Maybe you are an IT consultant. Maybe you’re an IT manager with multiple projects or a remote IT department. Whatever your role, the need for time and expense reporting may have arrived.

Why track your services?
Many IT departments are rushing to:

  • Streamline and automate their business processes.
  • Improve efficiency.
  • Better utilize their manpower.
  • Protect, even increase, their budgets.

And there’s the rub. Alan Tyson says other departments that use IT services often don’t fully understand the value of IT. Tyson, who is president of DATABASICS, a vendor for time and expense reporting software, said, “Internal clients, when you come to them for an increased budget, are going to say, ‘Well, look, we really appreciate the help you gave us. But you didn’t spend that much time on it, and what you are asking for is excessive. We’re really not going to need any more IT resources next year.’”

Tyson added, “They all say this, hoping that another department will pay for it. And then, they are back at the trough on January 1st saying, ‘Hey, look. We just have a little problem here; we don’t really need that much, but could you send half your staff over here next week?’”

The only way IT departments can prove the time and money it takes to support internal departments is to keep good records, according to Tyson. “They need to keep detailed records of exactly what they did, [in order] to fend off criticism because when a division has problems, they often will turn to a support organization and blame them.”
With time and expense reporting, all activities and expenses within the entire project are recorded. Each project is treated like a business, with reports on its daily status, all time-on-task recorded, and all travel, expenses, problems, delays, and unusual events documented. Tyson said, “When a project manager says, ‘Why did we spend four hours on this particular task? It had been budgeted for one,’ you can explain that they (the client) missed your meeting, and you sat there for two hours—that kind of thing. It’s all there to report.” This software generally integrates with back-end accounting systems so the employee or consultant only enters the data once.
Professional services automation (PSA) software, which includes time and expense reporting, business development activities, knowledge management, resource allocation, and planning, “will soon prove irresistible to professional services providers that want to maximize profits in this highly competitive industry,” predicts the Aberdeen Group in its white paper, “Professional Services Automation.” Some benefits of the software include:

  • Automation of what has long been a manual and/or haphazard process.
  • Improved staff utilization and better skills tracking.
  • Increased employee productivity.
  • Increased number of satisfied customers.
  • Improved organizational efficiency.
  • Improved profitability.
  • Improved use of intellectual assets.
  • Reduction of non-billable time.

Do you need PSA software?
Here’s a checklist to help determine whether your IT function is a good candidate for PSA software:

  • You capture much of your intellectual knowledge in proposals and methodologies.
  • You need to access your company’s knowledge more effectively to find solutions for clients.
  • You have multiple locations.
  • You have global locations.
  • You run multiple projects.
  • You feel the need for standardization of business practices in your company.
  • Your core business processes—including proposals, contracts, resources allocation, meeting notes, processes, and knowledge management—need to be automated.

Web-enabled reporting
The Aberdeen report refers to Niku Corporation, which has a family of Web-enabled products that integrate data and processes. DATABASICS’ time and expense reporting products are also Web-based systems for reporting time, travel, and expenses. Jo Anne Lang, implementation services manager at DocuCorp International, a multi-location firm, said her company was impressed with the Web-enabled features of DATABASICS’ two products, TimeSite and ExpenSite. She said, “We were looking at the Web-based [features] and some of the functionality and the expense portion, since we didn’t have the expense part in our [homegrown] product.” DocuCorp uses expense and time reporting to record all staff’s time and expenses and for tracking billable and non-billable time.

Debra Weary, assistant general manager of IT consulting firm IKON Technology Services in McLean, VA, said, “We’re Web-enabled. In an IT world, that’s extremely valuable because we’re spread out. We have a kind of virtual office, where people work out of their homes or at the client site. We don’t necessarily see them, but the communications need to go on.” Lang agrees. She also uses time and expense reporting to improve communication among her firm’s multiple locations.

Time reporting
When you have to manage multiple projects over geographically dispersed locations, time reporting software can help by:

  • Capturing actual hours per task.
  • Projecting costs.
  • Paying your workforce.
  • Measuring performance.
  • Performing an analysis of actual time versus budgeted time.
  • Billing clients.

Lang noted, “We’re a software company, so we bill our clients for the time we spend on their projects and implementation.”

Expense reporting
Expense reporting software often controls per diem expense amounts, where you can set the limits. You can also request that expenses be distributed across multiple clients or projects. Other benefits include:

  • Mileage reimbursements.
  • Workflow approvals.
  • Reduced cost of processing.
  • Currency conversion.
  • Prompt reimbursements.

According to Tyson, “This software allows you to allocate costs and expenses over different projects at a detailed level. This does two things for you. One, it allows you to get a complete picture of your costs for a project, including labor, employee expense, and other direct costs. Unless you can get the employee expense piece in there at a detailed project level, you can’t determine your profitability. Another thing that it does is give you a strong bill-back capability.”

Bill back
Tyson said, “The IT manager is usually involved in a number of high-pressure initiatives and is often in a bill-back situation. They have to justify the resources they get, and the only way is by tracking in detail what exactly they are doing for each one of their internal clients.

“Bill back is very important to these professional service organizations,” Tyson said. “An enormous amount of money is spent on travel. In order for the company to get reimbursed, you have to be able to present a convincing invoice.” He added, “This could be for internal clients, too. If you have to travel out to a division on the West Coast to help them, you want to have that charged against that division. You don’t want to necessarily eat that cost. At least you have to be able to show them that you have this kind of travel expense associated with their project. An internal IT organization can have its budget eaten up by travel. So it is very important to be able to justify bills or charge backs for expense.”

Faster and more accurate recording
Weary said, “At IKON, we use [reporting software] for time entry and expense. As a professional services firm, capturing time is critical to the whole way we generate our revenue. Before we used it, we had a homegrown system. When we implemented DATABASICS, we could do the process of capturing time, approving time, and turning that into an invoice to collect revenue much faster than we did in the past, and with less administrative or operational staff.” She added, “We reduced our processing time probably by 20 percent and increased our accuracy by about 10 percent.”

Serving the needs of small and large firms
Tyson admits his firm has a lot of competitors. “It’s a very crowded marketplace at this point,” he said. According to the Aberdeen Group white paper, professional services automation software “will have a dramatic, and positive, effect on the bottom line of service organizations.”

Time and expense reporting can be helpful to even small enterprises, according to Tyson. “We have companies that are using the product who have only 50 users, and I think our largest client right now is 12,000 users. So there is a lot of utility for any company that has to get control of billing or internal charge back and needs to know where it stands on projects.”

He added, “If your projects are complex enough or go long enough, you really need to have some kind of automated tracking system.”
We’d like to hear about experiences you’ve had with time and expense software. To share your thoughts, or to suggest a Manager 301 topic you’d like us to cover, post a comment below or send us an e-mail .