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Billing for Consulting Services within Zuora

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Advanced Tutor

Billing for Consulting Services within Zuora

Hi Everyone,

 

Wanted to see how other companies using Zuora handle this.

 

Our company is planning to offer Consulting Services as a product, and wanted to implement billing for this in the most automated and scalable way possible. Would anyone be able to share how their company handles this?

 

The only thing we thought of so far was to do a manual rev rec on the invoice on the date that the consulting service took place. But doing this manually for thousands of accounts would not be scalable or efficient.

 

Thanks in advance!

4 REPLIES
Zuora Moderator

Re: Billing for Consulting Services within Zuora

@ilya_y - Just curious about a few things as you are starting to set up your Consulting Services product.

 

  • What time of charge model are you considering?
    • Are you going with a predetermined bucket of hours, billed in advance? The tracking/consumption of those hours is outside of Zuora
    • Are you thinking of a predetermined bucket of hours and any additional hours billed extra after they consume said hours (included units + overage)
    • Are you going with bill upon use where maybe they negotiate a flat fee of $500 bucks for 10 hours and every hour used after that is going to be at a different rate (recurring charge + usage charge)
    • Are you looking at something else entirely?

 



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Advanced Tutor

Re: Billing for Consulting Services within Zuora

We would be billing as the hours have been consumed. For example, a customer of ours uses 10 hours of consulting. We would want to input those hours into Zuora and create a bill.

Zuora Moderator

Re: Billing for Consulting Services within Zuora

@ilya_y

 

If you're looking to bill as they have been consumed, many customers take advantage of setting up an usage charge.

 

Usage charges are billed in arrears (after the hours/units have been consumed) and can be set up in various ways.

 

The model you're talking about is a classic model where you load and bill them at the end of a specified period.

 

For example:

Your customer is going to be billed $150/hr of consulting services.

In July, the customer consumed a total of 6 hours:

  • 2 hours on July 6
  • 3 hours on July 10
  • 1 hour on July 23

You load in the total of 6 hours into Zuora in a usage file on August 1st and when you generate your next invoice, you will see a charge that has the following:

6 hours consumed @ $150 hours = $900 for the period July 1st-July 31st.

 

When you set up this type of usage, you will be able to specify and associate it with an accounting code and revenue distribution model to recognize that within the period they are being billed for (recognize upon invoicing).

 

Here are some additional references:



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Honor Student

Re: Billing for Consulting Services within Zuora

This is always an interesting topic as the consulting leg of a business tends to want to bill hours every which way (including retainers).

 

I've seen several implementations of this where, as Amy mentioned, you utilize the usage charge model which is billed in arrears; recurring charges are helpful if you have a managed services agreement you need to bill out monthly.

 

On a similar note, we internally had a method of using Zuora to bill for consulting hours as follows:

 

a. We used Harvestapp.com for time tracking. This was beneficial because of the ease of use of the application and their apps to help prevent revenue leakage. Some of the more cumbersome interfaces like NetSuite's employee center was too clunky and harder to adopt.

 

b. We created an integration between Harvest and Zuora that would copy the approved hours to Zuora usage records each day automatically. We also had a manual push option in the event our billing department couldn't wait (e.g. month end close).

 

c. Once all the usage records where in Zuora, we had two different invoice templates, one with usage and one without. 

 

This is a more elaborate example but demonstrates that the flexibility is there if you have the need for a more robust and scalable solution outside of csv file uploads.

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