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How do I get control of constantly changing client billings that are created outside of Accounting?

Shannon Norman's Profile

accountant workflow & invoice creationI am the new accountant for a business that's in a industry that's also new for me. I spent the last 13 years in a company that was time & billing driven. We billed clients based on timesheets entered by employees working on various projects and expenses charged to projects through AP and expense reports. We had some fixed fee engagements, but my department always received copies of contracts and engagement letters--we were the keeper of those documents. In my new company, all revenue is based on fees. I don't have all of the contracts, so I don't know if I'm billing everything I should be billing each month. Bills are created by the project directors and often must be approved by the client prior to being finalized. Executive management wants the books closed by the 15th of each month, however I am unable to create the invoice for our largest client until the 15th of each month and normally this invoice amount will change in about 2 months. I need advice/recommendations for getting control of my billing situation and what to do when I receive a revision to an invoice that was issued 3 months ago (this is more the rule than the exception here), or when it's November and I receive an invoice for June work that was issued to the client but never sent to accounting for entry into the system, the unidentified payment is sitting in suspense, and June and September compliance certificates have been provided to our bank--do I enter in June or November? We use QuickBooks Enterprise (also new to me), but I have not found a way to create a paper trail for invoice revisions. Thanks in advance!


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

There are a bunch of issues identified, all of which are important. I am going to try an address two of the issues -

1) Project Directors create bills with client approval - This process is prime for abuse, as Project Directors can blame the clients for any delayed billing.

The first step is to understand the company’s policy on billing deadlines. Is there a documented timeline established by Executive Management of when billings should be completed? If there is a policy and it is being abused – collect data of abuse and provide to Executive Management for them to address. I have never met a Senior Manager that when presented with the data, that their rules are not being followed, will not act. If there is not a billing policy, that needs to be resolved.

2) Management deadline for closing books on 15th of each month, which would exclude current fees for the largest client.

Flowchart your process. Show all barriers to success and present to Executive Management, including billing delays. It will be clear if the 15th as a deadline is possible or not. If you don’t have a billing policy, this exercise may prompt the development of a policy.

I have worked with many Accounting departments. You are a service that takes much of the blame when things go wrong. But you also have one very large advantage. You are the keeper of all the data. Use the data to identify issues and recommend the appropriate business policy changes.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

In addition to the fine points Regis makes, let's get back to your point of "you don't have the contracts".

This is an area that must be resolved forthwith. The firm made a contract for a reason, and it wasn't to lock the contract behind a closed door and forget about it.

Bring this to the attention of senior management and highlight the lack of internal controls due to the unavailability of these crucial documents.

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

1. Project Directors creating the invoice is an INTERNAL CONTROL issue. Take control of it. If the PD has to sign off on it, then so be it.
2. Clients having to "approve" invoices is a bad practice and highly unusual (to me). At the most, they can have an advance copy so they can comment on it, but NOT for their "approval". If it has to also go through PD, then he can sign off on it. If this is in the contract, this is highly unusual and the practice should be stopped. At the very least, deadlines should be laid out for their comments (or so called approval).
3. As Wayne said, Contracts should be in YOUR possession or at the very least, have access to it. Since the PD is creating the invoice and you do NOT have access to the contracts, YOU are flying blind and do NOT have any CONTROL on the billing side aside from entering what you receive.
4. Correction of previously finalized invoices (especially if it is already included in a closed month/year) is a bad practice. You can issue a NEW adjusting invoice but not correct an invoice that was finalized and included in previously closed months/year.
5. If you originate the invoice, you won't have problems receiving "June" invoices you have no knowledge of in November. At least you received the payment for it (sitting in suspense).
6. If you are signing the compliance certificates, it is YOUR name on the line.

I think this is your best argument (to management)......closing the books means creating (and presenting) the financials for the company with the right numbers and the current practices prevent you from doing so.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Some of the pains you describe seem to point to an absence of processes and controls. Anybody doing anything anyhow is not a process, nor a way to run the business.
But, to get new processes in place, you'll need to get top exec buy in to new policies that they will follow themselves.

A useful technique is to facilitate a series of sessions to:
-define the current state (of "no processes")
-analyse them for pains and issues
-design future state processes
-adopt the new processes
-measure improvement in adherence to those processes

Sometimes an outsider can help get the message across.



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