In this article, we'll look at how professional services organisations can identify and prevent revenue leakage and stop leaving money on the table.
Step 1: Make sure you have the right tools to keep up with modern processes
Using the latest tools and functionalities is a must for businesses that want to stay competitive. That includes everything from daily operations to billing.
Professional services and workflow automation through ERP solutions can make various tasks far more efficient when used correctly. ERP solutions streamline processes under one cloud-based system, potentially eliminating deficiencies and providing newer, more effective workflows.
ERP solutions help with budget planning, cost estimation, billing and more. Their features can help companies reduce revenue leakage, or even eliminate it altogether.
Step 2: Be careful not to have too many manual processes
The most significant contributors to revenue leakage are unbilled or underbilled work. Put simply, that's when companies do work that isn't fully compensated, such as FTE-heavy administration tasks and manual data checking and processing.
There are lots of ways this can happen.
- Invoices can go missing as a result of human error.
- People can forget to fill out paperwork or complete their timesheets.
- Others may fill out forms incorrectly, resulting in work or time not being captured.
- Some tasks aren't billable to a single customer, such as manual data checks and AR and AP processing.
Imagine the gains you could make in both efficiency and accuracy if you could automate your billing processes! The good news is, you can — with a modern ERP solution, you can eliminate human error and streamline your documentation processes, freeing up your teams to work on more skilled, strategic tasks.
Step 3: Be sure to enforce your pricing policies
Of course, there's a time and place for offering customers a discount—it can add a lot of incentive during negotiations—but it shouldn't be your first go-to step.
Your company should only be offering discounts when it needs to. Don't let employees get into the habit of providing deals when they aren't warranted. And if you do have team members who are doing this, now is the perfect time to work with them on their sales techniques and help them grow in alternative ways of incentivising potential customers. The quality of your services should be your strongest incentive, not how low you can drop your prices.
Step 4: Monitor changes in customer lifecycles
Whether it's customers buying new products or services, upgrading or downgrading their subscription, or making other changes affecting your business relationship with them, tracking how those changes should affect your revenue is essential.
Whenever a transaction is made, there's potential for billing errors — and with time and inattention, those errors can add up fast.
Modern ERP solutions allow you to see the forest without getting bogged down looking at trees. Getting a broad view of relevant data whenever you want it makes it much easier to monitor changes in customer lifecycles and compare them against revenue predictions, helping you see processes or pain points that might be affecting your bottom line and letting you get ahead of the problems before they become too large.
Step 5: Don't waste bandwidth on unnecessary administrative tasks
Some tasks are unavoidable, but your team could unintentionally be allotting more time than your customers' business compensates for when you factor in operational costs. In the digital age, taking advantage of automation is essential. Taking a balanced approach in terms of time-taken versus profit-per-sale protects your net earnings.
When done manually, things like scheduling, bookkeeping, and planning can come with hidden revenue leaks that you might never notice. Automating operational processes gives you the chance to reduce any revenue leakage while potentially saving a lot of valuable time in the process.
Takeaway: Modern businesses need modern ERPs
For professional services organisations, identifying revenue leaks should be a priority. And one of the best ways to do that is by adopting modern ERP solutions that reduce the risk of errors, streamline processes, and make data analysis much more accessible.
Professional services companies that utilise ERP solutions are better equipped to identify and fix revenue leaks by replacing outdated processes with the power of modern workflow automation.
To learn more about how ERP solutions can benefit your business, get in touch with one of our experts. We can set you up with the right ERP system for your business and guide you through the process of switching over step-by-step.
Agilyx Group has been helping businesses modernise and improve their operational processes for over 20 years. We can help you identify and prevent revenue leaks, create more efficient operations, and establish a cohesive cloud-based system that streamlines your files and data.
Our all-in-one ERP solutions are flexible to meet the unique needs of each business we work with. So set up a free consultation, and let us help make your business even better.
