QuickBooks Fails Professional Services Organizations
Professional services organizations are diverse. They provide a vast array of services, have widely varying customer bases and different models of service delivery. What professional services organizations have in common is how they generate revenue – they sell services, generally in the form of consultants’ time. These organizations are also unified by a need for accurate project billing, detailed reporting and business-process automation to maximize their operations.
What professional services organizations don’t need is QuickBooks. Instead, these organizations need a QuickBooks alternative that can help them boost revenue, improve customer satisfaction and make strategic data-driven decisions. Don’t take my word for it, but instead learn the benefits that some former QuickBooks users now enjoy that improve project billing, reporting, and automation and application integration.
QuickBooks Falls Short for Project Billing
Founded in 1998, Halloran Consulting Group is a top life science regulatory, quality and clinical consulting firm providing deep and broad domain expertise tailored to each client relationship. It won a place on Inc.’s list of America’s fastest-growing companies for five consecutive years. The firm is a trusted partner and subject-matter expert, proven by its track record across a long-standing and diverse client base.
Halloran depended on financial data in QuickBooks, sales data in Salesforce and project data in NetSuite OpenAir professional services automation. With that fragmentation, Halloran didn’t have a unified view across its project-based business. That meant limited insights, and a great deal of manual work for the small finance team to close the books in 20-tab Excel spreadsheets and generate basic reports.
“We could either see budget verses actual project data in OpenAir or company-wide financial margin information in QuickBooks, but we couldn’t look at everything together,” says Halloran CFO Tania Zieja. “It was very piecemeal. It was also very hard to lock down a report and trust the integrity of the data.”
To aggravate matters, integration between QuickBooks and OpenAir failed regularly, and Halloran had similar difficulties connecting Salesforce and OpenAir. Dealing with a massive QuickBooks data file prone to failure and data corruption, Zieja knew it was time to upgrade systems. Leaving Salesforce in place, Halloran replaced QuickBooks with Sage Intacct. The company also got rid of OpenAir, and installed Nexonia for time and expense management.
Halloran achieved remarkable gains in key metrics since graduating from QuickBooks. The firm increased profit by $4 million after adopting a blended-rate consultant billing model, thanks to insights and customizations that weren’t possible with the existing finance stack.
“If we didn’t have Sage Intacct, there’s no way we would have been comfortable making such a big change to our billing structure,” Zieja says. Meanwhile, project margins rose 12% and billable utilization leapt by 36%. Days sales outstanding plunged by 43%, opening $1 million in new monthly cash flow. Write-offs dropped from 3% of revenue to virtually zero.
Over the past decade, ModSquad bucked the trend of traditional customer support by building a network of more than 10,000 freelance “Mods” around the world who work with brands that include the National Football League, NBC, Sony Online Entertainment, Warner Bros., Zendesk and the U.S. State Department. These digital engagement experts moderate content, chat with customers, and manage communities and social media buzz 24/7/365, in more than 50 languages and dialects. ModSquad’s finance team experienced growing pains from trying to keep up with the company’s rapid expansion using QuickBooks and Excel-based financial processes for project billing.
With hundreds of active long- and short-term client engagements across a range of SKUs and various billing models, ModSquad’s monthly time-based invoicing was highly complex and involved building lengthy individual invoices in Excel, and then circulating these via email for review. As part of the transition to Sage Intacct, ModSquad streamlined financial workflows, consolidated SKUs and replaced those long invoices with clear single-page statements. As a result, the company significantly improved the client experience, shortened days sales outstanding and freed up account managers to spend more time on client support.
“Before deploying Sage Intacct, we envisioned CRM, time tracking and finance systems that worked seamlessly together to automate our entire book-to-bill cycle,” says David Wohlwend, Vice President of Finance and Accounting. “Now, that vision is a reality.” Once a lead is marked as closed/won in Salesforce, it flows right into Sage Intacct, which creates project and contract IDs with the appropriate service SKUs. The team uploads data from their labor application directly to Sage Intacct, where they can do all invoicing and project costing without time-intensive, manual spreadsheets.
“We know that what we sell is what we deliver, bill and measure against internally, ultimately creating happier employees and customers,” Wohlwend says. “This scalable infrastructure delivered an instant ROI of 2.5X, while improving the transparency of our data and letting our finance team focus on higher-order work.”
By moving off QuickBooks, ModSquad minimized lengthy billing meetings and streamlined revenue reporting and invoicing. With new multiple entity and multi-currency capabilities, the team cut its monthly close and global consolidations process by more than half. “With Sage Intacct, our billing cycle only takes a few days before we can start the reconciliation process and deferred revenue adjustments,” Wohlwend says. This is a great improvement over the time it used to take to get all of our invoices approved by account managers and out to clients.”
Founded in 2015, Network Partners provides professional and consulting services to the medical device, pharmaceutical and biopharmaceutical industries, with client project management at the core of its business. In its early days, the company’s finance team used QuickBooks for its financial accounting and reporting and a separate tool for time tracking. As the business grew rapidly, QuickBooks no longer met its needs, and the team struggled with inefficiency and duplicate data entry. Tracking employee time and applying it to various client projects made invoicing difficult. Network Partners recognized the need for a more sophisticated financial system that could support project management, time tracking and reporting while offering enough flexibility to grow and evolve with the company.
After implementing Sage Intacct, Network Partners streamlined consultant time tracking, which ensures faster, more accurate invoicing and billing by eliminating data integrity issues and saving days of work in calculating weekly project balances. “We love having everything in one system,” says Kylie Kehres, director of finance. “Employees now enter their timecards, attach these to a project and get these approved, all in Sage Intacct, and our invoicing time is drastically reduced. Start to finish, it takes our analyst less than two hours as compared to a full day every week.”
With their previous processes, billable hours could get lost in the shuffle. Now the finance team ensures the organization receives maximum benefit for any client work it completes. They’ve done this while doubling the number of invoices they send out and improving client satisfaction.
“One of our clients recently told us that it’s easy for them to make quick payments because we have the most accurate, detailed invoicing of all the suppliers they use. That’s the kind of service provider we strive to be in the industry,” Kehres says.
Streamlined workflows like these helped the finance team pave the way for the business’ 175% increase in revenue and expansion to six entities in just 18 months. “Every single role in finance has been positively impacted by Sage Intacct and we’re around 70% more efficient across the board,” Kehres says. “The automation we have in the system has transformed our team from a focus on executing daily, rear-view tasks to performing value-added, forward-facing financial analysis like beefing up our budgeting and planning process as the company scales.”
QuickBooks Falls Short for Automation and Application Integration
Yardstick is a fast-growth company that’s become an award-winning powerhouse in the licensure, certification, online training and psychometric space. As Canada’s leader in online testing and training, the business operates multiple entities across North America, and recently acquired a large publishing house. To keep pace with the company’s rapid expansion, Yardstick’s finance team recently decided to upgrade from QuickBooks to a multiple entity, multicurrency, cloud-based ERP system.
“It had become painfully clear that we’d outgrown QuickBooks,” says Salma Kaida, Yardstick’s accounting manager. “We wanted a system that would grow with us, through powerful automation, a multi-entity architecture and web services APIs. After narrowing our choices down to FinancialForce and Sage Intacct, we were confident that Sage Intacct would best meet our needs, especially seamless integration with Salesforce and our proprietary e-commerce system.”
After upgrading from QuickBooks to Sage Intacct, Yardstick saw immediate improvements across its financial processes. By connecting its e-commerce software to its new cloud-native financial management platform, the team streamlined its revenue-related data entry. Data is automatically pushed into Sage Intacct each time a sale is made, including the customer, the amount of tax collected and the specific revenue amount. A prebuilt integration with Salesforce gives Yardstick sales reps direct visibility into which customer invoices are open, minimizing the amount of time the finance team spends chasing down account receivable information. In addition, the platform flawlessly handles Canada’s value-added tax, including proper treatment of reimbursements.
These efficiency improvements reap huge dividends when it comes to headcount savings. “If we hadn’t adopted Sage Intacct’s cloud-based ERP software, we would’ve needed to grow our team by at least a couple full-time employees, at annual cost of around $100,000 each year,” Kaida says. “Since making the switch, we have created more capacity for value-added work and our small team even managed to absorb a huge acquisition without hiring any more accountants.”
With Sage Intacct and Salesforce integration, Halloran’s Zieja says her team generates reports showing budget verses actuals, project profit, billable utilization, billing status and more. Sage Intacct also captures daily time entries made by consultants into Nexonia for timely insights and streamlined billing. Rather than spending 90% of her time in spreadsheets, Zieja relies on Sage Intacct dashboards to monitor and analyze the business. The time savings has empowered finance team members to invest their skills to help drive growth as a more strategic partner to the business.
“The visibility we have through Sage Intacct is great,” Zieja says. “It’s helped us improve profitability and make faster, better decisions because at literally the click of a button, we can see what’s going on in the business. We can compare it against past performance and look at our pipeline forecast.” The finance team has time to focus on higher value work, rather than manual crunching scenarios or editing endless spreadsheets.
“Before, we were stuck in the day-to-day weeds of closing the month. We’d get two days to breathe after the close but couldn’t analyze the data or get new projects done — there was no time,” Zieja said. “Now I can look at my dashboards and reports and know that the data is solid and literally up to the minute.” Energized in its newly orchestrated environment, Halloran has its sights set on doubling its business in the next several years. Zieja and other Halloran executives are confident that the firm has the right processes and technologies in place to achieve that goal.
“We really hit it out of the park last year because we were able to see real-time data,” Zieja says, whose achievements were recognized with a Ventana Research Digital Leadership Award. “Any time we saw things going south, we were able to react really quickly rather than waiting until the quarter was done.” Another catalyst in Halloran’s transformation has been the elimination of hours of manual work in its old environment. Time needed for the monthly close has dropped from 20 days to 10, while accounts payable processes that took several days are now complete in hours, due in part to the Sage Intacct-Nexonia integration. Invoicing time has been cut from a week to as little as two days, even as the number of monthly invoices has doubled to 120. And despite Halloran’s rapid growth, its finance team size has increased only nominally, from 3.5 full-timers to just four.
QuickBooks Falls Short for Reporting
The most notable benefit ModSquad experienced after switching from QuickBooks to Sage Intacct came from gaining visibility into its financials across a variety of operational dimensions. This allows ModSquad to slice and dice revenues, expenses and labor across individual projects, clients, locations or service lines for deeper reporting and analysis. These insights extend far beyond the finance team, helping ModSquad’s services vice president, account managers and entire C-suite better collaborate to growing the company’s margins.
“Sage Intacct provides the ability to drill down and filter our dashboards, which affords us the freedom to provide on-target estimates for complex work where clients scale our services up and down,” Wohlwend says. “We’re now watching exactly what our project managers are doing across 10 major activities on a project at a very fine-grained level, and can monitor KPIs as numbers roll in, know instantly what’s going on and see what needs more work.
“Before, our data was too opaque for nuanced variance explanations or fine-grained profitability targets. Sage Intacct lets us effortlessly view actionable information by time period, account manager, client or project, so teams can course correct when needed. And finance is right in the mix, helping to drive smart process change across the company, which contributed to a margin improvement of nearly two percentage points in just one month.”
Network Partners’ business stakeholders now have the visibility they need to better manage their projects. “We’ve taught our business leaders how to fish and put the data in their hands for the first time; that’s a huge shift for the business,” Kehres says. “With weekly project reports in Sage Intacct, they have the information, tools and autonomy to make timely decisions without waiting for information from the finance team.”
By monitoring key performance indicators like bill rates, productivity, client support hours and project profitability, leaders can keep a pulse on the business and optimize every aspect of service operations. For example, they can slice and dice billing rates or team productivity by employee, project or department in real time. “If productivity is down in one area, we know immediately and can move resources around to better manage our business,” Kehres says. “Our reaction time is much shorter now, which in turn creates more productivity and profit for the company.”
This comprehensive, multidimensional reporting enables financial analysis and insights that help the Network Partners finance team see the bigger picture and confidently make the case for strategic business shifts. “When we decided to start a new quality division last year, we quickly saw that it was pulling in the highest billing rates across the business and really driving profitability,” Kehres says. “As a young company, investment decisions are always at the forefront of our minds as we look at our organic growth rates and consider how we can accelerate that. Sage Intacct helped us feel comfortable moving forward with our recent acquisition of The FlexPro Group. Once we made the decision, it was a seamless process because we were prepared and ready as a business to take that next step.”
Yardstick now has powerful reporting capabilities that allow it to track operational and financial metrics by key business drivers. Users can tag individual transactions with specific customers, projects, lines of business, departments, employees or locations, and then filter, group and organize financial data accordingly. The finance team also pulls operational data, such as headcount, hours worked and number of projects for even deeper analysis across these dimensions.
For instance, out-of-the-box project accounting reports give Yardstick’s consulting organization visibility into detailed tasks. Project managers can easily track their team’s logged time against estimated time and closely monitor billable hours on a weekly basis. This means that towards the end of the month, they can see which specific tasks are under budget and focus on work that will generate the necessary revenue to meet monthly targets.
“Since adopting Sage Intacct, we’ve had a major shift in terms of how we think of ourselves as a finance department,” Kaida says. “Historically we were like a vault – a trustworthy, reliable keeper of the record, but our role has evolved to being stewards of accurate data that informs the right business decisions. We’re putting more timely information into the hands of managers and supporting activities that actually generate revenue.”
In these and other areas QuickBooks falls short. These former QuickBooks users made the switch and reaped real benefits. Want more revenue, happier clients and better insights? Make the switch.
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