The agency billing process, from tracked work to recorded payment

Why agency billing breaks down between delivery and finance

Delivery knows what happened; finance needs to know what can be charged. Those are different questions. A designer may finish a revision without knowing whether it belongs to the base scope, an approved extra or an agency correction. An invoice assembled from task names alone cannot resolve that distinction. The gap gets wider when sales promises stay in someone's inbox rather than reaching the reviewer.

Give each handoff an input, an owner and an exit condition. Sales hands over accepted terms. Delivery hands over dated work records. The reviewer hands over an eligible billing list. Finance hands over the invoice reference and later the receipt reconciliation. One person can hold several roles, but each decision still needs a visible record. The sales and delivery handoff guide covers the earlier commercial transition.

Step 1: agree scope and billing basis before work starts

Before assigning work, identify the client billing entity, service boundaries, currency, billing contact and payment terms. Choose hourly, fixed fee, milestone or retainer billing for the specific engagement. Specify whether the invoice is issued before delivery, after review or at an agreed event. A signed scope without a billing trigger leaves the agency guessing when finance can act.

Write the exception route at the same time: who can request an extra, who can approve its cost and where acceptance is kept. In a fictional website project, two revision rounds might be included while a third needs a separate decision. The project manager should be able to identify that boundary before assigning the third round. For the timing decision across work types, use advance versus arrears billing.

Step 2: record time and costs as the work happens

Log time close to the work, with the correct client, project, task, date and billable status. Notes should explain an activity and its purpose, without copying confidential messages into a field that might later become invoice evidence. If an entry needs correction, resolve it while the person who did the work can still explain it. Do not treat every recorded hour as automatically chargeable.

For externally purchased costs, keep the supplier receipt, agreed allocation and authorization in controlled records. These records support a later review; they do not imply that a billing tool automatically rebills an expense. ABH ties time tracking to clients, projects and tasks. The time tracking and invoicing overview explains that connection, while the pass-through cost guide handles the separate commercial decision for purchases.

Step 3: review and approve before invoicing

At the cutoff, compare the agreement with the work records. Check assignment, billable status, duplicate entries, already invoiced work and any proposed extra. Assign unresolved items to a person with a deadline rather than either hiding them or charging them speculatively. A review list can distinguish ready to invoice, awaiting clarification and deliberately non-billable work.

ABH supports single and bulk time entry approval. That is an internal review of time, not an invoice approval workflow or proof that the client accepted a scope change. Illustrative fictional example, USD, excluding taxes: a team logs 12 eligible hours at $100 and 2 hours correcting its own error. The reviewed billing list contains $1,200 of eligible work. The correction remains recorded but excluded. Use the timesheet approval checklist for detailed entry checks.

Step 4: issue the invoice with evidence

The invoice should identify the engagement, billing period, agreed basis, line amounts, due date and payment reference. Match the total to the reviewed billing list before sending it. For fixed work, reference the milestone or deliverable rather than making the fee look like an hourly charge. Attach or link only evidence the recipient is entitled to see.

ABH invoices have statuses, due dates and PDFs, with a public invoice link that lets the recipient view the invoice without an account. Proof-backed invoice lines can be traced to logged time. That trace supports explanation, but does not replace the agreement. Keep private team comments out of client-facing descriptions. Confirm the billing contact received the invoice and knows where to direct questions; delivery to an old contact can delay the whole process even when the arithmetic is correct.

Step 5: follow up and record the payment

Follow-up starts with the terms you agreed, not a new deadline invented after sending. Check whether the client has raised a specific dispute, needs a purchase reference or has already paid before sending another request. Keep an owner and next action for each open invoice. The payment terms guide explains how dates and references make this stage easier to reconcile.

Client funds arrive through the agency's external payment arrangement. Check the receipt amount, currency, date and reference against the invoice, including partial receipts. An Owner then records the payment manually in ABH's append-only ledger using exact amounts. ABH does not collect agency client money or charge a transaction fee. A client saying payment was sent is a reason to check the external receipt, not sufficient evidence to mark the balance settled.

A one page process you can copy

Use a short process card with six rows: agreement ready, work recorded, review complete, invoice issued, follow-up due and receipt reconciled. For each row, write the responsible person, required evidence, cutoff and destination record. Keep the card accessible to delivery and finance without sharing financial access more broadly than their roles require.

Run one engagement through the card before adopting it for every client. If the reviewer cannot find extra-work approval, fix the handoff rather than adding more invoice prose. If a receipt has no usable reference, agree a better reference for the next period. The month-end checklist handles the closing review across engagements. Billing mistake prevention is the companion diagnostic when a particular handoff repeatedly fails. Review the process after exceptions, not just when a new tool is introduced.

For a repeatable contributor cutoff and review habit, use the guide to consistent team time tracking.