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Term Definition
Professional Service Billing is the process of billing a client for professional services rendered. Professional services organizations such as legal, engineering, accounting and high tech consulting firms bill for services rather than products.
Billing in professional services organizations depends on detailed time and expense data. This data is tracked and then billed to specific customers. The data is tracked through time and billing applications, which can be manual, electronic, or web-based. Time and billing software is often used and is helpful to organizations with little to no product inventory to sell and maintain.
To provide an example of Professional Service Billing, let us assume that you hire an attorney to manage a licensing contract negotiation. The attorney will bill you for all of the charges related to providing you with that service. The attorney might use a professional services timesheet to keep track of the time and expenses associated with your project. The timesheet might include items such as time spent reviewing the contract, negotiating with the opposing attorney, writing new contract terms, etc. If the attorney made phone calls, or attended meetings in relation to your project, you would also be charged for the time and expense of the phone calls, time spent at the meeting and transportation costs. Professional Service Billing is also an integral part of project management. Time and expenses are carefully tracked and billed to the client. This also enables companies to plan time, labor, and job estimation costs for future projects with a similar scope of work.
The task of professional service billing can be optimized when automated. Some companies use multiple systems, administrative staff, and manual processes to track time for payroll, projects, and professional services billing. Multiple tracking systems can result in redundant data entry, errors and multiple approvals. Time and billing applications can enable organizations to enter the data once, approve it once and then the information is used for payroll, project management, billing and reporting purposes.
Area of Application
Project Management
Time and Expense
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