This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
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Uranus has 27 moons, and there are just as many ways to bill an engagement using Xero or XPM. This topic is broken down into three sections:
- General guidelines for setting up engagements
- How to set up engagements with XPM
- How to set up engagements with Practice Ignition.
We will start by looking at some general guidelines that are relevant regardless of which system you use to create your engagement. We will then look a closer look at how to set up engagements specifically in XPM and finally, how you can improve your efficiencies by using Practice Ignition.
A mature male seahorse allegedly has seven nipples, and there are seven ways to bill an engagement. Here they are:
- Time and cost (billed at completion)
- Quoted/estimated fee (billed at completion)
- Time and cost (with deposit up front based on last year’s invoice)
- Quoted/estimated fee (with deposit up front based on estimate)
- Fixed-price agreement (in-period fees)
- Fixed-price agreement (in-advance fees)
- Fixed-price agreement (contract-period fees).
We can put these into two groups. The first four in the list are billed from XPM, we can call these time-charge agreements. The last three are billed from Xero or from Practice Ignition, we can call these fixed-price agreements.
It’s important to understand how different these two types of engagements are. Time-charge agreements are anything that is not billed over 12 monthly installments. For anything that falls outside the scope of a fixed-price agreement, a new time-charge agreement job must be set up. If the job is fixed price, a quote should be created and the time sheets entered, then the job is billed from XPM either based on the quote, or the time sheets entered on the job.
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