Low to zero touch invoicing, part 2: contract billing

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    Written by HarmonyPSA on 2018-04-03 Last updated 2018-04-13 - 2 minute read

If you’ve worked in the finance department of a company that produces regular monthly, quarterly or annual contract invoices, you’ve probably seen the spreadsheet at the end of the universe that controls how much is billed when.

On the face of it, contract billing is simpler than timesheet billing. The amount is determined by the contract and just has to be keyed onto an invoice - what could be easier? No need to worry about automating that…

And if nothing ever changed and sales were slow, that would be true.

With timesheets, the billing challenge is about timeliness, quality and correctness. With contract billing, the problems revolve around consistent data capture and management. So, staying on top of the sales cycle, contract execution, cancellations, service commencement, change management etc.

For a company using a non-transactional CRM (almost all companies fit this category), the modelling of the payment schedule on a contract is going to be manual. Plus contract billing is always date dependent. The date dependency brings other parties to the table to agree the point at which the service commenced and its relationship to the invoicing triggers. Someone is going to be tasked with typing this lot into a system of some sort, frequently a spreadsheet, as systems that can model anything but the simplest recurring billing are rare.

However, the real problems start with after the first invoice has been raised. Challenges from the customer over when the invoicing should actually start, varying quantities, early terminations leading to partial credit notes etc. All these have to flow from the account manager to the back office, be picked up, acted upon, contract amendment issued and signed, records updated, spreadsheets updated, invoices or credit notes raised, sometimes leading to further challenges etc… And that’s without thinking about deferred revenue management. All messy and error-prone processes that are manual, time-consuming, wasteful and inhibitors to growth.

As far away from a zero touch process as can be imagined…..

Applying the principles of building quality into a process must begin with an executional (or transactional) CRM. What this means is that the contract (and any variations) are actually executed in the CRM platform, entered once, agreed by the customer and then allowed to flow through the system with no-one editing it, only adding value, such as stating when to start billing.

A correctly modelled executional CRM platform such as Harmony will model these behaviours and use that modelling to produce a contract. This is far better and less likely to generate errors (or disputes) than a paper contract that has to be interpreted (modelled) in a rigid system after execution. The process model eliminates errors at the start.

As the same process model with follow changes (new services added, others cancelled), the contract and associated cash flows are automatically updated as are other changes such as price indexation.

This not only eliminates the data capture issue, it kills the spreadsheet and provides a platform for automated billing. With the v4.14 release of Harmony, a contract schedule can be set to self-invoice. What this means is that once the order is signed by the customer, a Finance person simply enters the start date and invoices are automatically created, posted, emailed to the customer and if Bluesnap automation is used, the cash automatically collected on the due date.

A true zero touch process that can happen while you sleep.

Sales execute a contract, Finance just add a date and the money flows into your account. This is the point of Harmony.

Read More

Low to zero touch invoicing part 1: billing time
4 advantages of B2B online invoicing
The benefits of automation 
Why we're aiming for a touch-free work to cash cycle

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About the Author: Harmony Business Systems Ltd (HBS) is the company behind HarmonyPSA, the most complete cloud PSA software on the market. Developed with functionality to cater for even the most complex needs of MSPs, VARs, ISVs and Professional Services organisations, HarmonyPSA truly is the next generation of PSA systems. HBS is an independent company based in the UK. Follow HarmonyPSA on


Tags: Business, timesheet-to-billing, automated invoicing

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