In an ideal scenario, you can expect bill rates not to change. It is a constant or variable as decided at the time of contracting. In practice, however, your customer will demand a discount or ask you to reduce the pay rate applicable to a particular individual or a group of consultants (and subcontractors) due to multiples of reasons. The corollary is also true; at times the consultants may be asked to take up additional work not directly related to the project and provide for higher than usual pay rates.
In the interest of maintaining cordial relationships, the IT staffing company will agree to assume the additional workload and compensate for it by revising the bill rate either uniformly for the tenure of the project or accept a lump sum compensation from the customer and reward the consultant based on an acceptable compensation formula.
Revised Bills and Invoicing Errors
If your invoice is of the simplest kind then changing the billing rate alone will hardly make a difference – your company is assured of generating a zero-error invoice, but things don’t work like this in a real-time situation. In fact, there are a lot of changes that you will have to make for discount allowance, tax liabilities and those financial data that have an absolute value. These too will have to be changed to get the right invoice.
If your IT staffing company has yet to adopt invoicing automation and your accountants are still following the age-old manual invoicing process, instead of simply applying a new billing rate, you are better off redrafting the invoices afresh. This too has a downside because your accountant will be wasting revisiting the old documents based on which the first invoice was prepared. Bringing in invoicing automation can dramatically change the way you will be able to handle “revised bill rates.”
Collateral Benefits of Automating Invoicing with CONSULT
IT staffing companies are already using CONSULT (invoicing automation solution for QuickBooks) to deal with revised bill rates and generate post-change perfect zero-error invoices without starting from scratch and walking through the entire process. This is possible in CONSULT because it is endowed with a complex algorithm that takes care of revised billed rates. Though you will probably want to use this for revising invoices mostly, it can also be used in modeling and studying the impact of different billing rates and their impact on profitability.
Consultants’ hourly rates are the most common billing rate changes that IT staffing companies make often, but this isn’t either the only change that will need to be taken care of. Here are few other factors that can change the final amount of the invoice: invoice categorization and change of tax rates; increase/decrease of working hours; shifting of working place; and location-related compensation for consultants.
CONSULT is customizable and adaptable with QuickBooks with the same type of user interface. It has no learning curve at all – just discover and start-using-the-features-intuitively kind of software. It is the most powerful independent-dashboard-controlled invoicing tool that IT staffing companies can hope to get for increasing productivity, scaling up profit levels, streamlining cash flow and providing full control over the CONSULT-QuickBooks combined environment.