Bill By User: Billing Precision

By Jonathan James, IT Glue

Are you leaving money on the table? If you’re not billing clients with as much precision as possible, you won’t even know the answer to this question. Perhaps, one client is demanding a disproportionate level of attention from your internal resources, and while you can intuitively know this, it’s not documented and quantified, and thus, difficult to take back to the client. When billing is tied to the wrong metrics, you won’t get the degree of precision to maximize profit, and measure internal resource allocation accurately. The services level agreement may make sense in theory, but in practice you might soon realize that you’re undercharging and taking on more work than was let on.

How do you achieve more precision? Billing by user.

When your business model is based on servicing multiple clients, your billing model should take into account that no two clients are the same. While there are exceptions, a rule of thumb will be that the more end-users there are, the larger and more complex the network will be, and a higher number of service tickets will be received. When you bill by user, you’re charging clients on an apples to apples basis.