Choosing the right billing method, accounting for expenses, setting up net payment terms are all aspects that can make or break your business.
But here’s the harsh truth: most popular project management apps don’t care about it.
Don’t believe me?
Project management tools with no invoicing feature
Benefits of project management software with invoicing
If invoicing your services is so tied to project management, why would you push it off towards the end of a project and risk not getting paid accordingly? Why would you externalize it to another software other than your existing project management one in the first place?
In this article, you will explore why it makes sense to bring them together and what features to look for during your research. You’ll also get a glimpse into how you can run your invoicing in Paymo on top of projects.
But if you’re new to invoicing altogether, here’s our invoicing guide outlining the benefits of invoicing plus examples so that you understand the basics.
Here are some no-brainer benefits in favor of project management tools with built-in accounting:
- No extra costs. You only pay for 1 subscription instead of 2.
- No messy integrations. Your data gets consolidated into one app, which means the risk for double-entries and missed data is lower than maintaining it in different systems.
- Accurate proof of work. Your projects live in the same place as your invoices. Hence it’s much easier to justify your work and get paid accurately.
Ok, these were easy. Albeit, there are other more invoicing oriented ones that can ring a bell when talking with your CEO, especially your CFO:
- Brand awareness. Your company’s reputation gets a boost, thanks to professional-looking invoices with your company’s logo and styling
- Increased collection rate. By having an accurate record of clients and their invoice terms, you stop missing out on payments vital to your company’s very own existence.
- Decreased HR costs. There’s also no need to hire extra staff to chase payments, as you can automate the creation of invoices and late payment reminders.
The bottom line is that integrated project management and invoicing serve both you and your clients. On one hand, automation can help you take better decisions by analyzing each project’s cash flow. On the other hand, clients get a clear picture of what you’re charging them for, be it flat-rate projects, work hours, or added costs.
Criteria for choosing project management software with invoicing
I will be skipping over some of the most typical features you would expect to see with project management tools because those are not the main differentiating factors.
Instead, I’ve focused on the following project invoicing criteria:
- Different billing methods. Look for a project management tool that accounts for several project billing methods. Time & materials, flat-rate, and non-billable are the most common project types, but you should be able to combine them in case you need a hybrid. Billing rates are another important aspect. There are times when it’s more profitable to charge a project hourly rate than an hourly user one.
- Custom invoices. Can I create invoices on top of projects and timesheets? Ideally, you want to generate invoices with a bit of help from the system in a more automated way. That doesn’t mean you shouldn’t make them from scratch (when necessary).
- Recurring invoices & late payment reminders. Can I automate invoices for clients that I bill on a regular basis? And if so, can I also follow up on them to maintain a steady stream of cash flow?
- Multi-language templates. Can I quickly plug in invoice templates with different formats and languages? You want to personalize the communication with your foreign clients and save time simultaneously.
- Online payment gateways. Can I cash in invoices online, in multiple different currencies? This comes in handy if you own a company with a global presence. Beware of commissions, as payment providers have taxes that differ from country to country.
- Taxes and discounts. Can I account for taxes and be ready in advance of the tax season? You also want to be able to add discounts that encourage client loyalty.
- Estimates and expenses. Can I manage the full accounting spectrum within my project management tool? Ideally, you want to tie in estimates to projects and register expenses to follow which projects (or team members) incur the most fixed costs.
- Mobile app. Can I preview invoices before sending them, even from my smartphone? It’s 2022, so you want to rely on a project management tool with built-in invoicing whose mobile experience matches the web one.
Unfortunately, every country has its own invoicing standards due to tax laws. Some require the software providers to be from the same country, while others insist on displaying the service delivery date on each invoice.
Whatever the case may be, know that an online tool is more efficient and lesser prone to human errors than manual bookkeeping.
This doesn’t mean though that you won’t have to monitor it for any unusual corrections on behalf of your team. So factor in maintenance too.
How project invoicing works in Paymo
If you’re already sold on a project management tool with built-in invoicing, then Paymo is the right fit for you. Let’s see how you can turn project invoicing into the highlight of your day.
Create professional-looking invoices
Your project is done, the clients are happy. It’s time to invoice them for your work.
To add an invoice, go to the Invoice module → Add invoice. This will open a WYSIWYG editor, where you’re working with an actual editor and not just a form.
After selecting the client that you wish to invoice, you’ll notice that the button Add Outstanding Time/Costs appears.
Add outstanding time/costs button in Paymo
This allows you to add items either from:
- Timesheets – Where you convert actual time entries into an invoice.
- Expenses – Which count as a cost on top of a project.
- Flat rate project – Where the whole project is a line item.
- Flat rate tasks – Where you can select which tasks to end up on the final invoice.
The advantage is that this project data already exists within the system. You just plug it in, with the possibility to manually change it – if needed.
Be memorable with personalized invoices
First impressions still count, especially online. Customize your invoices to better reflect your brand and stand out from the competition at the same time.
Spanish invoice in Paymo
Look through the Project Accounting settings to choose among 15 multi-language invoice templates, with the clients either on the right or left side. Don’t forget to add your own logo and invoice notes, in case you want to thank your clients for their business.
If you’re more techie though, you can change the HTML/CSS code to stylize the invoice with your own fonts and formatting.
Estimate and expenses, all under one roof
Way before invoicing a client, you first need to hand them a summary of the work that’s going to be delivered in big lines and the cost of it, a.k.a. an estimate. But creating one, only to add the same details again on the invoice (more or less) is just double work.
In Paymo, you can create estimates from scratch or convert an existing project into one. Once approved by your clients, you can then turn them into an invoice in just a matter of clicks.
Convert project to estimate in Paymo
Expenses can also be monitored alongside your projects. Register and attach them at a client or project level, so you never have to store receipts again. There’s a tag manager as well, that can help you categorize expenses and identify which ones take the largest proportion of your fixed costs.
Expenses in Paymo
In a post-pandemic era, you need to be able to run your business from everywhere.
You can preview an invoice right before sending it to your client, to check that all financial details are in line with your client’s data. As well as snap a receipt with the phone camera and attach it to an expense.
Preview invoice on mobile – Paymo
Simple as that! Other than this you can accept online payments, even add down payments in case you need to kick start a project with a
Project management & invoicing, now kiss!
I hope I’ve armed you with enough arguments and reasons why a project management tool with built-in accounting makes much more sense than one which is short of features built to support your business.
Did I miss any? If you have to share, let me know. Here’s my Twitter.
First published on June 3, 2021.