Tag Archives: Compensate

How Do You Improve Quote to Collections Flow? Four Tactics

Situation: A company is losing billings because individual billings are getting lost in their process flow. Requests for enhancements come from clients to Project Managers. Project Managers take on development of the enhancements but are sometimes too busy to keep track and don’t report their work to the billing department. How do you improve quote to collections flow?

Advice from the CEOs:

  • It appears that two processes are missing:
    • A formal trigger mechanism to assure that a PO is in place BEFORE Project Managers undertake enhancement work, and
    • Managers are incentivized to assure that the client is billed and revenue collected for the work performed.
  • Formalize the process and do not allow Project Mangers to initiate any work until a work request is logged in the billing system and a PO is received from the customer to cover the expense.
    • Develop a process to track customer requests, estimate development and transmission to billing, forwarding of estimates by billing to the customer with a request for a PO, and upon receipt of PO authorization by billing to initiate work.
    • This can all be tracked and managed by most accounting software packages.
    • This process will:
      • Facilitate tracking of actual expense vs. estimate;
      • Tracking of requests for which no POs are received, for client follow-up; and
      • Tracking of enhancement requests to guide future product development.
  • Compensate Account Managers to track and manage the process.
    • If an Account Manager receives a commission for enhancement work they will have an incentive to keep track of all ongoing work, both for timely delivery and to assure that the customer invoiced for the work.
    • Commissions paid to the Account Mangers will be a small percent of the extra revenue collected.
    • To improve process management, schedule regular meetings to review all enhancement and other work being done for clients. Review and assure that all work has accompanying POs, that the work is being completed on a timely basis and in line with original estimates, and that the company is invoicing and being paid for the work. Empower Account Managers to organize and conduct these meetings. Their incentive will be the commissions they will collect on payment for the work.
  • Build upgrades and a certain number of enhancements into the product price.
    • This enables to company to increase prices and to collect prepayment for enhancements and upgrades that may or may not be requested.
    • Use the process outlined above to track enhancements which are credited against the prepaid accounts, and to assure that enhancements above the prepaid limit are invoiced.

How Do You Select and Pay Board Members? Six Suggestions

Situation: A company has been advised to augment their Board of Directors. The principal objective is to access mentorship and advice, particularly in the areas of gaining critical mass and marketing. How do you select and pay Board members?

Advice from the CEOs:

  • If the principal needs are mentorship and advice in growth and marketing, pursue an Advisory Board first. Compensation for Advisory Board members is much lower and saves the need to purchase expensive Directors and Officers Insurance for Board Members. If, in the future, you decide to expand your Board, you can elevate your best Advisory Board members to your Board.
  • Offer Advisory Board members one-year service commitments. Particularly if the company is early-stage needs may change rapidly.
  • As to specific members, select Board members who will help you hold the company to its vision and mission, including a member who offers financial advice and experience for the CFO, a resources and benefits expert, and industry leaders. Align these selections with the business model of the company.
  • If your patent portfolio is a critical asset, consider an attorney with experience in infringement issues – as distinct from expertise in IP.
  • Compensation for Advisory Board or BOD members need not be uniform. Key advisors often are compensated more than strategic advisors. Enthusiasts may serve as advisors for free.
  • Stock compensation for Board members may be as low as 1%, pre-funding. They will be diluted as you go through successive rounds of funding. You may offer your chairperson more than regular members.