Progress Billing: The Invoicing Methodology Used For Success
When one dares to enter the realm of business they know going into it just how daunting it can be, however, they also understand the potential rewards that lay ahead. Every business owner searches day and night for new ways in order for their business to find further success, one of these ways could be progress billing.
A business’ invoicing system plays a vital role in how well operations are being handled. An exceptional invoicing system can be all the difference in the world to a business and here at MBSATA we recommend progress billing as your invoice methodology.
Progress billing is when vendors are paid periodically for completing “milestones” of work on a project, instead of being paid the entire sum upfront. We believe that there are five principal reasons why progress billing should be implemented to your business. Improved cash flow, more organized scheduling, free of ambiguity, low risk, and increased employee motivation.
Success Comes In The Cash Flow
Cash flow is vital to the success of any business, it is imperative that management does everything within its power to find ways to elevate it. Using progress billing is one of the most effective ways in which your business’ cash flow will be taken to new heights.
With progress billing your business will consistently have money flowing into it and ready at your disposal. You need not worry anymore about not having the capital to purchase the necessary resources needed to complete the further stages of a project, that means you also avoid having to go into debt by taking out loans. Without having to take out loans from a bank and go into financing your debts, your business’ balance sheet will be much healthier.
Imagine that work on your project is going amazingly, your team is amped up and moving along while exceeding expectations. Then you realize that you may need to halt production due to not having the required funds needed to buy more materials. That has a negative domino effect on your business as a whole, firstly the halted production will upset the consumers you are already working with. You want to ensure the satisfaction of every client so they can recommend your business to others or want to hire you again in the future. Secondly, it will backlog your work schedule and have an obstructive impact on the rest of your projects. Progress billing makes certain that you and your business will never have to confront these issues ever again.
At MBSATA we have decades of experience working with clients on their progress billing needs. If you want your business to utilize progress billing, please contact us at firstname.lastname@example.org.
Sophisticated Schedules and Alleviated Ambiguity
There is nothing more detrimental to the success of a project than confusing and conflicting timetables. The vendor says one thing while the customers says another and time is wasted away trying to just merely get things back on track. Progress billing by its nature promotes scheduling that works for everyone.
With progress billing both sides will come to a mutual understanding about the timeframe for a project. If you are a business owner you can sympathize with the conflicts that come with disagreeing with your customers.
That will be a thing of the past when you use progress billing, it will ensure that there is a strict schedule to be followed by your business and it will be well documented so that you can always reference it if need be. By having a tight schedule in place your work will be more efficient and will better satisfy your customers… which means more business will be on the way.
There is truly no room for ambiguity in the business world. Miscommunication is the killer of quality work, you just can not have it. Progress billing puts an emphasis on scheduling and in turn will diminish any ambiguity between parties so that you know exactly what you have to do. If a customer wants 25% of a house built by a certain date, you build 25% of the house by then. It simplifies the work process so the only thing you have to concern yourself with is the work itself instead of the avoidable back and forth disagreements between you and your clients.
Good For Your Customers, Good For Your Employees
In progress billing the vendors will be paid as the work is completed, that gives that business’ employees motivation to work harder and more efficiently so that they can get paid faster and more often. It gives them incentive to go the extra mile while working, because putting in that little amount of extra energy can be the difference between getting paid 1-2 days earlier. With all of your business’ employees sharing similar sentiments of being paid, that will have a monumentally positive ripple effect and production will increase drastically.
With your employees more motivated than ever to get work done, it will increase the amount of work you can actually do. By completing projects with more efficiency that means there is more work that can be done. You do not want to be a business that drags along on one or a few projects and watches opportunities pass them by. Swifter work means more opportunities. That means more revenue for your business.
Customers are much more likely to be enticed to give you their business if there proves to be a significantly low risk to their finances. We have all heard the horror stories about customers losing out on their deposits or waiting remarkably longer periods of time for work to be completed than was anticipated.
Progress billing provides customers a security blank in which they do not have to give up money unless work is complete. Another little, yet albeit important, positive impact this can have on your business is that it provides a cushion for your business in the event of unforeseen turmoil. Nobody can predict the future and if something were to happen to your business that might delay the projects you are working on, customers may take it easier on their future reviews knowing that they still have their money. A business can be sunk by continuous negative reviews that are spread online, word of mouth, and so on. Progress billing can ease any murky waters that your business may find itself in.
Progress Billing has a plethora of benefits that are to be reaped by those who choose to use it. Improved cash flow, better scheduling, no ambiguity, low risk to your customers, and increased employee motivation.
The reasons mentioned are what makes progress billing the effective invoicing tool that it is. All business owners look for new ways to improve their enterprises any way they can, applying progress billing will be just what your business needs as you continue marching towards success.
For information on how MBSATA can help you implement progressive billing, please contact us at email@example.com to learn more.
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