Invoicing can be a tedious process for any company, but there are ways to simplify the process and breeze through it every month. Here are some tips and tricks I use to manage the invoices for Harkcon.
Create an invoice template that can be used across multiple contracts. It will save time when creating new contract invoicing and helps standardize all the invoices. At Harkcon, I have two templates; one for Firm Fixed Price contracts and one for Time and Materials, but the majority of the two templates are the same. I build the templates to automate as much of the process as possible, so I only have to update a handful of sections per month.
Request information from project managers a few days before the end of the month. For many invoices at Harkcon, we have a brief description of work performed for the month. Most project managers can provide this information before the end of the month and when invoicing starts on the 1st of the...
One of the most powerful tools for a finance department is a reliable forecast. The challenge is creating one that you can rely on to make decisions. Today I’m going to focus on building a revenue forecast and what it takes to make it accurate.
Identify the Revenue you need to Track
At Harkcon, we track three types of revenue; Active Contracts, Unexecuted Option Periods, and Business Development. Typically companies will focus solely on their active contracts or guaranteed revenue. Harkcon likes to also look at revenue that isn’t guaranteed. Our unexecuted option periods are follow-on work for active contracts. Since they are not active and there is a chance that they won’t be exercised, we take the revenue and put a probability of it turning into an active contract on it. This is also called our expected value of the revenue. We apply a similar concept to our business development revenue. Contracts that we are currently biddin...
Determining what you charge for your product or service is a crucial part in any business. One way to help price products and services is by creating a pricing model. Here are three tips to creating an effective pricing model for any business.
Keep it Flexible
One of the challenges of creating a pricing model is balancing the level of detail needed for a particular product or service and the ability to reuse the model for other products and services. One mistake I made early on when developing a pricing model was trying to capture every single thing that could have a role in determining price. It made the model complex and difficult to manage. I have found that keeping the core pricing tools but removing all the pieces that were rarely used made the model flexible and easier to use across many different products and services. Create a space for the pricing manager to add the tools they need to support the core tools in the model. This way,...
When running a small business, a budget is a great tool to help manage expenses and forecast cash flow. Setting up a good budget can help make strategic financial decisions while minimizing the time you spend tracking expenses. Here are 5 tips to creating and managing an effective budget.
Use Your Accounting System – A great way to set up a budget is to align it with your accounting system. Your accounting system will have a chart of accounts that track different types of expenses based on accounting standards in your industry. Instead of coming up with new budget lines, use the same ones that are set up in the accounting system. When it comes to reconciling your budget, having the same accounts will save you time when mapping actual expenses to your budget. Bonus Tip: Some accounting systems have budget tools built into them, like QuickBooks. If you don’t need a customized budget, this is a great way to create a budget!