Agency billing software: what it should do

Agency billing software turns the work an agency does into invoices: project fees, monthly retainers, billable hours, expenses and approved extra work. The good kind drafts the month's invoices from what is already on the client's record, so billing is a list you check and send rather than a day of building invoices from spreadsheets.

Plain invoicing software can send an invoice. Agency billing software has to know where the number came from.

The three ways agencies bill

Most agencies bill in two or three of these ways at once, often for the same client.

By project. A fixed fee from an accepted quote, often split: a deposit on acceptance, the rest on milestones or dates.

By retainer. A monthly or quarterly fee for an agreed amount of work, with a rule for unused hours and a rate for hours over. The retainer management guide covers how to set one up.

By the hour. Time logged against the client's work, priced at a rate per person or per project.

On top of all three come expenses you pass on, such as freelancers, stock or ad spend, and extra work the client approved after the original scope.

What agency billing software should do

1. Turn an accepted quote into invoices. The deposit invoice on acceptance, the rest on each milestone, with no retyping.
2. Bill retainers on schedule. The fee drafts itself each period. Hours over the allowance are added after the period closes.
3. Bill logged hours. Billable time becomes invoice lines, per task, per person or per project.
4. Pass on expenses. Billable costs wait on the client until the next invoice.
5. Bill approved changes. Extra work agreed after the quote is billed once, on the next invoice, with the approval on record.
6. Gather the month in one place. One view per billing day of every fee, overage, change and unbilled hour, by client.
7. Leave you the last word. Invoices are drafts until someone checks and sends them.
8. Show who owes you. Open and overdue invoices by client, split by how late they are.
9. Handle currencies and tax. Each client billed in their currency, with your tax rates on the lines.
10. Export to your accountant. In a format their software imports.

Points 2, 5 and 6 are where general invoicing tools fall short for agencies.

A monthly billing routine

Whatever tool you use, the routine is the same.

1. On the billing day, open the list. Every client's retainer fee, last period's overage, approved changes and unbilled hours.
2. Check the outliers. A client far over their hours, an expense with no description, hours with no rate.
3. Send the drafts. Same day each month, so clients learn when to expect them.
4. Record payments as they arrive. Against the right invoices, so the balance is true.
5. Chase on a schedule. The day after the due date, then a week later. The overdue invoices guide has the wording.

A routine like this takes an hour a month for a small agency, if the software does the gathering.

How Spodus does it

Spodus is agency billing software built into a CRM. An accepted quote can draft the deposit invoice and create a milestone for each later payment; marking a milestone done drafts its invoice. Retainers are contracts with a fee per period, included hours or deliverables, a rollover rule and an overage rate. Pick a billing day and Spodus drafts one invoice per client on that day, gathering the period's fee, last period's overage, accepted change quotes and billable hours and expenses no contract covers. The drafts wait for you to check and send.

Who owes you, days to pay and recurring revenue are ready-made reports. Each quote, invoice and payment has its own currency. There is no bank feed and no double-entry ledger, and clients cannot pay an invoice online: you record payments as they arrive. Clients see their invoices in the client portal.

See Spodus for agencies, or compare agency management software.