Trying to master Pay & Bill at your Staffing Firm?
Pay & Bill is one of the most essential elements of the staffing business to get right but it’s also one of the most complex. As we know all too well, inaccurate invoices are the fastest way to lose a client and damage your reputation. So how can you excel at pay & bill?
Chameleon aims to provide an accurate pay & bill experience that ultimately comes down to using the right tools, implementing an effective process, and monitoring and tweaking that process accordingly.
The 5 KPIs that can help you include: Profitability and Margin, Hours Worked, Billing and Collections Effectiveness, Invoice Accuracy, and Timesheet Efficiency.
- Profitability and Margin: Having current and accurate visibility into profitability is crucial to understanding the performance of your business. Profitability provides valuable insight when measured in dollars your business earns after expenses (including different costs), and as a percentage of your total billable revenue. It answers the questions: How much money is my business actually making? How profitable is each line of my business? How does my margin differ by candidate source? What is my average profit per interview for a given team or segment? These questions, when answered, enables you to understand how different costs impact profitability, which you can then use to inform strategic decisions.
- Hours Worked: Simply put, this KPI is the number of hours your workers have clocked for their active placements. With visibility into how hours-worked are trending over time and making year-over-year comparisons, you can better understand growth areas or potential trouble with clients. You can get more targeted by segmenting this data by geography, client, role, and more. This can also uncover how many overtime hours are being clocked, which could inform additional decisions to hire more candidates or review the shifts. Additionally, understanding how hours-worked is trending can enable much more accurate operational and financial forecasting for weeks and months to come.
- Billing and Collections Effectiveness (DSO and Invoice Aging): Days Sales Outstanding (DSO) and Invoice Aging are two different metrics that combine to provide valuable insight around the effectiveness of billing and collections processes.DSO measures the average collection period, by providing the average number of days it takes a company to collect payment after invoicing. And, Invoice Aging shows the prevalence of invoices that have gone unpaid over a certain number of days, often in increments of 30 days. These metrics work well together as DSO provides a holistic view of how effective your billing and collections are, while Invoice Aging helps identify problem areas.
- Invoice Accuracy: Invoice Accuracy is the proportion of invoices that are rejected by clients and require adjustments before resubmittal. Invoice aging is an effective way to evaluate the efficiency and effectiveness of your invoicing process. The lower the percentage of invoice accuracy, the more time being spent on invoice creation and the greater the opportunity for improvement.
- Timesheet Efficiency: Timesheet efficiency refers to the ability to quickly and accurately collect timesheets and approvals from candidates and clients. It’s helpful to measure manual and late timesheets as weekly volume as well as a percentage of all timesheets. Evaluating timesheet efficiency is focused on the amount of manual work required to complete the task, such as following up with candidates to submit timesheets or client approvers for timesheet approvals. However, with an automated BI solution like Chameleon’s reporting solution, we can help you keep track of these past and incoming timesheets so you can close your books more efficiently.