Self-employment is the choice of many engineers. They can set their own hours, choose their projects, and even set their own rate. What’s not to love? However, many engineers who decide to work for themselves don’t think about the management side of the business. This includes several important points. One of the most important is billing. If you’re not on top of your billing, how do you know if you’re turning a profit? We’ve put together this list of X billing tips for engineers to help you stay on top of the money that should be coming into your business.
Understand Why Billing Is Important
So, just why is billing so important? It shows what should be coming into your business. Yet, creating and sending out accurate bills is just the start. You must also ensure that payments are received and applied to client accounts in a timely manner. Otherwise, you won’t know which accounts are past due. More importantly, you won’t have a clear picture of how well (or how poorly) your business is doing. If you think that you’d like to seek funding to expand your firm, the lender will be interested in what’s coming into your business…and what should be coming in and isn’t. Your accounts receivable plays an enormous role in determining whether your company is a good a risk for a lender.
Send Out Bills on a Regular Basis
One of the best billing tips for engineers we have for you is also one of the easiest to implement. Make sure that you’re sending out bills on a regular basis. Review your service agreement. What does it say? Does it say that you’ll bill monthly or at the end of the project? Billing on a regular basis improves the likelihood that you’ll get paid on time.
Review Your Current Billing Process
It’s hard to make the appropriate changes if you don’t know what’s going on. For this, you must do more than just read over procedures you created. You must also determine which procedures are being followed, which ones aren’t being followed, which procedures are working well, and which ones are not. The goal is to look for inefficiencies. Does the process get hung up somewhere? For example, are you doing your own billing? Do you fall behind because you don’t have the time to take care of it?
Provide Multiple Payment Methods for Clients
Another important billing tip for engineers has to do with ensuring that clients have options. Instead of waiting for checks, provide your clients with the option to pay by debit card or credit card through an online portal. If you’re using accounting software, it may give you the ability to set that up with just a few clicks.
Follow-Up on Past Due Accounts
Don’t wait to follow-up on accounts that haven’t been paid on time. Start following-up on past due accounts the day after they are past due. The longer an unpaid account sits, the harder it is to collect on it.
Get Help with Your Billing
If you’re an engineer and you need help staying on top of your billing and incoming payments, you qualify for a free, no obligation consultation. Clients ARM has more than 30 years of experience with billing and collections and we want to show you how we can help.