Leadtime was developed to shorten the lead time of tasks and projects in digital service companies. The aim is to serve customers faster and complete projects more efficiently. But what happens afterwards?

Once the service has been successfully provided, the next crucial step follows: invoicing. And this is precisely where it is decided whether the company will be paid quickly for its fast work - or whether valuable liquidity will fall by the wayside.

A company can operate profitably - and still fall into a crisis if the money arrives too late. Liquidity means that money is available to cover ongoing costs such as wages, rent or service providers.

If this is not the case, there is a risk of

Consistent liquidity management is therefore one of the key management tasks in any project-based company.

While the expenditure side - such as salaries or fixed costs - is usually rigid, the income side can certainly be influenced:

By invoicing and collecting receivables more quickly.

The key indicator for this is the days sales outstanding ( DSO ). It describes the period between:

The shorter this period, the faster the money is actually available to the company - and the healthier the liquidity.

But what is actually so complicated about billing in a digital service business?

To answer this question, we only have to imagine the different pricing models that arise in a typical SaaS business model:

These pricing factors have to be checked monthly for each customer, compiled and summarized in an invoice document. And each client may have their own billing logic, hourly rates, payment terms, etc.

Without a highly flexible and powerful system to account for these issues, the whole process becomes time-consuming and highly error-prone - especially if you have many clients to serve.

And that's a problem - after all, it's your money at stake.

Even a small error can dramatically extend the term of a single invoice, as the following example shows:

Let's say the company takes about a week to prepare its outgoing invoices at the beginning of the month and grants its customers a payment term of two weeks. If a customer then discovers an error in their invoice, the complaint is usually only made at the end of this period. It takes another few days to check the facts and correct the invoice, after which a new payment period of two weeks begins. The company then waits six weeks for the incoming payment. In the meantime, the funds are not available to settle the company's upcoming payments, such as salaries and rent.

Of course, a company has more or less large liquidity reserves to compensate for such fluctuations. Nevertheless, a debtor turnaround time that is regularly too long is a serious problem for a company. Liquidity reserves serve as a buffer for unforeseen expenses or temporary revenue deficits and should not be seen as a permanent solution for systematic delays in the receipt of payments. The continuous use of these reserves can lead to an erosion of financial stability and make the company more vulnerable to external shocks.

A long debtor turnaround time directly affects the company's liquidity: capital is tied up for longer than necessary and is not available for operational purposes or investments. This can lead to a vicious circle in which the company may have to take out additional loans to meet its ongoing obligations. This further increases fixed costs and thus reduces profitability.

In addition, of course, frequent invoice corrections and delays undermine customer confidence in the reliability and professionalism of the company. And once a customer has lost confidence, they will soon look for alternatives.

We therefore want to do everything we can to send our invoices correctly and as quickly as possible.

And this is precisely why we have integrated an extremely powerful billing system into Leadtime, which allows you to map all standard pricing models in the digital services sector: Thanks to the deep integration of project management and invoicing, invoices can be generated directly from tickets, work packages and time bookings.

This means

The "shorten lead time" principle thus becomes a holistic approach:

From the first task to the last payment.