Harried small business owners often complain of losing revenue as various tasks keep them from billing clients on time.
However, with easy access to online billing and accounting services, there’s no reason why SMBs should lose money due to neglected invoicing, technology experts, say.
“Outsourced online services provide SMBs with low-cost, flexible payment plans and free up personnel to do business-oriented tasks,” according to Ricky Mak, an SMB and technology analyst for IDC Canada in Toronto.
A Canadian firm that realized the benefits of using an online billing service provider is JC Kelly Microsolutions, a data, telephone and Internet consulting company based in Toronto
The company has been using FreshBooks, an online billing service provider based in Toronto, for four years now to track assignment hours, send out invoices, and keep client billing records.
Prior to signing up with FreshBooks, Microsolutions employed an “in-house, ad hoc invoicing system,” according to Cavan Kelly, the firm’s owner.
“Each time I finished an assignment, I scribbled down the hours on a piece of paper. Later on I billed my client, if I didn’t happen to lose the paper.”
Quite often, Kelly said, he spends hours tracking invoicing records and some clients end up not being billed.
This is quite possibly the situation that many one-person or small businesses find themselves in, industry insiders say.
“Accounting is generally not the core competency of most SMB operators,” according to Carmi Levy, principal of technology consultancy firm AR Communications Inc.in Toronto.
“It makes sense for owners to not go it alone and instead subscribe to a software-as-a-service(SaaS)program.”
He said SaaS packages can effectively shift risks and expenditures such as software training, maintenance and security from the business owner to the service provider.
With FreshBooks, Microsolutions was able to increase revenue by as much as 15 per cent or about $50,000 to $60,000 per year.
The moment Kelly arrives at a client’s location he can initiate billing by simply logging on to the Internet from any computer and opening an account for that customer.
Monthly invoicing used to eat up at least half the day. Now it only takes 15 minutes each month for Kelly to send out all his invoices.
A major challenge for most SMBs is identifying the appropriate technology and finding the budget to pay for it, according to Mike McDerment, CEO for FreshBooks.
“Because of lack of awareness or budget constraints, most business owners end up using the wrong tools.”
McDerment said a large number of SMBs use applications such as Word and Excel to create invoices – a task that these products were not developed to do.
His company, which started out as a Web developing and hosting outfit ran into the same problem.
Back in 2003, McDerment used Word to create his invoices, often using a copy of a previous invoice as a template for his next bill.
“What happened was I usually saved over the original document and ended up losing that record.”
The online service he developed and launched in 2004 enables users to track time spent with a client, create invoices with company logos and send these by postal service or e-mail to clients.
They can also generate business activity reports that can be exported to the company database and accept payments via various payment services such as PayPal and Authorize.Net.
McDerment says software updates are made available to FreshBook’s’ more than 275,000 users almost instantly.
The service comes with backup, firewall, and encryption as well as customer support.
There are six packages to choose from including free service which allows users to manage up to three clients with essentially the same features present in the paid modules.
Paid packages range from $14 dollar a month for managing 25 clients to $149/month for 5,000 clients.
IDC’s Mak urges business owners to take the time to study how similar services and technology will impact their operations.
He said entrepreneurs should estimate the total cost of their downtime and consult with other business owner on their experience before signing up with a provider. “Shop around and use your peer network to find what’s right for you.”
Apart from FreshBooks other companies that offer online billing services include:IQ BackOffice, a California-based company that offers accounts payable and receivable services; ca4it.com, a network of chartered accounting firms that focus on bookkeeping, accounting and tax preparation; and BMP Outsourcing, a Toronto-based SMB service provider.