ETBureau: What are the prime reasons that service-based enterprises are witnessing a surge in their revenue leakage?
Aaron Harris: Time is money. Nowhere is that truer than in companies that rely on timesheets to drive billing. Timely, accurate timesheets directly impact revenue and profitability, allowing service companies to bill customers for work, set accurate prices and manage the people doing the work.
The current surge in revenue leakage can be attributed to a number of things. In today’s environment, customer retention and new projects are critical. When times are tough, it’s easy to not want to nickel and dime the customers, so employees have a tendency not to log all of their time.
This creates a problem for enterprises by not having a clear view of its employees’ efforts and utilization, which makes it difficult to know the true project profit, price future work, and maintain the right staffing levels. Regardless of billing for the work, companies need to track their time to ensure they have a clear understanding of their financial performance.
Accurate time tracking is a fundamentally difficult task for busy, multi-tasking, and often interrupted professionals. So, not only does time spent on timesheets detract from time spent on customers, but forgotten activities also go unbilled, leaving money on the table.
ETBureau: How can enterprises leverage innovative technologies to effectively manage billable hours?
Aaron Harris: Resourcing: Utilization figures are the backbone of any good resourcing program. In fact, in order to resource effectively, enterprises must know someone’s availability to be staffed on a project, which is the inverse of their projected or current utilization.
Hiring: If everyone on the team is at maximum utilization, then this is a strong indicator for the organizations that they should hire. Not only will it allow them to take the burden off some employees who are most likely overworked, but also employees to take on new work with this new employee.
Employee Happiness: Having an understanding of utilization in real-time allows managers to prevent a situation where an employee may become burnt out – in this situation, taking some of the load off this employee enables them to go back to living a more normal life. On the contrary, if someone’s utilization is constantly low, then this is a strong signal that the person is likely extremely bored or under-tasked at work.
Accurate utilization figures reveal who is busy and who’s not – allowing management to make a positive change in each employee’s life.
Understanding Project Status: Some projects are absolute time-sucks for the team members staffed on them. These employees are probably falling behind on their other projects because one project, in particular, is taking the majority of their time and effort.
Although the cause may not be immediately clear, understanding project-based utilization can lead management to start asking the right questions so they may change course as quickly as possible.
ETBureau: Manually tracking activities such as email is quite time consuming, resulting in organizations losing billable hours. How can enterprises address this effectively where employees and their employers win?
Aaron Harris: Accurately tracking time is hard. Because of this, people don’t like completing timesheets; they’re inaccurate and rarely done on time. With respect to emails specifically, a Harvard Business Review study of professional service firms estimated that 40% of service providers never tracked time spent reading or responding to emails. That’s a really big number.
By shifting away from traditional timesheets to AI-powered intelligent timesheets, employees have a quick and easy way to capture time with guided assistance. A digital personal assistant gathers work-related activities – like calendar events, emails, and computer activities – and presents them for review. The professional makes any adjustments and then drags and drops suggestions onto their timesheets.
Because the AI learns over time, the digital assistant gets smarter with every review, making time entry for the professional faster, easier, and more accurate. For the finance team, this leads to increased profitability, utilization, and billable time. The finance team also receives timesheets that are in sync and reconciled, allowing the business to scale without wasting time playing timesheet cops.
ETBureau: How can service-based enterprises leverage AI and machine learning to optimize productivity and employee cost?
Aaron Harris: Enterprises can leverage AI and machine learning to reconstruct every minute of the work week more accurately. AI-powered timesheets enable enterprises to capture billable time. Not only that, it increases the profits for enterprises by reducing revenue leakage from not billing or under-billing, increasing revenues and ensuring they can adequately track utilization.
With AI-powered timesheets, for e.g., an enterprise can correctly account for billable work worth of one hour lost billable per week based on a $200/hour billing rate, resulting in the enterprise generating over $10,000 in additional revenue annually per employee.
The finance teams can also benefit from the accelerated timesheet submission process. It helps them to track down overdue timesheets, so they can close the books on time. As timesheets provide comprehensive activity details of billable work, the generated invoices have higher accuracy. Furthermore, it allows Clients to know about the services they are paying for. This process accelerates payments and cash by reducing the likelihood of invoice disputes and trimming.
ETBureau: Which trends in the financial management industry will thrive, post the COVID-19 crisis?
Aaron Harris: COVID-19 has put the spotlight on the need for digital transformation. In an instant, everyone was working remotely, making traditional on-premises software a burden for most businesses.
If a company is relying on older, disconnected point solutions to run the business, the chances are good that it needs to take a hard look at whether the technology in use is helping or hindering business growth. Expect to see a surge in cloud-based financial management systems being implemented in 2021 and a move to further embrace the innovations like AI and machine learning.
Aaron is responsible for Sage’s technology strategy and software architecture. He has over 25 years of high-tech engineering experience in business applications and software development strategies. Previously a founding leader of Intacct, acquired by Sage in 2017, Aaron led the company’s product vision and technology direction, establishing what is now Sage Intacct as the innovation leader in cloud financial management solutions.