Time and Billing Software For Small Firms

Written by John J. Xenakis for CFO.com, Nov 29, 2000.

How one firm uses a new service to keep track of its billable hours.

(Also this week: Computer Associates announces software leasing, and tells us why dealing with CA in the past was so acrimonious.)

Keeping precise track of time is an important part of the job of many types of professionals, including accountants and lawyers. Complicating the time tracking job is the fact that this data may be highly sensitive or proprietary, since it affects client billing and employee payrolls.

Nichols Dezenhall CMG, a crisis management public relations firm with 27 employees in Washington DC, solved that problem by taking advantage of a new service from the vendor of the time and billing program Timeslips to store the company's billing data on the vendor's server rather than the customer's server.

Larger businesses with midrange or high-end accounting systems usually have some means to track employees' time through their accounting software. As a small business, Nichols Dezenhall did not have such a solution available, and it considered a number of other solutions that many small businesses (as well as small departments of larger companies) look at when they wanted to replace their paper-based system five years ago.

"We were going to have a special program written by consultants, but that program was going to cost $5,000," says Jennifer Hirshon, the agency's director of administration and development. The plan was that employees would track their time and expenses on paper, and Hirshon would type the times into the new application program.

The company ended up purchasing the packaged application program called Timeslips, a program which inputs time and expense data for employees, and produces bills, payroll data, and reports.

Now move forward to this year. "My job was changing, and Timeslips didn't eliminate all the time I had to spend entering data, which after five years I found was boring and mundane, because I had to read people's handwriting," says Hirshon.

The obvious solution would be to go to some sort of client/server version of Timeslips. However, this has technical problems, as well as problems having to do with the sensitive nature of the data.

Installing any client/server program on a local area network for a small business is complex, and requires one or more employees with sophisticated technical knowledge, often much more technical knowledge than their bosses. Inevitably, these "computer wizards" have access to all the data on the server. These problems can be solved, of course, and many companies have done so, but usually by hiring more people and installing expensive safeguards.

This is one of the reasons why even small installations of midrange accounting software can run into many tens of thousands of dollars.

However, just to illustrate how out of line these costs are for Nichols Dezenhall, the company uses M.Y.O.B. Accounting from BestWare. M.Y.O.B. is a low-end small business accounting product, whose major competitors are Peachtree and QuickBooks, and sells for around $200.

So a big client/server installation was out of the question, but it turns out that Sage U.S., the vendor of Timeslips, has a fairly low-cost solution called eCenter. Hirshon purchased Timeslips eCenter licenses for each of the employees' computers and laptops, and allowed them to input their own time and billing information while they were on the job.

Employees now fill out their own online time slips, and when they're done, the data is sent out to the Timeslips server. However, that server isn't on Nichols Dezenhall's premises, as would be the case in an ordinary client/server configuration. The employees' time slip data goes out over the Internet to a server run by Sage expressly for this purpose.

As administrator, Hirshon can download all the employees' data back into her copy of the software, and prepare the monthly bills and reports. Hirshon no longer has to input the time slip data herself.

And the cost? Roughly $1,000 per year for all 27 employees, a small fraction of what it would cost to securely implement and configure a client/server version of almost any financial software application.

According to Hirshon, both employees and clients are delighted with the result. "We're in the second month of this, and the account managers are surprised because we're billing more accurately," says Hirshon.

In the old days, "before each billing cycle we'd have a lengthy review process, and everyone would have to correct things, since there were mistakes. Now it's great - everyone just uses the client codes that are right there on the screen, and it's mistake free for them."

As for the clients, "They're now asking for more details on their invoices," she says. With the old paper system, "I had never written on bills what activities were being billed, both because I couldn't read people's writing, and because some people wrote nothing. Now the people can write then own descriptions, and they go out with the bills."

Hirshon also offers one unconventional little bit of wisdom that works for her, but may not work for other people.

She likes the fact that after Timeslips prints out the billing invoices, she then manually enters the invoice data into the company's accounting system, M.Y.O.B. This is not a requirement of Timeslips, we hasten to point out, but Hirshon makes a virtue out of manually entering the data a second time.

"The one thing I've always liked about running two systems simultaneously is that you have checks and balances -- you make sure that they come out with the same results," she says.

However, it is time consuming, and so Hirshon is planning in a couple of months to take advantage of features of both Timeslips and M.Y.O.B. to have Timeslips automatically export the invoice data to a file which M.Y.O.B. can then import.

Pricing and Competition

Single user versions of Timeslips software cost $399.95, with a streamlined Timeslips Express with fewer features selling for $129.95. The software can be purchased from the Web site, http://www.timeslips.com.

Sage U.S. has just come out with a client/server version of Timeslips, starting at $1,299.

However, small businesses should consider starting with eCenter (http://www.timeslipsecenter.com), the system that Nichols Dezenhall uses. You can try out a free online demo of the system at the web address. Using the system costs $49.95 per year per user, with a 40% for over 25 users.

Timeslips has been around for a long time. I first reviewed it in 1987, when it was being developed by a couple of kids out of their basement in Beverly, Mass. It became the computer industry's best selling general purpose time and billing program, and was acquired by Sage U.S. in 1997.

The product's major competitors have also been around for a long time, usually since the early 1980s, and are mainly targeted to law firms. Check out PC Law (http://www.pclaw.com) from Alumni Computer Group Inc., Juris (http://www.juris.com) from Juris Software, and TABS III (http://www.stilegal.com) from Software Technology Inc., if you'd like to take advantage of the special features these programs offer specifically targeted to law firms.

Computer Associates Inc. announces Software Leasing

Computer Associates announced a radical change in its marketing policy when it said that its software products will henceforth be made available on a monthly lease basis.

Instead of paying a one-time license for software, you pay a monthly leasing fee. You can terminate the lease or switch to another product at any time, but if you commit, for example, to paying $10 million a year to CA for 7 years, then you can lease any of CA's products during that period at a 20% discount.

In announcing the new policy, company president and CEO Sanjay Kumar said that in the old business model, after you've made the sale, "you're then stuck with a protracted, sometimes acrimonious negotiation where the customer is driving for long term predictability and you're driving for long term revenue. All of this happens towards the end of the quarter, making it very volatile." He indicated that the new business model should eliminate these problems completely.

(This is a modified version of an article that originally appeared on Nov 29, 2000 on CFO.com at this location. )