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Digital agency billing software: Figure out your finances

minute read
Updated on:
March 10, 2024
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Billing might not be the most thrilling task in an agency. Yet, it plays a crucial role in ensuring a business is profitable and has enough cash flow to run its operations. As such, you have to stay at the top of the game to bill clients correctly and on time and maintain transparency in financial transactions.

When the billing approach is manual, it becomes stressful, complex, and prone to human error. It’s no surprise that 82% of small businesses don’t survive the first year because of cash flow problems.

Agencies that want to optimize their billing processes choose to use digital agency billing software. Besides making billing easier, it improves accuracy and efficiency by automating a chunk of billing tasks. This guide will provide a comprehensive understanding of digital agency billing software features, benefits, challenges, and more.

Understanding digital agency billing software

When it comes to the accounting side of a digital marketing agency, the importance of effective billing cannot be overstated. After delivering services to your clients, you have to ensure you receive accurate payment on time. This way, you’ll be able to meet your business expenses and pay your employees for their work.

A digital agency billing software automates the process of creating, sending, and tracking invoices based on predefined rates or project specifications. Moreover, this tool assists in managing client accounts by keeping comprehensive records of client information, project histories, and billing terms. The centralized database ensures that accurate and up-to-date data is readily available, allowing for smooth communication and efficient billing processes.

In addition, plenty of digital billing tools nowadays have time-tracking features. As such, you can determine the hours spent on a given project. This further enhances the accuracy and transparency of the billing process.

Understanding how digital billing works

Now that you know what digital agency billing software is, let’s get to the nitty-gritty of how it works.

Usually, the software allows you to set up your clients’ profiles and input contact information, billing terms, and project details for easy reference. When you complete a task or a milestone, the software automatically prepares an invoice based on the agreed criteria.

After preparing the invoice, the software allows you to send it directly to the client. In case the client forgets about servicing the invoice, the software sends an automated reminder to them. As such, you eliminate the risk of late payment or having to follow up on clients manually.

Digital agency billing software integrates different payment methods to facilitate invoice clearing, including bank transfers, credit cards, and online transfers.

Most, if not all, digital agency billing tools allow for the customization of invoices, including adding agency branding, itemizing services, and applying discounts or taxes. This way, you can maintain a professional image and reinforce your brand identity. Most importantly, you can create a cohesive experience for your clients.

Lastly, billing tools store your present and past data. It uses its analysis features to give insight into your billing trends, project profitability, and overall financial health.

Types of billing systems that billing software support

Each agency has its unique needs and preferences when it comes to charging customers. Digital agency billing software supports several billing methods to meet these diverse needs. They include:

Flat-rate billing

Flat-rate billing, also called fixed rate or project rate billing, involves charging a specified fee for a project. Once the price is set, it doesn’t change regardless of the hours spent and resources used. Some clients prefer this billing method because they know exactly how much they are going to spend on a project without worrying about additional costs.

Hourly-rate billing

As the name suggests, hourly-rate billing charges clients based on the number of hours spent on a project. Usually, businesses that use this method have a predetermined hourly rate. After achieving a given goal or completing the project, the digital agency billing software will multiply the hours and the hourly rate to find the billing amount.

For transparency and accuracy, the billing tool typically houses a time-tracking feature that employees use to clock in and out.

Milestone-based billing

Milestones are sub-goals within a project. When using this billing method, you bill a client every time you complete a predetermined milestone. Digital agency billing software tracks the project’s progress. Whenever you get to a given milestone, it’ll automatically prepare a bill and forward it to the client.

Recurring billing

Recurring billing happens after a predetermined period. It could be after a week, a month, or a year. In this case, you have to agree with the client beforehand on the billing schedule. This method is usually ideal for ongoing projects.

Key features of digital billing software

As mentioned, billing is a vital part of any business’s success. However, not all owners are able to handle their business financial obligations effectively. In this case, billing software provides a variety of features to ease the process, improve accuracy, and enhance efficiency. These features include:

Automated invoicing

Automated invoicing does away with the need for manual input to minimize errors and save time. It also consistently prepares and sends out invoices on time according to your business schedule.

Invoice consolidation is another aspect of automated invoicing. It assists in merging multiple purchases into a single invoice instead of sending many invoices to a customer.

Online payment

Billing software integrates with online payment methods, which allow businesses to accept money electronically or directly through the invoice. Such flexibility makes the payment process easier and faster while improving cash flow.

Some of the methods that billing software incorporates include credit or debit cards, bank transfers, checks, and PayPal.

Tracking expenditure

Nowadays, billing software includes expenditure-tracking features that enable businesses to keep an eye on how they use their finances. These expenses can be project-related, in which case the software includes them in the customer invoice. Alternatively, they can be business-related and included in internal accounting processes.

By tracking expenditures, you can quickly gain insights into the profitability of your customer projects as well as your business management costs.

Document sharing

Digital billing software allows employees to share documents with ease. As such, teams are able to collaborate on tasks and have access to documents in ready-to-print formats.

This software also provides a link through which customers can verify the accuracy of their information, as well as add or remove bits of it.

Safety and security

Billing software deals with critical business and customer information. Therefore, they have to ensure the safety of that data from hackers and breaches. Most software includes SSL encryption to prevent external sharing, as well as user authentication and role-based access controls to regulate data access.

Multi-currency feature

Digital agency billing software accommodates businesses serving international customers with a multi-currency support feature. It allows for accurate invoicing by auto-updating exchange rates across various currencies.

Template options

Varied template options are important features of billing software. These pre-designed templates allow you to complete invoices with different formats and content. Examples of templates include tax invoices and credit or debit notes.

The templates also enable invoice customization to reflect the business’s brand or match customer preferences.

Invoice monitoring

Other than generating invoices, billing software tracks their progress in the payment process. It follows whether the invoices have been sent, received by the customer, paid for in full, and which ones are overdue.

This feature also includes tax calculation to ensure compliance with tax laws and apply relevant tax deductions to invoices.

Audit and activity log

Billing software features audit and activity logs to ensure transparency and accountability in the billing process. These enable verification and tracking of user activity with regard to any changes made to an invoice and customer payment history within a specified period.

How to choose a digital agency billing software

For business owners thinking about blending digital agency billing software with their business, choosing the right one is key to financial success. But how do you select the proper software for your needs?

Here are factors to consider.

Ease of use

Most business owners, unless they’re also double as accountants, don’t enjoy financial paperwork and the math involved. As such, choose billing software that is easy to use and navigate.

Good software simplifies the work for you by automating tasks such as scheduling invoices and tax calculations. It should also have a friendly and straightforward user interface (UI).

The functionality of the software

Before getting software, check whether it has the necessary features to serve your business requirements. However, note that the functionality and design of software vary from one another. The “right” software largely depends on your personal preference as a business owner.

Syncing with existing tools

Third-party apps and tools, such as accounting software, including QuickBooks, time-tracking tools, and CRM systems, are crucial to business and project management. Reliable billing software should be able to integrate with these existing tools to simplify workflows, minimize redundancies, and eliminate duplication of information.


Every business aspires to grow its size and revenue. Therefore, when choosing digital agency billing software, it’s crucial to check whether it can handle huge and demanding billing workloads. Get one that can accommodate a larger customer base, more transactions, and more projects without necessarily sacrificing functionality and performance.

Security features

As much as accurate financial information is important, it can be a liability if it falls into the wrong hands. So, one of the primary concerns should be getting a digital agency billing software with robust security features.

Before settling for one, ensure that it can guarantee the safety of your data with aspects such as encryption, cloud data backup, and regular system updates.

Customer support and training

In the early phases of incorporating billing software into your business, having technical support is important to ensure that you navigate rising issues promptly. In this case, when selecting the right software for you, inquire about the provider’s customer support or availability of any service level agreements (SLAs).

You can also look over if they offer training packages to assist you and your team with the software.

Implementing digital agency billing software

Implementing digital agency billing software requires careful planning to lay a solid foundation for stress-free billing processes. Here are steps to guide you:

Step 1: Evaluate the current billing process

Before implementing digital billing software, it’s crucial to assess the current billing process thoroughly. Doing so will show you areas of inefficiency that your new billing software should solve. It would help to outline the steps that you follow to bill clients.

By analyzing them afterward, you will be able to set clear goals. Is it reducing errors, improving customer satisfaction, or streamlining billing operations? With this in mind, you know how better to customize your chosen billing software.

Step 2: Research for a reliable digital agency billing software

Finding reliable digital agency billing software is no easy feat. This is because the market is flooded with hundreds of options, all claiming to offer exceptional results. As such, you’ll have to put in lots of research work.

First, you can carry out online research. Visit websites and social media platforms to read reviews about other people’s experiences with your desired software. Second, ask for recommendations from industry peers and their honest feedback about what they like or dislike about a given billing tool. Lastly, you can ask a software developer for a trial or demo or sign up for a free trial. The aim should be finding a billing tool that matches your business needs.

Step 3: Customize and transfer customer data

Once you find your desired billing software, it’s time to tailor it to fit your needs. Customization might include setting up user accounts, defining billing templates, configuring tax settings, integrating with accounting or CRM systems, and integrating payment processors.

What follows is moving your client data from the old system. After all, without relevant client data, the software won’t be of much use. The data to migrate includes:

  • Client’s business name
  • Client contact information (such as name, email, and phone number)
  • Client billing address
  • Client account numbers or identifiers
  • Billing history, including invoices, payments, and outstanding balances
  • Terms of payment

Before transferring this data, it’s essential to clean it. This way, you’ll get rid of outdated records and correct any errors or inconsistencies.

Step 4: Train and give support

Training your employees on how to navigate the billing system is paramount. It gives them the confidence to embrace the change while minimizing stress and time wastage when you roll out the software. Before your team gets fully acquainted with the billing tool, you should also ensure they have readily available support.

Step 5: Gradually roll out the digital agency billing software

Instead of using a big-bang launch, consider a pilot rollout. Choose a subset of users or a specific department to test the billing software. This will allow your team to get used to the billing tool in a more controlled way.

Moreover, you’ll gather feedback on whether the tool is working as expected and areas that might benefit from improvement. By the time you expand the billing software to the entire organization, it will be working smoothly without issues.

Step 6: Monitor and optimize

Every once in a while, you should monitor the performance and usage of the digital billing software. Assess if it’s addressing the pain points that were in the previous billing system. Whenever you identify gaps, update the software with new features, patches, and enhancements to stay aligned with your business processes.

Tips for using billing software effectively

At times, having the best digital agency billing software is simply not enough. You need to optimize its use in your business in order to reap maximum benefits from it. Below are several tips on how to effectively use billing software.

Tip 1: Be familiar with your software

For you to optimize your billing software use, you have to be familiar with it. Get to know the basics of the software by referring to user guides and the provider’s technical support teams for assistance.

Exploring the software gives first-hand knowledge of how to use all the features and options available to better your business. You can supplement this by scheduling training sessions for your employees to familiarize themselves with how best to use the application.

Tip 2: Apply auto options available

The primary role of the billing software is to make work easier, enhance efficiency, and improve accuracy. Therefore, applying the automated features of the software, such as preset templates, auto-invoicing, recurrent billing, and payment reminders, eases your business payment process.

Tip 3: Keep yourself updated with improvements

Software manufacturers keep updating their products and making improvements such as bug fixes, security upgrades, and adding more features. As such, being current and up-to-date with any software developments from the provider gives you an edge and improves your experience with the billing software.

Tip 4: Set up late payment reminders

Despite your best efforts in sending invoices on time, the client might get all caught up and forget about it. In fact, 29% of invoices are always paid late. As such, there are chances of not getting your payment on time. Setting automated reminders a few days before the due date prompts clients to pay on time without the need for follow-up communication.

Tip 5: Backup your data

Financial data loss or breaches can have a huge negative impact on your business. Cloud storage, which most billing software currently uses, offers secure storage for your information. However, it’s better to be safe and ensure you back up your data regularly.

Tip 6: Make use of reports and analytics

Apart from completing accounting and bookkeeping tasks, your billing software generates reports and analyzes your business data. These contain information such as your billing performance, profit and loss, client payment behaviors, stock, and expenses. By looking at the reports and analytics, you are able to make better-informed decisions.

Tip 7: Use simple and concise language

Not all clients are knowledgeable in the billing sector. So, it’s important to stay away from jargon and technical abbreviations and use easy-to-understand language. Take advantage of any customization options available in the billing software to tailor the language and terminology used to match your organization’s preferences and branding.

Summing up: Your agency survival largely depends on proper billing

Ultimately, the goal of offering marketing services is to get paid. Yet, the payment collection method can cause lots of headaches with the many tasks involved. Worse still, it can cause you to take losses. To avoid all these unpleasantries, you should go for digital agency software like Hello Bonsai.

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