5 Tips to Elevate Your Firm with Automated Billing

The days of mailing paper invoices to clients and receiving envelopes containing paper checks is a dim memory for most businesses.  In this age of electronic transfers and digital currencies, an automated billing system is required for businesses that know efficiency is a key to future growth.

Choosing the right billing solution isn’t easy for financial advisors, and the stakes are high. Flawed billing workflows can cause a multitude of expensive and embarrassing problems, such as using the wrong account valuation, not checking that your fee rate matches your Form ADV filings, or applying discounts incorrectly.

The right billing software can greatly reduce the time required to run the billing cycle and improve its accuracy. It can also help meet compliance requirements and assist in explaining fees to clients in an open, transparent and understandable manner.

With many tools available in the market, how can advisors be sure they are making the best decision? Here are five tips to elevate your firm with automated billing.

Ease of setup and scalability

An automated and unified solution is key. Without automation, your billing process can be both time-consuming and error-prone. Some advisors believe that they have already automated their billing by using a combination of performance reporting, Excel, Word, and their CRM. However, any workflow that requires manually switching between different applications is not efficient. Look for a solution that allows your team to perform all billing functions within a single application.

Keep in mind that not just any automated billing tool is worth the investment. Your system of choice should provide seamless workflows that require minimal data entry. Pre-designed fee templates eliminate the need for reformatting and tweaking. Simple and clear system set-up and maintenance are critical requirements that cannot be overlooked, so don’t settle for anything less.

Your solution of choice should scale as your practice grows. Today’s technology tools have remarkable capabilities. For example, the recently launched Fee Manager product from First Rate can perform calculations at the rate of 100 accounts per second, which scales up to process 2 million accounts overnight without human intervention. It would be impossible to accomplish that by relying on a patchwork of disconnected programs!


Every firm is different in how it approaches billing, and your software of choice should match your needs. Some of the configurable parameters to consider include billing timing (monthly, quarterly), billing model (AUM, fee for service, retainer), and whether the fee is one-time or recurring.

Choosing technology that can support your current billing processes is the easy part. The harder part, and something many advisors overlook, is choosing software that is capable of supporting both the status quo and the firm’s strategic direction for the next three to five years. This is especially critical when growth includes mergers and acquisitions. The ability to reconcile two sets of billing schedules with minimal impact to clients can result in higher client retention rates post-merger.


Discerning clients often require firms to combine products and custodian arrangements to meet their specific needs. The fee billing solution that you choose must be dynamic enough to handle multi-custodian, multi-level fee schedules. It should also allow you to include or exclude asset groups, manage exceptions, and make custom adjustments to specific invoices.

At First Rate, we know that advisors need a clear and easy method of handling exceptions like exclusions and position billing rates at the account or household level, so our Fee Manager solution is built to support a wide variety of billing scenarios.

The cost of flexibility is often increased compliance documentation in the event of an SEC audit. Make sure that your billing system provides an audit trail of all adjustments and exceptions. All changes should be tracked, all historical periods maintained, and the system should allow advisors and supervisors to add relevant notes.

Business Intelligence

Business intelligence (BI) tools can help advisors analyze their practice and make better decisions. Firms should ensure that their billing system supports tracking revenue and valuation goals. Many packages can also assist the corporate team in monitoring advisor performance, providing insight into revenue flows, and tracking unpaid fees for improved collection rates.

Smart benchmarking will offer valuable insights into your business. With a tool that provides intra-firm benchmarking, First Rate Fee Manager can compare one advisor’s fee metrics to others within the firm to identify outliers, drive business development efforts, and help with practice segmentation.

Security and Compliance

At First Rate, we believe that advisors should not spend their time worrying about security. Our cloud-based, hosted solution offers secure access across devices and offices. The use of SOC2-certified data centers and encryption means not having to worry about unauthorized access, and our robust monitoring system flags potential problem areas to ensure consistent fee levels for compliance with the fiduciary rule.

Best Practices for Choosing Billing Software

With dozens of billing solutions on the market, advisors have many choices for streamlining this important back-office function. To help make a meaningful comparison that yields the right answer for your firm, begin by distilling software functionality into categories. Insist on ease of setup and maintenance. When considering billing configurability and complexity, think about where your practice is today, as well as where it will be in three to five years. Ask about business intelligence tools and insist on top-of-the-line security and compliance support.

Finally, remember that the technology package itself is only one part of the solution. A support team of experts can take it to the next level by helping your firm set up weekly, monthly, and quarterly workflows to ensure that the billing tool maximizes its usefulness to the firm. Automate as much as possible and invest in training your staff on the new tool. If you are looking for an accurate and reliable option to automate your firm’s billing and tap into your billing data to drive business intelligence insights, reach out to our First Rate team and ask for a demo of our Fee Manager billing solution.

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