transfer of vendor credits.

In Abak, when a vendor credit is entered, taxes are computed by Abak automatically based on the taxes configured for the vendor. When the credit is transferred to QuickBooks, the QuickBooks API ignores the tax override sent by Abak and adds its own taxes. The result is a vendor credit with two sets of taxes: taxes from Abak, and taxes from QuickBooks. The vendor credit must then be corrected manually in QuickBooks.

This problem occurs only with vendor credits, and not with regular vendor invoices. This problem does not affect client invoices, client credits, vendor invoices, expenses, or any other item transferred from Abak to QuickBooks.

The problem is caused by a bug in QuickBooks’ data transfer module, known as QBFC. You can read developer forum threads here and here for more details on the problem.

Until Intuit fixes the QuickBooks transfer module, there is nothing that we at Abak can do to eliminate the problem.

Thanks for your understanding!

12 questions to answer before choosing a time and billing system

Tommy Dodgen, age 4, standing by the largest lamp in the world: Tampa, FloridaBefore starting your search for a time sheet, invoicing and project cost management system, several requirements must be established to help you narrow the choices down and make sure you look for what you really need.

Besides the software’s features and pricing, several other criteria should be included in evaluating solutions: usability, scalability, customer service, etc.

Twelve questions you should answer before choosing a time management solution

  1. Do I only need a simple time sheet and expense report application, or a centralized, integrated solution?
  2. How reliable is my current time sheet and expense report system? How do I control my projects’ profitability?
  3. Should the solution allow for project management and project budget control?
  4. Should the solution allow complex projet structures, with phases and sub-tasks?
  5. Should the solution allow for setting budgets at the task level within a project?
  6. Should the solution allow for both billable and non-billable items, should it support cost and sell rates?
  7. How flexible should the software be when it comes to rates? Should it allow special rate per project, per task, per employee, per time period, per role?
  8. Should the solution integrate with your accounting system and payroll?
  9. Which reports will you need to manage your projects? Can the solution provide those reports?
  10. Can your invoice formats be reproduced within the solution?
  11. How closely should your software vendor work with you? How will you add/remove licences, customize reports and invoices?
  12. Will you need a web-based interface to log time and expenses?

What’s your invoice DNA?

Capital City Dairy Company

Everyone invoices differently. In the professional service field, it’s even more varied: we have fixed contract invoicing, time and material invoicing, mixes of both. We can invoice at the end of the month for work done, or invoice when a milestone is reached, or even invoice when a phase of the project is completed!

Let’s take it a step further: one client may require different invoicing. Some clients require a detailed list of the work done. Other clients prefer a simpler invoice. Sometimes, it depends on the contract: for one client, we might have one fixed-price project, and another time and material project.

It can be a nightmare. And it takes forever. And you can be sure there will be mistakes.

With Abak, you can setup different invoice formats to fit the different ways that you invoice. For each project, you can decide how to invoice the project. And the rest is Abak’s job. It saves and awful lot of time at the end of the month. In fact, our clients reduce their invoicing time by 60% on average. This means an invoicing run that used to take a week now takes only two days.

Think about what you could do with this time!

Meet us tomorrow at CGA Ontario Conference 2010!

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Abak is proud to sponsor this year’s CGA Ontario Conference 2010, held November 12, 2010.

CGA Ontario’s annual conference is the premier professional development event of the year. Conference 2010 is a “can’t miss” opportunity toadvance your skills, share your expertise and network with CGAs.

We’re looking forward to meeting you!