Practice management: An integrated solution
Imagine this situation:
An employee works 4 hours off-site completing a document review task for a client project and needs to bill the customer for time and travel expenses.
The question is, what type of software is needed to support these activities?
- A. Time tracking
- B. Client management
- C. Project management
- D. Task management
- E. Document management
- F. Billing
- G. Expense tracking
You guessed it. The answer of course is actually “H. All of the above.”
Most practices these days have software applications for the tasks described above. But often the supporting functionality might be spread across four, five, or even six or seven different applications. Or, maybe your firm relies on office productivity tools like Outlook, Word, and Excel, which aren’t really optimized for the tracking work that needs to be completed.
It’s not an ideal approach.
Pretty soon, your business data is who-knows-where and the administrative effort to manage your work starts to rival the time you’re spending delivering revenue generating services.
Practice management software provides an integrated suite of tools to manage the complex interactions between all of the elements involved in running a service-oriented business. By streamlining the point-of-entry to your most critical software functionality, a practice management suite can be an invaluable tool for enhancing efficiency, client satisfaction, and, ultimately, profitability.
The sophistication, feature breadth, and ease-of-use of practice management solutions vary widely. In fact, practice management software is really something of an umbrella term. There are solutions adapted with additional features for all sorts of different businesses, from accounting and legal firms to medical offices and consultancies.
Nevertheless, the pillars of effective practice management software remain the same. A complete solution will provide the system of record for data related to your clients, tasks, projects, and time worked.
No matter the specific service your practice provides, your service business is all about relationships. And, these relationships rest on the foundation of your ability to understand and meet your client’s needs.
The client management features in practice management products provide a systematic means for capturing as much information as possible about your clients.
The quality and relevance of individual solutions depends largely on their ability to easily and flexibly capture and store multiple types of client data.
For instance, an adequate solution might allow for notes on email communication with clients or attaching emails to client records. A superior solution, on the other hand, would integrate with existing email software or even provide an email interface from within the practice management software to automatically store and associate emails.
Another differentiator between client management features can be found in the capability of the software to provide anytime, anywhere access to client data via a web interface or dedicated mobile app.
Ultimately, in order to be useful, client management software needs to provide easy answers to questions like:
- Who is the client manager?
- What is the contact information for this client?
- What projects does this client have underway?
- What is the order history for this client?
With a centralized approach to managing client information, your practice will be able to answer client questions more quickly, better target specific customer groups for promotions and outreach, and enable staff to get up to speed on client needs in less time when collaborative efforts are required to meet customer needs.
Task and project management
Task management features provide the raw capability to manage what work needs to be done, who should do it, when it needs to be completed, and who it is being performed for.
A scheduling interface is a critical component in any practice management solution. A collaborative calendar provides a centralized place for each staff member to easily view the allocation of human resources to client work. Color-coding, event icons, and filtering functionality within calendaring modules can be particularly useful to help clarify and organize schedule information. Most schedule interfaces allow users to toggle between both calendar and to-do list type views.
For individual tasks, work or job order documents can be used to define task information. On repetitive task work, work order templates standardize the information that needs to be collected and recorded during the completion of individual tasks. Task templates enable the inclusion of reference information and can link to resources which many need to be consulted to complete a particular task. Establishing workflow definitions via flow-charts or other methods of sequencing step work increases the chances that best practices are observed when completing the task at hand.
Of course, not all tasks are created equal. Applying priority ratings to tasks can help ensure that your firm focuses first on completing the tasks most directly influencing profitability. Similarly, alerts and notifications are useful features to ensure that important deadlines don’t slide past unobserved.
But while tasks might form the basic unit of the work performed by most practices, it’s far more likely that client work will be billed on a periodic or project basis. For professional services companies who conduct project work, project management features provide an additional level of coordination. A project management application provides a centralized area to set project scopes, assign team members, track costing information for actual to estimate comparisons, and sort out dependencies between project tasks.
For more information on project management functionality, consult our overview of project management software functionality.
If you’re not able to effectively track time, it makes conducting intelligent, data-driven client-service business management nearly impossible.
The problem is, time-tracking is one of those tedious activities that seems to inspire foot-dragging from even dedicated employees. Taking advantage of the benefits of software technology can help get those dragging feet up and marching toward more timely and complete tracking of hours worked.
Very often, time-tracking software is sold as a single application. There are benefits to using time-tracking as part of an integrated practice management solution, though. At a basic level, making a task easier always helps make sure it gets done—and gets done quickly. Since practice management solutions usually function as the primary software environment that employees work within, locating the time tracking functionality within that environment is a good way to keep it accessible. Additionally, being able to import the client, staff, task, and project information held within the practice management removes the need to recreate this information in a separate application.
Also, simple as the task of time-tracking may seem, there are real differences between the capabilities offered in various products. A capable time tracking software program needs to be able to provide both live time-tracking tools and after-the-fact entry of time information. For after-the-fact reporting, batch entry screens require far fewer clicks to input time worked on multiple tasks or for more multiple employees. If you have employees who do tend to put off time entry, alerts and reminders offer a digital substitute to sending uncomfortable nag emails requesting timesheets.
If your firm has employees who frequently work offsite, you’ll want to keep an eye out as well for practice management solutions that provide a solid mobile web or mobile app interface for time input.
The professional services world isn’t short on documents: forms, briefs, proposals, reports, designs, presentations—you name it.
Integrating document management within a practice management solution provides the opportunity to easily associate files with clients, projects, tasks, and even staff members.
There are a number of different factors to consider when considering document management capabilities:
- Identification. The ability to title, date, and tag documents assists in document retrieval.
- Integration. Document management APIs provide a mechanism to capture documents automatically from other systems such as accounting and email software.
- Storage. For web-based or remote document management solutions, the amount of space provided and the cost to acquire that space can vary.
- Back-up. In order to ensure documents are safely stored, it’s important to look for solutions that allow for automated back-up, preferably in a separate physical location from the primary data location.
- Versioning. Versioning features allow for non-destructive updates to documents and maintain a historical records of all the changes that are made.
- Collaboration. Managing user permissions and providing group access to documents can help facilitate collaborative work both for and with clients.
To learn more about document management capabilities, check out our dedicated guide on the topic.
Not every practice management solution will include billing capabilities. Very often, practice management solutions will leave billing tasks to your accounting system.
If you elect to handle billing from your accounting software, it’s important to verify that the APIs for your practice management software and accounting software are able to adequately pass data between the two software systems. Manually re-entering billing information from task or project management tools is not only an inefficient use of staff time, it’s an unnecessary opportunity for data errors. Manual re-entry of billing data that’s been digitized elsewhere previously is more inconspicuous than lighting money on fire—but that’s about the best that can be said of the practice.
Pursuing a practice management package with billing capabilities included is a viable alternative approach. Because billing practices can vary substantially between companies, it’s important to qualify that the software you select matches your specific needs.
Professional services oriented businesses, like accounting, legal, and consultancy firms, often bill as a function of time. Since time tracking and task management features allow the capture of much of the same information that will need to be presented in client-facing invoices, your practice management should allow for the easy conversion of this data into billing documents.
There are a number of advanced billing features which can be found in many of the more robust practice management software suites, including:
- Multi-payer management for split-billing situations.
- Progress billing for phased project work.
- Expense reimbursement support.
- Discount and promotions management.
Finally, don’t forget to take a close look at the accounts receivable features in your potential software package. AR is one of those tasks that’s about as interesting as watching paint dry, but if you can’t quickly configure an aging report or create a dunning letter for a client with an outstanding balance, you’ll end up missing those features sooner than later.
Evaluating which tasks a practice management solution supports is an important part of the review. But it’s also critical to consider global, system functionalities to fully understand differences between purchase options.
- User permissions. Your user group will likely include individuals who need to manage different tasks within the software. You may even want to restrict certain users from performing particular tasks. Perhaps only manager level employees should be able to trigger billing documents, for instance. Make sure to closely examine the granularity with which user permissions can be set, as it will vary between products.
- Custom fields. Developers of practice management solutions attempt to anticipate all of the fields that you may require when creating documents like work orders, project scopes, timesheets, and so forth. But every business is different. You may need to include additional fields to capture important business data and a capable solution should provide the ability to add custom fields as required.
- Deployment. Are you looking to host your practice management software in-house on your own server or would you like to have your provide host it for you? There are pros and cons to both approaches. (Check out our “Understanding the Cloud” article for a more in depth discussion.)
- Licensing. There are two primary approaches to software licensing. The traditional approaches is to license software upfront and purchase annual updates. This licensing model generally maps to on-premise software deployments. However, you may also want to consider a software-as-a-service (SaaS) approach, where you don’t purchase the software, but essentially “subscribe” to the use of the software. The SaaS licensing model is the predominant option for web-based solutions, hosted by the provider.
- Security. It’s important to know that sensitive business data will be adequately protected. Access control, encryption, and audit trail features can help secure your business data. A complete evaluation of products should include a careful consideration of these features and the differences between potential products.
- Mobile capabilities. Are your employees frequently performing work off-site? The ability to support system access from mobile devices and tablets can help make your staff more productive. Mobile web and mobile applications are becoming more common in practice management solutions. Many providers tout the mobile capabilities of their software in marketing literature. But complete feature parity between mobile and desktop software clients is still rare. Make sure to qualify mobile capabilities to ensure that the features you need when you are out-of-the-office are provided.
- Exports and integration. While a core benefit of practice management systems is the ability to consolidate multiple applications within a single software suite, it’s still likely you’ll need to augment your practice management software with other business software to completely meet your needs. For instance, one common integration requirement is the need to pass data to your back-end accounting system. Validating that each solution has an API that enables the transfer of data between systems is a critical step in making a cost-effective purchase. Additionally, since your practice management software will allow you to report on many aspects of firm management, make sure to check out the export formats (PDF, Excel, Text, etc) to make sure they meet your expectations.
- Design UX. It probably goes without saying, but there is a world of difference between the user interfaces between different solutions. An attractive, intuitive, and easy-to-understand interface can be a make or break factor when it comes to user adoption of your new practice management software.
Need help locating an adequate practice management solution? We offer a free, unbiased 3rd party software matching service. Whatever spending range you’d like us to search within, we can help identify the top options best-suited to meet your needs.