In a recent webinar, Chris Mackley, Director of Finance at SBM Management Services, described a challenge many companies face—non-standard billing. More specifically, Mackley defined two key drivers behind the company’s non-standard billing: Complexity of labor and ad hoc services.
Non-standard billing has become the new normal for many companies. SBM Management Services typifies this shift in billing strategies. SBM provides custodial and other soft services to a wide range of customers in over 500 locations across the United States. As the company’s Director of Finance, Mackley would be the first to tell you that SBM offers straightforward services, but the company’s billing was anything but simple.
The following describes SBM’s two key drivers for non-standard billing as well as the agile solution Mackley put in place to simplify and automate billing processes.
Labor Complexity Creates Unique Pricing Needs
As a custodial service provider, SBM’s largest billable asset is labor. However, many factors influence how the company bills labor for its customers. Every location has different needs that Mackley and his team must consider. These include union fees, state regulations, size of the space being serviced, and management ratios for the customer.
“We have to price every single location that we work at differently,” Mackley said of SBM Management Services. “Our business development people will tell you there really isn’t one singular approach to how we have to price things, because of all the different variables that go into what we do.”
While SBM has base contracts for its customers, each labor factor complicates pricing during billing cycles. This variable complexity creates the need for each location to be priced individually, which prohibits the ability to define a consistent approach.
Ad Hoc Services
SBM’s services are provided on the customer’s site. The soft services needed for a warehouse or office space can change from month to month.
“Because we’re on site, customers are asking us to do additional work continuously,” said Mackley, “which we’re never going to turn down. Each month, that work tends to be a good portion of our revenue.”
These as-needed requests are random, real-time services that tend to be individually priced. SBM’s on-site manager has a working knowledge of the customer’s contract but must provide immediate quotes for these additional services. The site manager then needs to communicate the quoted price to the business team for appropriate billing.
Billing Accurately Among Complex Situations
Complexity and ad hoc requests lead to non-standard billing and put a terrific strain on SBM’s site managers. In addition to providing on-site custodial services, the managers were responsible for a manual and cumbersome billing process that couldn’t be centralized. To alleviate the strain on site managers and reduce errors, SBM turned to BillingPlatform to improve processes and limit the company’s dependency on the site manager.
With the implementation of BillingPlatform’s agile solution, Mackley and his team saw immediate results. This improved strategy allowed the company to:
- Capture contracted terms and automate “base” billing more efficiently
- Provide an intuitive interface that allowed site managers to record ad hoc services and associated rates
- Manage purchase orders to ensure available funds for each service billed
“BillingPlatform allowed us to take what’s overly complex, bare that down to a process that is a lot more simplified,” said Mackley. “Where the site managers used to be responsible for everything at the site level, now they’re only responsible for communicating to “finance” and to input when they’re providing these ad hoc services.”
At SBM, as-needed billing used to be the rule, now it’s becoming the exception. Mackley has utilized BillingPlatform to automate a manual process, so that site managers can focus on providing the services customers seek.
If you identified with the challenges outlined in this post, discover how BillingPlatform can transform your billing strategy by Contacting Us today.