6 Easy Steps to Streamline Your MSPs Invoicing
What we’ll cover today:
How to increase profits by 5-15%
Why you must streamline your invoicing
We saved 26 MSPs tons of lost revenue last year
An outline of the 6-step process
It starts with understanding…
…& ends with copying the Contract Templates
How long does it take to get there?
Your next steps are easy…
Welcome back to our new series on improving your MSP in 2023. I hope that the New Year has been good to you so far. As promised, this series aims to provide valuable guidance you can implement NOW to grow and improve your MSP in 2023.
This week’s topic: streamlining your invoicing.
Why is this so important, you ask?
Because most MSPs are losing 5-15% of MRR in profits, that’s why! The losses are in non-MSA work that is being written off as Managed Services Support.
How can you tell? Look at the ratio of MRR to T&M invoicing to Managed Service Clients. When an MSP captures all the non-MSA work, the ratio will be somewhere north of 18%.
Note: “All work is billable! If we are entitled to be paid for the work, then it is billable! How the Customer gets billed, Managed Service Agreement or Line Item on the invoice, should not be a concern of the Support Team. If it is warranty work, business development, or in some cases, travel, then yes, it is non-billable. The rest of the work is all billable and uses a billable Work Type.”
-Adam V. (former supervisor)
Gary Pica of TruMethods fame says a good Preventative Maintenance / QBR program will return 30% of MRR as project work.
Last year alone, Advanced Global helped 26 MSPs to Streamline their Invoicing Process. The guidance included a roadmap on how to get from there to here, a project plan that guarantees results, and knowing what to do when.
The results were pretty impressive, showing a 3-18% of MRR gained in T&M invoicing to Managed Service Clients. That is a huge increase to bottom-line profit without incurring any ongoing expense – just capturing lost profit. This is at least a 2X ROI and, in some cases, 10X.
Tell me: Where else are you guaranteed to double your money or get your money back?
I imagine your eyes are starting to glaze over right now, thinking about how this must be some long, complicated, unattainable process.
Gaining 3-18% MRR in a few easy steps sounds like a 3 am infomercial, right? But I’m serious: what we teach is no “buy one get one free” gimmick. Stay with me just a bit longer and decide for yourself.
So, what is the easy 6-step process? Since you asked…
Understanding what is in the signed MSAs
Mapping Out of Agreement type of work
Reduce the number of Roles and Work Types
Create Exclusion Sets for the different MSA levels of service
Create Contract Templates for both Single and Cascading Contracts
Copy the Contract Templates into the Client Accounts
All at once, deploying sweeping changes
As New Clients are onboard or as Contracts come up for renewal
Step 1: Understanding what is in the signed MSAs:
I remember the day an Account Manager tracked me down because he was honked off that we refused to schedule a PC install under the proactive, regularly scheduled Network Administration visits. It seemed the Customer did not want to pay extra for the installation and therefore asked for it to be done under the Recurring Network Administration Visits agreement.
My response to the Account Manager came from the President of the Company, who said, “No more Service Request work is to be done under the Network Administration agreements or during the pro-active visits; it’s to be billable time outside of the Managed Service Provider Agreement (MSA).”
A few minutes later, the same Account Manager returned with the signed MSA, which clearly stated that Network Administration time covered “the Net Admin checklist, and any other work the Client requested.” I took a photocopy of the section of the agreement and sent it to my supervisor, informing him of what I felt we had to do – schedule the installation under Net Admin time.
From my experience, this is not an isolated case. In fact, it’s become common for Service Delivery to not know what Sales is selling and what Sales says they are selling is not in the signed agreements nor in the PSA configurations.
Last year we were implementing our “Streamline the Invoicing” process to an MSP Client. We asked the Owner, Office Manager, and Ops Manager what Type of Work was covered by the MSA agreements for each Client. The Office Manager leaned forward in her chair and said, “Yes, what is in those Agreements? I would like to know!”
The steps we use are quite simple:
Pull a list of Managed Service Clients (Search all Contracts, export to Excel, sort by Account, remove duplicates)
Use the Excel Spreadsheet as the map, and add columns for Included Type of Work and Excluded Type of Work
Go through Client by Client, filling in the extra columns
Step 2: Mapping Out of Agreement type of work:
With the Managed Service Client list in hand:
Add another Column for Contract Template Type.
Group the Clients together based on the Excluded Type of Work.
Title each Group Template A thru as many letters in the alphabet as you need (note: it is not uncommon to have 6 or 7 Groups. In other words, Group A thru G or H).
Now, map out each Template using this format:
Contract Template Type ?:
Group Title:
(Ex: Bronze, Silver, Gold, Platinum)
(Ex: Monitoring Only, Essentials, Advanced, Ultra)
Primary Contract:
(Ex: Managed Service Agreement)
Primary Contract Product Line (Line of Business):
Secondary Contract(s):
(Ex: Block Hours, T&M, Retainer, Fixed Price)
Secondary Contract(s) Product Line (Line of Business):
Notes:
Exclusions:
Step 3: Reduce the number of Roles and Work Types:
Autotask: “The purpose of Roles is to adjust the Billing Rate depending on the skill set needed to do the work.” We recommend having only one Role assigned to each Employee. That way, they do not need to check or change the Role when entering time. It is hard enough to encourage the Techs to do Real-Time Time Entry. If we make the process burdensome, we will never get their buy-in or participation.
Autotask: The purpose of Work Types is to adjust the Role Rate based on the type of work being done or to exclude the Type of Work from the primary Contract. We recommend reducing the list of Work Types to only those needed to adjust the Standard Role Rate for non-Managed Service Clients (Afterhours, Project Work, Travel, On-Site, etc.) and for work excluded from or limited by the MSAs. (Afterhours, Project Work, Travel, On-Site, Remote Work, VOIP, etc.)
Step 4: Create Exclusion Sets for the different MSA levels of service
For certain Contract Template Types, a fair amount (more than 1) of Work Types are excluded from the Agreements – Think: Monitoring Only. For these Template Types, it is easier to create an Exclusion Set. Therefore, rather than adding a lot of individual Work Types to each Clients’ Contracts, you can just add the Exclusion Set in a single keystroke.
Step 5: Create Contract Templates for both Single and Cascading Contracts
We recommend creating a single Contract Template for each type of Contract that will be used. Ex: Recurring, T&M, Block Hour, Fixed Price, Retainer. Note: We only had one Client that used a Per Ticket Contract, and once we were done with the Streamlining Invoicing engagement, that Contract went away.
Once all the Single Contract Templates have been created:
Reference the Contract Template Mappings
Build Cascading Contract Templates
Start by using the Contract Copy Wizard to copy the primary Contract in the Cascade.
Follow this by copying all the Secondary Contracts and linking them to the preceding Contract (by setting the Exclusion Contract in both the Primary Contract and all except the last Secondary Contracts)
If no Work Type is covered by any of the Contracts in the Cascade, they will be excluded to the Standard Role Rate in Approve and Post
Step 6: Copy the Contract Templates into the Client’s Accounts
Now the process is very easy: Just use the Contract Copy Wizard to copy the templates into the Client accounts. Here you have three choices:
Not using the Cascading Contract Automated framework…and continuing to lose 5-15% in monthly T&M Billing
Copy the Templates into all Client Accounts on a specific date
Copy the Templates into Client Accounts as they are set to renew
Summary:
Whew! We made it. Thanks for hanging in there. I promised this would not be a Ronco 3000 “As seen on TV” MSP improvement gadget.
It is quick and easy, so you can begin making 2023 awesome right away. I know your next question: how long will it take?
It should only take about 9 hours to get through the process, maybe a little more if the only documented MSA is in the Owner’s head (which of course it isn’t because Owners complain about Techs not keeping their documentation up to date…).
All that being said, we know MSP Owners and Service Managers are pretty busy people and not always super knowledgeable about Autotask.
If you are leery of going it alone, Advanced Global is here to help. We are happy to guide you through the process in 6 weeks or less, and guarantee you will recoup 5-15% non-MSA billable hours as T&M invoicing, not to mention reducing your A&P processing time by 75%.
How can Advanced Global afford to guarantee the results? Because we have a top-notch streamlining evaluation, a roadmap on how to get from there to here, and a deployment plan that provides a great track record guiding 26 MSPs in 2022 thru the process, each one recouping 3-18% in more T&M Invoicing from their Managed Service Clients.
For more information on Advanced Global’s Streamlining Invoicing program, just email Info@AGMSPCoaching.com with the words “SI is for me” in the subject line.
The elephant in the room:
How do we know what we know? Because we are not philosophers! We are hands-on “How To” coaches that everyday guide MSPs on how to thrive by:
Fully leveraging the Autotask software
Providing the “Best in Class” Standard Operating Procedures
Leveraging Autotask Live Reports to hold everyone accountable
We are Thinkers and Doers with 49+ years of working for MSPs, bringing real Bottom-Line Improvements, change, profitability, and Best in Class performance.
Here are a few bullet points to let anyone interested know who we are and what we do:
We Are – the Autotask Global Service Delivery Authority
We Help – MSPs thrive
We Solve – Service Delivery issues, inefficiencies, and challenges by making sure that:
MSPs know what they don’t know:
Techs know what to work on next
Someone is managing all open tickets and driving them to completion
The Client has a great client experience
Real-Time Time Entry is a cultural habit
Projects are completed On-Time and On-Budget
Profit is maximized
Autotask is being fully leveraged
The staffing levels are correct, and the workload is balanced
The historical data that is in the Autotask software is accessible to benchmark, track & USE effectively
The Service Delivery operations can scale
The Company can grow
Our Tools:
Autotask “Best in Class” standard build
Our MSP robust Service Delivery SOP library
Advanced Live Reports
Expertise in providing a transformational experience
Note: We are not philosophers; we are doers with 49+ years of Service Delivery experience, bringing real Service Delivery Improvement change, profitability, and Best in Class performance.
We start by offering a FREE No-Obligation PSA Configuration Evaluation