The Do's and Don'ts of Billing Time and Expenses

If your time and expenses are your main source of revenue, you don't want to take chances with your livelihood. Use this simple list of dos and don'ts to help maximize your efficiency, and avoid tracking and accounting problems.

• Track your time and expenses immediately and accurately. If you work four billable hours on Monday, don't wait until Friday to enter those hours in your ledger; this can only lead to mistakes. Also, if you make a practice of reporting your time and expenses immediately and accurately, customers will be less likely to dispute their invoices.
• Set a billing period and stick to it. If your billing period is one week, prepare and send your invoices at the end of the week, not the end of the month. Waiting to send your invoices only adds unnecessary days or weeks to your cash-conversion process.
• Treat your time, expense reports, and invoices as cash. Look at it this way: without them, you'll never see a dime for your hard work. Consider them the most important documents for your business, particularly if you bill time as your primary source of revenue.
• Give your customers an incentive to pay their bills early. For example, offer a two- to three-percent discount for payment within 10 days.

• Give your customers an excuse for not paying on time. For example, if you call them to ask about late payment, don't ask them if they received the bill.
• Delay in preparing and sending your invoices to customers. This only prolongs the amount of time it takes to see those invoices turned into cash, and it can leave your company with an anemic cash flow.
• Think you still have to write down time and expenses with a pen and paper. If this is the method you prefer, fine. But there are also a number of computer and online programs available to track time and expenses, including some that interface with a cell phone or Palm Pilot. This can make it easier to report your time and expenses when you are away from your office or computer.