Staff based or task based billing in WorkflowMax?

One of the lesser known and often-missed settings in WorkflowMax is the billing basis question available in the Organisation settings. This single setting dramatically changes the way you use WorkflowMax for quoting, job management and invoicing. There is no one best way that suits every business and seemingly identical businesses from within the same industry can have this option set differently based on how they compete, how they quote and how they invoice. This short article tells you everything you need to know to make sure you’ve made the right choice for your business. It could make you more money on your next invoice.

The Options
This simple setting offers only two options: Staff Based Billing or Task-Based Billing and too often. We find this setting arbitrarily set and unknowingly costing businesses thousands of dollars in miscalculated monthly revenues. This setting can be changed at any time but shouldn’t be done light-heartedly as it will affect all future invoices. We recommend talking to one of our experts and making a plan before you do so.

Staff Based Billing
Staff Based Billing describes the way you make money in your business. It says that you sell the services of your staff in order to make money. This is commonly used in professional services, architecture, surveying, engineering, construction, trades, accounting, legal, creative, design, advertising and a range of other industries. If you’re not in this list check with us, chances are good we’ve worked in your industry before.

Task-Based Billing
Task-Based Billing also describes you make money in your business and might sometimes include any of the industries already mentioned depending on how your business competes, prices and invoices its services. In contrast to the Staff Based Billing option, this option says that I make money by charging for a product or process. The distinction and assumption applied here are at your staff are mostly interchangeable or share the same or similar set of skills. It assumes that two different staff performing the same function will be priced and invoiced the same. We see this most often in Aluminium, Joinery, Construction, Trades and Custom Manufacturers. Again, If you’re not in this list check with us, chances are good we’ve worked in your industry before.

Neither or Both Options Describe My Business
We hear this often which where some of the confusion lies. An architecture practice might charge all project management time at $165 per hour regardless of who performs the task. Is this task based billing? Yes, but because most of the services performed in this practice are valued at the seniority of the person performing them we’d still select the Staff Based method and use Custom Task Rates to default the correct PM rate. The opposite can also be true. Take the scenario where a foreman is charged a foreman’s rate regardless of whether that person is swinging a hammer or supervising a crew. Is this staff based billing? Yes, because we value the person’s skills over the task they perform.

“But I Don’t Charge Time, I Quote and Invoice based on Fixed Pricing”

We hear this often too and the movement to value-based invoicing is a growing trend in a lot of industries. This adds to the confusion around this setting and is often caused by people confusing how we invoice with how we value our services. Even if we never charge an hourly rate for our teams time in most cases we should still apply a value to this time and we should certainly apply a cost. The question remains the same but becomes for reporting focused: how do I want to value my staff’s time? Is it based on what they’re working on who they are?

What to do if you need to change
Changing from Task-based to Staff based billing will affect your value of Work In Progress, Financial Reports and the way WorkflowMax calculates your next invoice. What’s important here is that you pick a date that fits your billing cycle and sticks to it. You’ll also need to communicate the reason and impact of the change to the remainder of your management.

If you’d like to discuss the best WorkflowMax settings for your business I’d recommend booking a quick session with us using this link.

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