If you’ve ever looked at your desk and thought, “Another invoice? Really?”, you’ve already experienced invoice fatigue. It’s that feeling when you are always paying for another invoice when you thought you took care of everything. Bills piling up usually means money going down the drain. Maybe it’s time to reduce IT support costs for your company?

 

A quality MSP will use what is called a PSA (Professional Service Automation) platform for organizing different types of invoices into PSA contracts based on approximately five categories of service. Using the right type of contract is essential to reduce IT support costs.

• Types of PSA contracts 
  • Managed IT Contracts 
    • This should, more or less, be a set cost for monthly Managed IT services, but they vary wildly based on who your Managed IT Service Provider is.  Ideally, the MSP should provide a robust stack of IT services so you can sleep easy, but that also varies greatly between IT support vendors.
  • Hours Accumulated Contracts 
    • Retainer Contract 
      • 10, 20, 50 hours? What is your retainer purchase amount and how frequently do you pay for it? 
    • Block Hour 
      • We love this one for low volume accounts. They contact us for 15 minutes, and then they pay for 15 minutes. No confusion, no strings, just plain and simple. 
    • Time and Materials 
      • Commonly used for IT support companies that simply do not know how much the project will ultimately cost but will hopefully ballpark estimate it with you. 
         
        NOTE: These contracts are designed as a traditional way of providing IT support where something is broken and they intend to fix it. There is no IT stack that is proactively protecting you, as we discussed in the Managed IT contract section. 
  • Firm Fixed 
    • This is ideal for set projects. You know exactly how much the cost is right off the bat and you pay for it upfront or upon completion of milestones. 

Why Organizations Pursue Per-Hour Type Contracts

• Budget Constraints 
  • They are a very small business that simply does not need nor can afford that level of support no matter what the risks are. It’s completely understandable why organizations cut corners to make a profit. There’s no business unless you have money coming in to pay the costs and salaries of everybody involved. 

• IT Value 
  • The DIY Crowd 
    • A lot of DIYers starting out with 5 to 20 employees do not see the value of what the IT support company is selling. Usually, something catastrophic (ransomware, loss of data, rogue employee) must occur before they reconsider and ultimately give in to Managed IT services 
  • The Family 
    • They have a son, father, uncle, or somebody that has been providing IT services forever. We discuss the limitations of these types of mid-level IT specialists here. The desire to reduce IT support costs might not be greater than keeping a good relationship with your family, which is quite understandable.

When Organizations Convert to Managed IT

• Compliance 
  • Unfortunately, businesses of even two people may require a Managed IT Support company simply because of a compliance mandate like HIPAA or Sarbanes-Oxley which requires the viewing of IT logs, next-gen endpoint protection, a disaster recovery plan, and annual risk assessments where the organization promises to remediate issues by next audit or face the consequences.   

• Invoice Fatigue 
  • Invoice fatigue is a pretty simple concept. It’s what happens when the number of separate invoices you receive doesn’t align with the services being provided or the values being paid. Whether it’s a monthly package or a retainer contract, you’re getting inundated with multiple invoices for every small thing being done around the business, sometimes at $2000 a pop. 

• Catastrophe 
  • Ransomware wipes the network environment for weeks, sometimes a good month, and depending on how good or bad the backup is, sometimes they are down forever. The organization simply never rebounded from the unforeseen event. 

We’ve seen this happen plenty of times. A company does great work, but the client dreads the billing process, does not want to commit to the level of service necessary to prevent impending doom, and if/when it happens, they blame the IT company for the event rather than looking inwards. Alternatively, a couple of good scares and backup recoveries, invoice fatigue kicks in, they start wondering if it’s worth shopping around for an alternative IT service provider instead of engaging in conversation about a more proactive Managed IT relationship.

Bad Managed IT Contracts

Your team finally commits to Managed IT, but services are not all-encompassing. Sure, there’s AMC (Adds, Moves, or Changes) that invariably have to be billed by the Managed IT company, but what we are talking about is Managed IT that only monitors the IT stack but charges for everything else. You believe you’ll finally reduce IT support costs, but unfortunately you got a bad deal. 

Here’s an example. 

Let’s say you’re working with an IT service provider. Instead of sending you one invoice at the end of the month with a detailed report of everything they accomplished, they send: 

• One invoice for labor. 
• Another for cables, hardware or any parts you may need. 
• A separate one for software licensing. 
• And yet another for each minor support ticket. 

At the end of the month, they were left with their regular Managed IT monitoring month but then an additional $2000 or $3000 for onsite this and remote support that. 

This type of invoice fatigue can: 

• Create unpredictable cash flow 
• Chip away at client loyalty by making them question the value and whose interests the vendor is serving. 
• Drain productivity from your own staff due to postponing the investments necessary to improve operational efficiencies.

A Better Way to Handle Billing

The good news is that fixing invoice fatigue doesn’t take a complete overhaul. A few changes are required in the IT relationship. You can request the following: 

• Consolidate 
  • Roll all services in to one clean invoice per month. Clients still see the details, but without the clutter; and make it clear you no longer want significant and frequent unexpected costs. 

• Keep it clear 
  • Use plain language. Group similar charges together. No one should need a magnifying glass to understand what they’re paying for. 

When billing is simple, people notice. And more importantly, they appreciate it, even if they don’t realize it themselves. 

How to Reduce IT Support Costs: Efficient Billing, Happy Clients Summary

At the end of the day, invoices are more than just paperwork. They’re part of the customer experience. If you make it hard, clients will eventually go looking for someone who makes it easier.

At NetworkAntics, we’ve seen invoice fatigue strain good working relationships, and we’ve also seen how much smoother things run once billing is streamlined. That’s why we’re committed to always improving how we operate – to make our clients’ lives easier. 

If you feel you’ve been in this situation or still are, either as a client or as a service provider, it may be time to rethink how you do things. There’s always room for improvement and optimization. And if you need a hand optimizing anything on your end or finding an MSP that’s just right for you, be sure to contact us so we can start improving things for you and reduce IT support costs for your business.