Before you commence set up with Practice Ignition, you will need to understand the different ways you can bill your clients. 

There are the six billing types (four of which have optional additional functions) available in Practice Ignition, which can be split up into two categories:

Billing types for one-time services, annual services, or project work.

Billing Types for ongoing services.

Both monthly and weekly recurring also have the option to collect catch up payments using pro-rata, which is outlined in detail below. 

Let's break down each of these billing types:

Billing types for project work (one-time services)

If you provide one-time services for your clients, you have multiple options to your disposal in Practice Ignition 

On Acceptance

When should I use this billing type?
There are two scenarios where you could use this billing type:

  • If you'd like to collect payment for a one-time service before the work commences, use On Acceptance. 
  • If you'd like to collect an initial retainer or a deposit for multiple services in a single proposal, you may want to set up a retainer/deposit service using the On Acceptance billing type. 

When will an invoice be generated?

If Xero or QuickBooks Online is integrated, Practice Ignition will create an invoice as soon as the client accepts the proposal. Note: Even if the start date is in the future, an On Acceptance service within a proposal will create an invoice as soon as the proposal is accepted, regardless of the start date being in the future.

When will payment be collected?
If payments is enabled in your PI account, the once-off payment collection schedule will be applied (you can change your settings by clicking here). In the screenshot below, this account is set up to collect payments 3 days after the invoice is generated.  

If you haven't integrated your Practice Ignition account with an accounting package, you can still use PI to collect on-acceptance payments.

For full details on using On Acceptance billing, click
here.

On Completion

(with the option to take a deposit)

When should I use this billing type?

There are two scenarios where you could use this billing type:

  • If you'd like to collect a fixed fee for a one-time service once the project is complete.
  • If you are providing a one-time service or project where you'd like to collect a % of the payment upfront, and the remaining balance once the project is complete.

When will an invoice be generated?

  • For the deposit portion of an on-completion service, an invoice will be generated automatically on acceptance of the proposal
  • For the remaining balance (or total balance if no deposit applied), you decide when the invoice is generated, which is done at the click of a button. You can see the full instructions for invoicing on completion services here

There are two important notes regarding on-completion billing:

  1. As is the nature of project work, sometimes the scope of projects change, or you uncover additional information which does change the final price. The good news is you can edit the final price before generating the invoice. You can even add more details to the invoice if the price did change.
  2. Apart from the deposit, you cannot invoice an on completion billing type multiple times. If you need multiple on-completion invoices for a single project, you'll need to include multiple services in your proposal.

When will payment be collected?
Just like on-acceptance, If Payments is enabled in your PI account, the once-off payment collection schedule will be applied. In this case, the payment collection will begin immediately when you generate the invoice.

If you haven't integrated your Practice Ignition account with an accounting package, you can still use PI to collect on-completion payments.

Estimate

(With the option to quote an hourly rate or a Price Range)

When should I use this billing type?

Estimates work the same as the On Completion invoice (but they do not include a deposit option). The difference is the price is displayed as an hourly rate or a price range, and the price will not be included in the total value of the proposal. As such, you would use the Estimate billing type when the scope of the project cannot be clearly defined upfront.

When will an invoice be generated?

 You decide when the invoice is generated, which is pushed to Xero or QBO at the click of a button (exactly the same way On-Completion is billed).

  • For price ranges: Simply adjust the final price you'd like to bill in the price field.
  • For hourly rates: When you generate the invoice, you can change the quantity of hours to generate the total

When will payment be collected?
Just like on-acceptance and on-completion, If Payments is enabled in your PI account, the once-off payment collection schedule will be applied. In this case, the payment collection will begin immediately when you generate the invoice. 

If you haven't integrated your Practice Ignition account with an accounting package, you can still use PI to collect on-completion payments.

For full details on using estimates, click here.

Billing Types for ongoing services.

If you provide services for your clients on an ongoing basis, you have a few options available to you to automatically generate invoices and collect payment.

Monthly Recurring

When should I use this billing type?

There are many scenarios where monthly recurring billing is appropriate:

  • If you offer services on a repeatable basis, we recommend using monthly recurring, even if the repeated service is delivered on a different frequency. I.e. You deliver a service on a quarterly basis, monthly recurring provides a more consistent revenue stream for you, and simplifies cashflow for your client. 
  • If you offer one-time services but would like to split the fee collection across a number of months (i.e. provide your client with a payment plan). 
  • If you sell software subscriptions or other services that have fixed monthly costs.

When will an invoice be generated?

If you use Xero or QuickBooks Online, an invoice is generated automatically, once a month. When you create your proposal, you can choose the day of the month the invoice will be created. Each client can have a different monthly billing schedule. 

When will payment be collected?
Monthly recurring payments pick up the Recurring Payment schedule. In this case, payment will begin collecting immediately after the invoice is generated, once a month.

 If you haven't integrated your Practice Ignition account with an accounting package, you can still use the Monthly Recurring Billing feature to collect monthly payment:

Weekly Recurring

Practice Ignition now has Weekly Billing in beta testing! If you would like to beta test our Weekly billing feature, feel free to send us an email via [email protected].

When should I use this billing type?

Weekly Billing works exactly the same as monthly recurring. Weekly recurring will allow you to create proposals that generate weekly invoices as well as weekly payments. You might choose to use weekly recurring billing in cases:

  • where you are delivering services on a weekly basis
  • where you want to have more consistent cash flow coming into your business

When will an invoice be generated?
The major difference is that all weekly invoices (and therefore, payment collections) will happen on the same day every week. The good news is you can choose which day of the week you want invoices to be generated, but not at the specific proposal level (you can edit your weekly billing settings under general settings):

When will payment be collected? 

Weekly recurring payments pick up the Recurring Payment schedule. In this case, payment will begin collecting immediately after the invoice is generated, once a week on the global weekly recurring invoice day.

If you haven't integrated your Practice Ignition account with an accounting package, you can still use the Weekly Billing feature to collect weekly payment.

For full details on using weekly billing, click
here.

Pro-rata 

(on Monthly and weekly recurring services)

Both monthly and weekly recurring billing types give you the option to enable pro-rata. In Practice Ignition, pro-rata allows you to invoice and collect payments on missed billing periods in a proposal. Before we dive into pro-rata, it's important to understand the definition of a "billing period" in the context of Practice Ignition.

What is a billing period?
Specifically related to recurring billing, a billing period refers to a single month (or week, if using weekly billing) in a proposal. Billing periods are defined by the recurring invoice day. 

To come up with a proposal total value, Practice Ignition counts the number of recurring invoice days that fall inside the contracted start and end date. 

Let's break down an example. 

I have started a new proposal where I've opted to have recurring invoices on the 1st of each month.

I've set the contracted start date as the 1st of January, and the end date as the 31st of December:

Practice Ignition counts the number of billing periods that fall between the contracted start and end date. In this case I have 12 billing periods, where billing will occur on the 1st of each billing period:
 

  • 1 Jan - 31 Jan
  • 1 Feb - 28 Feb
  • 1 Mar - 31 Mar
  • 1 Apr - 30 Apr
  • 1 May - 31 May
  • 1 Jun - 30 Jun
  • 1 Jul - 31 Jul
  • 1 Aug - 31 - Aug
  • 1 Sep - 30 Sep
  • 1 Oct - 31 Oct
  • 1 nov - 30 Nov
  • 1 Dec - 31 Dec

If I change the Recurring invoice day to the 15th, it changes the billing periods, but there are still 12 recurring invoice days falling inside the contracted start and end date. Therefore, there are still 12 billing periods in this proposal:

  • 15 Jan - 14 Feb
  • 15 Feb - 14 March
  • 15 Mar - 14 Apr
  • 15 Apr - 14 May
  • 15 May - 14 Jun
  • 15 Jun - 14 Jul
  • 15 Jul - 14 Aug
  • 15 Aug - 14 Sep
  • 15 Sep - 14 Oct
  • 15 Oct - 14 Nov
  • 15 nov - 14 Dec
  • 15 Dec - 31 Dec (note: even though this billing period is only two weeks, it still counts in the proposal, because the invoice day falls inside of the contracted start and end date).

Now let's change the example slightly to a common mistake new PI users make.  I've set the recurring invoice day to the 1st but I've changed the start date to the 15th. 

In this case, I've only got 11 billing periods:

  • 15 Jan - 31 Jan - (note: This billing period does not get counted in this proposal because the recurring invoice day is the 1st. given that the proposal starts on the 15th, we can't count this as a billing period).
  • 1 Feb - 28 Feb - This billing period now becomes the first recurring billing period of the proposal. 
  • 1 Mar - 31 Mar
  • 1 Apr - 30 Apr
  • 1 May - 31 May
  • 1 Jun - 30 Jun
  • 1 Jul - 31 Jul
  • 1 Aug - 31 - Aug
  • 1 Sep - 30 Sep
  • 1 Oct - 31 Oct
  • 1 nov - 30 Nov
  • 1 Dec - 31 Dec

If I do actually want 12 billing periods in this proposal, I can either:

  1. Change the start date to the 1st of January, 2018,
  2. or change the end date to the 14th of January, 2019.

With these examples in mind, let's now explore how pro-rata works. 

When should I use Pro-rata?

There are two scenarios where pro-rata billing becomes helpful:

  • If you have catch up work and want to collect payment for that work upfront.
  • To future-proof your proposals. If you are worried that your client will delay in signing the proposal until after the contracted start date, pro-rata will ensure you don't miss any billing periods.

It's important to note, pro-rata does not calculate a daily rate, rather, it calculates the number of missed billing periods based on the start date of the proposal. 

Collecting payment for catchup work immediately

using the example from above, let's imagine that it's the middle of April and your have a new prospect that has catch up work from January and onwards. In this case, you want to collect payment for the January, February, March, and April billing periods immediately. So, you will set the contracted start date as the 1st of January and pro-rata calculate the number of missed periods:

- 1 Jan - 31 Jan - Missed billing period
- 1 Feb - 28 Feb - Missed billing period
- 1 Mar - 31 Mar - Missed billing period
- 1 Apr - 30 Apr - Missed billing period
- 1 May - 31 May
- 1 Jun - 30 Jun
- 1 Aug - 31 - Aug
- 1 Sep - 30 Sep
- 1 Oct - 31 Oct
- 1 nov - 30 Nov
- 1 Dec - 31 Dec

"Future-proof" your proposals by using pro-rata to ensure you don't miss a billing period

Many Practice Ignition users like to renew their client agreements each year as a way to manage scope creep, up-sell, or simply reconfirm the terms of their agreement. Let's imagine that I renew all my agreements on the 1st of January each year. I send all my new agreements in December, however some of my clients might not sign their contract before the 1st of January passes. So, to ensure I don't miss out, I'll do two things:

  • ensure the start date is set to the 1st of January and the recurring invoice day is set to the 1st 
  • enable pro-rata on all recurring services. 

Most of my clients sign on time but one client misses the "deadline" and signs on the 5th of January. In this case, PI automatically identifies the 1st of January as a "missed billing period" and generates an invoice as soon as the client accepts. Better still, if the client hadn't signed until February, pro-rata will continue to re-calculate the number of missed billing periods and adjust the on-acceptance billing appropriately.  

When will payments be collected?

pro-rata invoices are considered One-off payments. As such, your one-off payment schedule will apply

For full details on using pro-rata and catchup payments, click here.

Included Services

When should I use this billing type?
If you provide value-added or complimentary services as part of your packages, use the Included Service billing type. Included services allow you to add additional services to your proposal that have no price. 

When will an invoice be generated?
The included service billing type does not generate any invoices in Xero or QuickBooks online, but any included services in your proposal will be displayed on your invoices. 

When will payments be collected?
The included service billing type does not generate any payments.

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