8 Billing, Collections & Payment-Related KPIs To Boost Your MSP's Cash Flow

Accounting professionals are wired differently than IT professionals. That statement is not meant to disparage either group, but to acknowledge the disparities between mindsets and business focal points. Relatively few people understand the meaning behind the dizzying array of critical financial metrics and also have a strong comprehension of all things IT.

Successful MSPs get both. While one individual may not be responsible for the financial and technology sides of the house, the collective team must know what’s going on with critical client-oriented activities, the IT ecosystem, AND all back-office operations. No key metric should slip their attention.

The performance of billing, collections and payment operations is the perfect example. MSP owners and other business unit leaders should have a firm handle on the key metrics that can affect their ability to pay the bills while expanding the organization. Without a good understanding and proper oversight of these critical operations, even the best of companies have been known to stumble—if not fail. The list of IT services companies with sizable contracts that nonetheless ran into financial difficulties due to poor collections methods is longer than most would expect. Banking on MRR before clients pay their bills can lead to unhealthy financial projections and get MSPs into trouble over the long-term.