ConnectWise – from the Finance Perspective

Report
By : Doreen Gemme
www.newlifedevelopment.net
January 2014
www.linkedin.com/in/dgemme/
ConnectWise – from the
Finance Perspective …
Finally!
Some Questions for you …
•
How many companies are NOT billing at all from ConnectWise and
only bill from their accounting system?
•
How many companies are only billing partially from ConnectWise?
•
How many people never have any collections issues or billing errors?
•
How many companies have a process for reviewing their pre-paid
liabilities for blocks of hours and downpayments?
Topics to Cover
•
Agreement Billing and Block Type
•
Projects and Billing – downpayments, 3rd party funding, presales efforts
•
Creating Invoices – Fixed Method vs Actual, billing status ideas, Credit
memos and product billing
•
Invoice Review Recommendations
•
Accounting Interface – Direct Export
•
QuickBooks Integration at a Glance
•
Payroll Journal Entry
•
Q and A
Agreement Types and Billing
Invoice Wizard - Compare
List of Active Agreements
List of Invoices to be Created
Compare list of actual active agreements with those that are
publishing to the Invoice Wizard.
Agreement Types and Billing
Invoice Wizard - Consistent
Always bill
using the same
billing date
each month
•
And don’t use
this date for
any other
invoice types
Agreement Types and Billing
Invoice Wizard – Limit those for review
•
Create Agreement type invoices that do NOT require review first /
submit those to the client for payment (which updates the Invoice Status)
•
Then create the balance of the agreement invoices for review
Pre-billed/Block Agreement Type
Application Units = Amount
•
Set Application Units to “Amount” with the limit to the “$ amount”
•
This allows the most flexibility in billing at more than a single hourly
rate; or changes to the single rate in the future
Pre-billed/Block Agreement Type
Add PO to Agreement Name
•
Enter the Client’s PO number in the Agreement Name field as well as the
PO field:
•
This will then publish to the client invoice for their benefit and clarity:
Pre-billed/Block Agreement Type
Block Types
•
You may have more than a single “Block” Agreement Type:
o
“Block” = auto renewed and sent out email reminders to the client that a new
invoice would be submitted soon
o
“Block – 1 yr” = had an expiry date of 1 year and sent out an email
notification to the client when their block was nearly used
o
“Block – MS funding” = did not necessarily have an expiry date but also did
not notify the client as the funding source was a 3rd party and the client was
not responsible to re-up
Projects and Billing
•
Important – Finance should review every project created for proper billing
attributes
o
•
Project Management needs to receive training on finance of Projects so that previously
defined billing attributes are not usurped; i.e. adding a “Change Order” phase to a fixed
fee project without setting the Phase to “bill separately”
DID YOU KNOW - that tickets created under the Issues Tab of a project will bill
as part of the base phase? Oftentimes, issues are really “issues” OR they could be
a change order. We had elected to not use “issues” unless the time was
determined and set to non-billable.
Projects and Billing
Downpayments
•
Enter a title or PO in the PO field of the Project
regardless of if the client gives you one or not
•
IMPORTANT – In my experience, making sure
the box is checked for “restrict downpayment
to this project” has been hugely important
o
Additionally, the system will apply
downpayment dollars to ‘anything’ billed; so it is
important to understand the intent of the
downpayment
Projects and Billing
Applying Microsoft Funding (or other 3rd Party)
Option 1
•
Bills the 3rd party directly but
allows client to benefit
immediately by the expected
funding
Option 2
•
Bills the client directly; client is
responsible for payment via
contract and invoice, however, 3rd
party payment will be applied to
AR to cover open invoice(s) once
expected funding has be
received.
Projects and Billing
Applying Microsoft Funding (or other 3rd Party)
Option 1 - Steps
•
Create and Invoice
(downpayment type)
o
•
Option 2 - Steps
•
o
Give invoice a value for funding
Use Inv No that denotes funding
(118901 MSV = Microsoft
Voucher)
3rd
•
Set the Bill To to
•
Leave this invoice OPEN as a todo until funding is confirmed
Create and Invoice (downpayment
type)
Give invoice a $0.00; note value in
Summary
•
Use Inv No that denotes funding
(118901 MSV = Microsoft Voucher)
•
Set the Bill To to 3rd Party
•
Leave this invoice OPEN as a to-do
until funding is confirmed\
•
Create a separate invoice for the
Customer using same digits as funding
Invoice
Party
Projects and Billing
Applying Microsoft Funding (or other 3rd Party)
Option 1 – Extra Step
•
Since this invoice is billing a 3rd party; however, the client is benefiting
from the funding, the funds need to be re-allocated within the
deferred revenue account to the Client via this Journal Entry:
Projects and Billing
Applying Microsoft Funding (or other 3rd Party)
Option 1 – Pro vs. Con
•
Client may benefit immediately
which makes the client happy;
however, if funding falls through,
it may be difficult to go back to
client and collect.
Option 2 – Pro vs. Con
•
SOW must be clear that the client
is responsible to pay. Billing the
client directly limits the liability
should funding not pan out. This
must not be a de-motivator from
a sales perspective in helping to
collect on 3rd party funding.
Projects and Billing
PreSales Engineering Efforts
•
To track non-billable prospect-facing time for engineering presales
efforts:
•
Create a customer entity called “PreSales” and create accompanying projects
for each Business Unit/Department
•
Create a work role specific for this purpose; Proj-PreSales
Creating Invoices
•
“Consistency” We had always billed recurring Agreement invoices on
the 15th of the month for the following month; never the 16th … always
the 15th of the month. This makes interpreting data in CW and QB
consistent as well. Additionally, we have always billed agreement
overages and T&M projects for the month using the last day of the
month as an invoice date. This aligns with the “matching principal” of
accounting; costs and revenue hitting the applicable 30 day period,
netting profit.
Invoice Wizard
•
Always double-check the period you’re billing through and set your
invoice date.
Creating Invoices
Invoice Wizard
•
Bill product separately. Make correction and bill product first. (See
more at Product Billing)
•
Always send a copy of the invoice to yourself and file in a single folder
(i.e. ‘Invoices Sent’ folder)
o
When a client asks for an invoice again; resubmit by using the Summary of
the email and say “Resubmitting Inv No 117325” and save this to the SAME
‘Invoice Sent’ folder. This makes it very easy to find confirmation during the
collections process; and reveals repeat offenders using the “I never received
it” excuse.
Creating Invoices
Fixed Method Invoice Type
•
NEVER create “fixed” method
invoices at the same time as “actual”
/ filter first then create one at a time
•
Fixed invoices may be used to realize
revenue ONLY and may not be
submitted to the client at all. These
invoices should represent ‘actual’
time spent within that calendar
month
•
Invoices for expense reimbursements
for fixed fee work are created
separately
Creating Invoices
Actual Method Invoice Type
•
These invoices should be able to be
swept through into the invoice
review process
•
Leave out the invoices with the
lowest values or even $0.00
•
Review these for write-off if they are
presales
•
Edit to non-billable for incidental
amounts
•
Or hold until next billing period and
consolidate
Creating Invoices
Billing Status Ideas
Some examples of Billing Status types and the meaning we applied are as
follows:
•
Closed to Company Only = internal purposes only, not submitted to
the client and did not publish to the CW customer portal
•
Closed/Submitted = typical status of submitted invoice for payment and
the ONLY status that publishes to the CW customer portal
•
SEND = used after accounting review only
•
Ready to Send = status of previous approver(s) pending accounting
review
•
Waiting on Microsoft = pending confirmation of funding/payment
•
Waiting on Milestone = pending milestone completion prior to billing
(downpayment invoice types, typically)
Creating Invoices
Credit Memos
Always use the original invoice number as the Credit Memo number and
add “CM” to it
Seems so simple, and it is! It saves a lot of time in verifying work completed
and reduces, if not eliminates, redundancy in creating another credit memo
in error and is very clear to the client that the requested credit has been
provided.
Creating Invoices
Product Billing
We found that billing product via an
SR set to bill by itself was ideal.
Why bill separately?
• Visibility within the Invoice Wizard and Invoice Search
• Invoice could be created at-will to expedite AR and collections
• Many clients process product invoices differently
• Publish the client’s PO# and a Summary to the invoice for billing clarity
• The internal SR# would become the Company’s PO# when purchasing the
product from the Vendor.
• The SR will NOT pull downpayment dollars that were allocated for services (i.e.
when on a Project).
Invoice Review Recommendations
Invoice Tab
•
Always review the Invoice Tab for the
Service, Expense, Product, Agreement
and Downpayment details so that you
know what you’re looking for on the
detail tabs.
o
Although, just because there might be a
0.00 doesn’t mean there isn’t something
for ‘free’ on the detail tab, right?
Invoice Review Recommendations
Time Tab
•
On the Time Tab, be sure that the columns for Resource,
Agreement, Work Role, Work Type, Hours and Rate are visible
in your view. Perhaps even the SR ID will be helpful here.
Invoice Review Recommendations
Time Tab
•
If you are publishing engineering time entry “notes” to the
invoice, review notes via the blue down arrow or by printing the
invoice to the screen.
•
IMPORTANT: We do need to understand where agreements
are applied; if downpayment dollars are being used, if billing
rates have changed, etc.
Accounting Interface – Direct Transfer
•
Sometime there is a need to delete a
batch, edit an invoice, resubmit and
then recreate the batch again for
posting. Of course, this does create
room for error.
•
The invoices that need not be
edited must be pushed to an IIF so
that they are not posted a second
time to accounts receivable.
•
Never delete a batch without
making sure that your Unposted
Invoices Tab is EMPTY
Accounting Interface – Direct Transfer
IMPORTANT: The IIF document created to purge the already posted invoices should share the same
exact name as the original batch ID of the Direct Export. (See “naming schema” below for more
details.) The original posting in QB will reference the original batch ID in the memo. The trail will be
broken if the batch is deleted with no IIF of the same name created. The batch ID on the CW Invoice/GL
Entries Tab will denote the newest batch ID, but this does convolute information when it doesn’t match
the QB memo field.
A couple of additional ideas in this regard would be:
•
After a diligent invoice review process; wait a couple of days (or longer if possible) after submitting
invoices to client for payment; before posting invoices to accounting in order to allow time for a
possible “revision”.
•
Export Invoices and Expenses separately – never together.
•
Segregate some invoice postings into sub groups. Depending on invoice volume, ideally, publish
deferred revenue (downpayment or block retainer) invoices individually via their own batch and
post certain agreement invoices into a single batch, as an example.
•
A naming schema for the batch is important. What has worked well for me is using the actual
‘posting date’ as the batch ID followed by a [Inv or Exp]_[ltr of alpha][IIF or blank]. For example:
o
032813Inv_a = direct export of invoices only
o 032813Inv_b could be the direct export of a single downpayment invoice
o
032813Exp_a = direct export of expenses only
o
032813Inv_aIIF = IIF export of the deleted but previously posted invoices to QB
QuickBooks Integration at a Glance
Profit and Loss
Mapping to the QuickBooks Chart of Accounts is key to being able to
reviewing financial figures and creating usable reports. Here are a couple
of ideas that may suite you:
• Use the CLASS as your Business Unit/Department
• Track your consulting revenue in at least three categories
o Recurring Support is monthly recurring billing based on a signed
agreements
o Non-recurring Support is the support billed over and above the
monthly recurring billing
o Consulting is Project efforts
QuickBooks Integration at a Glance
Balance Sheet
Using the PO Field in ConnectWise
which maps over in accounting to
the PO field in QB, allows you to
review important figures such as
Deferred Revenue balances on a
per client/per project basis (as
previously mentioned under
Downpayments) for accuracy.
o By opening a Balance Sheet /
drill into the Deferred Revenue
type to review / sort by
Customer or “filter” to a single
customer / customize the report
to include the PO # field / sort on
PO# field / export to excel and
scrub
Payroll Journal Entry
Data Extract
The time entry data can be extracted from ConnectWise and into an excel document
using a required format provided by ADP for a specific payroll period (semi-monthly
pay period).
Payroll Journal Entry
Profit and Loss
With this data, ADP was able to generate our payroll and provide a report on a per
Business Unit/Department basis as well as on billability (Billable vs. Non-Billable and
Purchasing vs. Presales).
Payroll Journal Entry
Profit and Loss
It would also distribute out our
overhead or G and A codes.
This report could then be
entered into a Journal Entry
template in excel which would
then give us figures for our
financials which would look a
bit like this:
Q and A Session
If Time Permits
Thank you !!
By : Doreen Gemme
www.newlifedevelopment.net
January 2014
www.linkedin.com/pub/doreen-gemme/45/2b8/b68/

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