The bulk of your efforts as an agency manager or owner will probably be put into ensuring your projects are done on time and satisfy your clients’ requirements. After all, it’s what makes your company money and keeps the lights on.
However, it’s only a part of your business’ success. The actual way your company can thrive is by billing the clients for your team’s time and expertise.
That’s where billing software comes in. Without it, you’ll need to manually calculate how much to charge your clients and, even worse, track whether they pay you or time. Marketing agency billing software allows you to automate most billing-related tasks and reduce the time you spend poring over timetables.
In this article, you’ll learn why you should get billing software, the best features to look for, and even some excellent tools to get you started.
In many cases, you’ll see the terms billing and invoicing thrown around interchangeably. One software may claim to be for invoicing, while the other will specify billing. This gets exacerbated by the fact that the terms bills and invoices have received different colloquial usage.
Typically, invoicing software allows you to create and send invoices to the clients, which they then pay independently, like with utility bills. On the other hand, billing software creates a point-of-sale platform where the clients directly pay for your services, similar to how you’d pay at a grocery store.
However, most marketing agency billing software serves both functions.
Billing software should already be familiar to you in some capacity. At its core, billing software streamlines how you create and send invoices to your clients. While you could probably handle manual billing by hand, using software is the next, natural step in your agency’s growth. Here’s why.
Invoices are the main way your agency is getting paid, and you can’t afford to send out a wrong invoice to a client. However, there are so many different details that you have to remember, from the client’s personal details to the payment method they use.
Usually, this will get stored in spreadsheets or—in a much more likely, and worse, scenario if you’re a small company—in your head, while you try to remember what invoice details to use for a particular client.
With billing software, the problem practically takes care of itself. Thanks to a smart information input system, you can enter your client’s details, overview them at will, and change them if necessary.
Additionally, some systems allow you to set up recurring payments. This works extremely well if your primary business model uses monthly subscription services. The software can generate an invoice once a month for a specific client and prompt you to send it or do so directly.
Furthermore, you won’t have to worry about mismatched invoice numbers. The software stores all previous invoices and can simply generate the next invoice number automatically.
Automated invoices can also be helpful for the client. If the template is well-known or easy to read, the client might be able to set up recurring payments on their banking software and greatly simplify how the payment is processed on both sides.
Depending on how you set up your payment terms, you may encounter issues billing your clients for your team’s time. If you don’t have a clear-cut payment-per-project method, you might be resorting to a pay-per-hour model.
This can prove tricky to implement if your project management software can’t precisely track how long it took your team to finish their tasks. But, if your billing software can integrate with your time management software, or has its own time-tracking capabilities, you can get an accurate overview of the time it took to complete projects.
If the software integration allows, your billing tool can also pull up relevant client payment terms (such as the agreed-upon hourly rate). Then, it can automatically combine it with the information to create an accurate invoice or present those details in your client platform.
One of the biggest concerns for small companies is money management. While you can use bookkeeping software to track your income and expenses, and then build a business plan around that budget, that plan won’t work if your income doesn’t come on time.
Somewhat unsurprisingly, getting paid on time is one of the biggest issues for smaller businesses. Some clients always seem to be trying to dodge paying you or create new excuses for why they haven’t received your invoice. If that continues, your business might fall behind on its costs, and you’ve just become a part of a debt cycle that can spiral out of control. Ultimately, this can cost you the entire business.
The metric for figuring out how many days it takes you to get paid is called Days Sales Outstanding (DSO), and it’s best to keep it as low as possible. According to the Credit Research Foundation, the average DSO of American businesses is 36 days. That means it might take 36 days between closing a sale or sending an invoice and the money actually landing in your account. Even worse, around 0.5% of businesses have DSOs above 91 days. That’s a full three months of uncertainty.
While billing software doesn’t directly help you get paid (as it can’t force a client to do so), it can greatly help how fast you get paid. There are two main benefits for faster payments.
First, since you can develop detailed invoices, you have a lower risk of forgetting vital payment information. Additionally, you can provide multiple payment platforms, which makes it easier for clients to pay you as soon as possible.
Secondly, the billing software can integrate with your client management tools. You can set up reminders for the clients who haven’t paid their invoices yet and explicitly detail the agreed-upon payment terms and late fees.
Nowadays, clients have gotten used to being wooed. And they’ve gotten pickier as a result. If something seems amiss with your product offer, they’re more likely to back out and go with your competitor. Perhaps a bit unintuitively, the same thing can happen with the invoices you send.
If you’re still sending invoices by hand, you may miss a detail or two. A formatting blip from a previous sample can crawl in and ruin how a table looks. It makes the invoice look unprofessional or rushed. And the client probably won’t be too impressed with it.
As you have probably heard before, consistency is key to branding, and billing software can extend that concept to your invoices. You can automatically put your brand’s logo, use matching theme colors, and even include detailed, customized “thank you” notes and reminders for the client. In some cases, you can also use the invoice to announce upcoming service changes and even up-sell the client with a new offer you released.
Ultimately, a unified customer experience through branding significantly lowers dispute rates and helps your agency get paid on time.
Additionally, billing software can also create a client-oriented payment platform. All the client has to do is log in, enter their payment details, and get a detailed overview of what they’re paying for. They don’t have to go through the hassle of entering their banking software and manually inputting the data from the invoice. The entire payment process happens behind the scenes, and both you and the client get a copy of the bill.
In some cases, you can also customize the software to offer different payment platforms or services, currencies, and even languages. It allows your clients to use the payment method they’re most comfortable with while also preventing miscommunication due to language and terminology differences.
This completely eliminates the need to create and send invoices that might get lost in the client’s email inbox. It allows you more control over the payment process and ensures the client is fully committed to working with you.
The best marketing agency billing software also stores your incoming payments and combines that data with the rest of your bookkeeping information. Then, the software can generate accurate and accessible reports that allow you to keep track of vital agency KPIs (key performance indicators).
Without software to help, someone on your team would need to crawl through bank statements and compare various business accounts to check how the company is doing. While it can be beneficial to double-check your data, it can take way too long to be worthwhile. A small team likely can’t afford to pay someone else to do this. Billing software can save you both time and money here and ensure precise results.
Countries (and even U.S. states) have different laws and regulations on what must be included inside an invoice. Furthermore, the nomenclature used for invoicing can vary between one jurisdiction and the next.
Modern billing software is typically regularly updated to ensure it complies with the most recent changes in laws and regulations. This can be especially beneficial if your company primarily works with foreign clients. The billing system can take into account the requirements of both countries and ensure the payment terms remain clear.
Not all billing software is equal, and some tools might not come with all the benefits—or even the necessities—you need to run a successful business. When browsing for your next billing solution, keep an eye out for the following features.
Centralizing your billing system with cloud storage will make it much easier to keep track of your incoming and outgoing payments. It also ensures that your accounting team is working with the most up-to-date documentation, preventing potentially costly human error.
Additionally, cloud storage usually comes with regular backups, ensuring that your invoices are safe during outages or protected from accidents like data breaches.
Also, you need to ensure that the system can scale with you as the company grows. Perhaps you don’t need automated invoices when you’re working with only a few clients or have specific retainer contracts. However, the feature would likely be welcomed if you decide to offer subscription-based services.
If you need to spend minutes of your time every day to fill out an invoice, that’s precious time wasted on a repetitive task that billing software can offload. This rapidly contributes to employee dissatisfaction and can be costing you significant sums over the long run. However, that won’t matter if the tool is incredibly complex or unintuitive.
Luckily, most billing software options on the market allow you to try it out, usually with a preview of the most advanced features. You can use the trial to check the most basic invoicing and billing operations you’ll need.
Cost can be one of the most prohibitive factors in choosing new software. Even the best billing software under the sun won’t matter to you if it costs too much to maintain. You need to accurately plan and predict your team’s budget and needs versus what the software offers.
Keep in mind that most tools become more cost-effective when you grow, so it can pay off to invest a bit in the tool if it will streamline your work.
Agencies come in various sizes and have different goals, and the same goes for the products and software tools they use. You might not need all the bells and whistles some of the most expensive billing solutions on the market can provide, and that’s OK. Look for software that allows you to input the details you need to make succinct yet effective invoice and billing solutions without needing heavy training.
Additionally, it would greatly help if the tools you choose could also integrate with other popular software on the market. Integration with customer relationship management and project management software can greatly speed up reporting and create more comprehensive results for your company and your clients.
In some cases, the software itself can double as a project management or CRM tool, allowing you to work on a single, unified platform. This will greatly reduce the burden of onboarding new members to multiple platforms and ensure that data doesn’t get scrambled when transferring from one tool to another.
Regardless of whether you send out invoices or provide a billing platform that clients access, you need to ensure that your agency gets paid on time. If you manage your bookkeeping manually, unpaid invoices can fall through the cracks and you might not get paid for a project for months.
Your best marketing agency billing software will need to remind both you and the client of any payments due. Look for software that can integrate with your CRM platform to provide a detailed overview of a client’s payment history. That way, you can create a customized payment and reminder plan to ensure a solid long-term relationship or reassess whether the client is worth keeping on the retainer.
We’ve already broached customizing the invoice to the client, and this goes double for the currency and payment method provided to the client. According to PayU, roughly half of the customers abandon their carts when presented with unfamiliar payment methods or that have different currencies.
The same goes for your agency clients. If they can’t pay in their local currency, they might be concerned about currency exchange fees and look elsewhere.
That’s why your billing solution has to implement different currency options and a clear, unified payment platform that covers most of the available payment options (cards, PayPal, bank transfer, etc.).
Since billing software handles your money as well as that of your clients, data security is paramount. Look for billing software that implements the most popular payment processors, such as PayPal, Square, or Stripe.
Additionally, check how the data the software is processing is being handled. Some of the most common standards that software needs to comply with include PCI DSS, GDPR, HIPAA, and SOC 2 (this can depend on the industry and location).
Finally, consult the provider on how user authentication is handled, such as password recovery, additional authentication methods, and access control.
If you’re running a digital-first marketing agency, your customers might be located all over the world. That’s why you need a software solution that provides constant uptime and can quickly solve any technical issues that you or your clients might be facing.
While maintaining a rich knowledge base for common problems can be beneficial, it’s often not enough for clients who want to know what exactly is happening with their money if a payment fails. That’s where marketing agency billing software with real-time chat can greatly expedite problem-solving and improve customer experience.
Sure, there are some excellent billing and invoicing platforms out there. ZOHO, FreshBooks, Wave, Xero—the list goes on and on. However, all these tools have one thing in common. They are only accounting tools.
You still need to integrate them with your existing software and ensure that the information you’re feeding to the invoicing software matches what you have in the CRM tool. If you’re juggling multiple clients, you need a single, customizable tool to ensure complete centralization.
That’s where Bonsai comes in.
Bonsai is a full-service bookkeeping, billing, project management, and CRM tool. It will allow you to manage your agency while you grow from a budding solo entrepreneur to an international corporation.
As a billing solution, Bonsai takes care of all your billing needs. You can set automated and recurring invoices, with the information pulled straight from the CRM data. The platform provides access to a rich base of invoicing templates you can use to create attractive yet concise and informative invoices to ensure your clients fully understand what they’re paying for. Additionally, Bonsai uses Stripe to handle all transactions, and you can choose whether you or the client pay for any transfer fees, creating better payment transparency. Thanks to the addition of Stripe, the platform offers multiple payment options and can transact in over 100 world currencies.
Bonsai also allows you to create invoices based on the actual amount of work done and how long you spent on the project, thanks to its time-tracking integrations within your project pipeline tools. Your clients can also pay invoices in installments, allowing you to plan your income and preventing significant payment delays more efficiently.
Besides handling your payments, Bonsai can also act as a full bookkeeping tool for your agency. You can track your income and expenses and create detailed cost analytics for your projects. Additionally, the platform can help you allocate your income in categories such as payroll, savings, and project costs, helping you plan your agency’s financial future.
However, where Bonsai shines is its centralization system, which has full CRM and project management capabilities. You can input valuable client data into the CRM, and that information quickly becomes available to your project management and accounting. Bonsai also carries a rich base of contract samples and project proposals, so you can easily onboard a new client and ensure a healthy long-term relationship with minimal oversight from a contract lawyer.
Finally, Bonsai allows you to easily collaborate with freelancers and independent contractors. By adding them to your platform, you can assign detailed roles and implement access limitations, giving every team member specific vital project information and a unified platform to overview significant milestones.
Try Bonsai’s seven-day free trial, with unlimited access to features and samples, and learn how it can help your agency become the best it can be.
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