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Business Technology

How To Use Timesheets For More Accurate Invoicing

By February 2019August 24th, 2021No Comments
Beyond Accounting advice Timesheets For More Accurate Invoicing

When starting out in business, you’re simply happy to have clients in the books and to be regularly invoicing them! At this early stage, pricing projects can be ad hoc, with numbers roughly drawn from employees’ wages and an estimate of how long each project may take. However, as your company grows, this off-the-cuff approach can end up costing you money as well as clients, if you’re not careful.

That’s why at Beyond, we use time management software, or timesheets, to keep track of the finer details such as billable hours, who is being paid to do what and for how much, profitability, and any extra expenses incurred. Many of our clients use their own preferred timesheets, so we thought it would be helpful to do a roundup of our three favourite time management tools that integrate with Xero!

Top 3 time management tools that integrate with Xero

Harvest – “Track time your way”

One of our clients, bigO, is a fan of this time and expenses tracking tool. bigO is a creative agency/production company, so their team are constantly juggling various big projects. Effective time management is essential to their success, and Harvest is their chosen tool for keeping on top of it all.

So how does Harvest work? All your projects are set up in Harvest, and there are a few ways you can choose to price them. For example, you could be working on a fixed fee project, such as building a €30,000 website. In this case, you would measure the profitability of this project by tracking your time against the fixed price, while also tracking any extra expenses along the way. In the final reports, you’ll see how profitable or not the project was based on the fee you charged at the beginning. Alternatively, you could calculate your fee based on billable hours.

In this scenario, every employee and contractor has their own billable cost per hour. Everyone who is working on the project will track their time in the project tasks and detail exactly how that time was spent. They can also record any extra expenses here. With these kinds of insights at hand, you can always account for how much time was spent on a project, how much that time cost and why that time was necessary.

Integrating Harvest with Xero is simple. When you create your invoices in Harvest, you can send the finalised version across to Xero so that it appears in your accounting software as revenue for that client. Your clients should already be set up in your Xero account. To make life even easier, you can open the invoice in Xero, click on it to view it in Harvest and see those finer details.

Avaza – “Timesheets, Done Right”

Avaza is a time tracking solution that we have seen handle large-scale projects very well. Our client, a construction engineering company, uses it and for any project they would need to accurately keep track of engineers, architects, designers, etc. Avaza enables you to collect timesheets from your team on a daily or weekly basis and detail exactly what they have spent time on. This includes billable as well as non-billable hours.

Avaza’s winning feature is its reporting capabilities. With in-depth reports, you can determine top-level information such as which projects were profitable, but you can also dig deeper and find out which engineers should be assigned to different projects. For example, if some engineers are too expensive or if you have too many expensive engineers working on the one project. With these insights, your timesheets also become a valuable resource for project management.

Just like Harvest, you can create your invoices in Avaza and then post them through to Xero where you can view them. Avaza allows for customisability regarding colours and logos so that your invoices are appropriately branded for each client. They even have an integrated translation feature for any clients who prefer their invoices in a specific language. When the invoice has gone through and been paid into your bank account, you can then reconcile it in Xero.

Xero Projects – “A simple way to keep track of time and costs”

Of course, if you’re a Xero client, you don’t have to use a third-party app because Xero has its own time tracking solution called Projects. You set up a project in Xero so everyone working on that project can input the time they spent on it, any expenses they incurred, what tasks within the project they worked on and they can even upload their receipts. You get detailed time reports at the end of each month per person, per project, and from there, you can simply backtrack to see how profitable your projects were.

The only downside is that Projects is best suited to one-off projects because it doesn’t manage ongoing tasks particularly well. Take a job such as administration, for example. You would have to set up a project specifically for administration which can be a bit clunky. Projects is a simple, streamlined solution for a company that doesn’t need to track every minute detail of a project, but rather would like to compare the profitability of different projects over time and find out how much they could really be invoicing based on time and expenses.

If you are already a Xero customer, you can trial the first month for free. However, if your find that Projects isn’t customisable enough for your business, then check out WorkflowMax, Xero’s project management tool. WorkflowMax is like the big brother of Projects and is used by companies with more advanced needs.

At Beyond, we take a holistic approach to business and actively engage with our clients to help them achieve their business goals. Get in contact today for a chat about where you are now and where you want to be.