What is PSA?
PSA stands for Professional Services Automation. They are a type of software that caters to Professional Services firms like accounting, consulting, and creative firms. Similar to a project management tool, PSAs allow for project tracking, collaboration, and resource management. But where those tools stand out is in their capabilities to track project financials, bill clients, report on project costs, revenue, and resource utilization. In this sense, PSAs are closer to an ERP for service firms than a standard project management tool.
In this article, we cover the most common pitfalls we see and help our customers avoid, for PSAs. If you would like to read a complete guide on what professional service automation (PSA) software is, head here.
#1 Lack of Flexibility
Selecting the right PSA tool for your organization is crucial in ensuring a streamlined project delivery process and a smooth billing process. It’s easy to get overwhelmed with all the functionalities available on the market ranging from collaboration, document management, kanban views, Gantt charts, workflows, and even resource skills. While necessary from a project management perspective, those features should be your key decision factors. For service firms, time is money, and being able to invoice consistently and accurately is crucial in preventing revenue leakage.
PSAs can offer multiple billing types ranging from T&M, Fixed Fee, and Charge-Based Billing. Selecting the right tool also means choosing the tool that will let you bill your projects your way and not the system’s mode. Too often, system selection is based on shiny new features that don’t bring much-added value to the delivery process. Core functionalities are overlooked in the process, often causing service firms to adapt their operations to the tool when it should be the other way around.
If some of your projects are a combination of T&M and Fixed fee, plus your PSA doesn’t support Charged-Based billing, you’ll have to do some accounting gymnastics and create two separate projects for each billing type and then create multiple consolidating reports to have real visibility on that project. Your accounting department won’t like you.
The same goes for the timesheet. You may have been lured in by an auto-filling timesheet feature that fills your timesheet using your Google Calendar but has neglected to make sure that you can track your time in 6 minutes because you are a law firm.
Core functions would be the ones that are the most important, but also the ones that allow the most flexibility.
#2 Lack of Integration Capabilities
Since the purpose of a PSA is to streamline project delivery and client billing, it would be a shame to lose all this gained time when it comes down to client accounting and employee record maintenance.
Multiple PSAs on the market now allow you to generate invoices directly from the system itself. However, chances are you are still using a separate accounting system for the rest of your business. Having the capability to integrate your PSA with your accounting tool is crucial in ensuring a streamlined flow between the invoicing of a project and the reception of the payment. Project managers need to be able to see if an invoice has to be paid directly in the PSA. The accounting department has to be able to process invoices without having to enter them manually.
When selecting your PSA, you have to make sure that a bi-directional integration exists between it and your account software.
The same concept applies to PTO, expense reports, and employee records. You want to make sure that integration exists between your PSA and your HCM and Expense tool.
#3 Lack of Training & Communication
Training is a vital component of the success of your PSA implementation. Although it is not a component of a feature of the solution you’ve selected, it should be as important as one. Your troops need to be able to correctly use the tool from day 1. If using it becomes part of their day-to-day activities, chances of abandonment are now meager.
What’s even more important than proper training is communication. You need to keep your people informed during the selection process and use their feedback. You need to let them know why your company is looking to implement this kind of tool. By doing so, you let them know that this is a value-added tool to the organization and not a way of controlling and monitoring them.
More time tracked = more revenues = more profit at the end of the year =bigger bonuses.
Bottom Line
PSAs are powerful tools that can allow your organization to achieve a higher profitability level. But to do so, you need to effectively communicate your plan with your staff, stay away from all the gadget features, and concentrate on the core functionalities and integrations that are value-added. Oh and I almost forgot; training training training!
By choosing the right PSA platform for your organization, you will improve performance, thus improving business results. Learn more about professional services automation.
