Service Groups and Services are the framework around which your estimates and jobs are built.
In FP, a "Job" refers to the work leading to the finished product. Even if you bill on a flat rate per product, you still want to track time to the services that you provide.
Naming Your Service Groups & Services:
Your base system comes with a number of service groups & services already set-up. You may find that these work fine or that you just need to add or adjust services within the FP system. Alternatively, you may decide to re-do them in a way that better fits your organization.
The Service Group and Service names can show on the printed Estimate, as well as any associated Invoice you create from the Job. You may wish to consider this in your naming conventions, and set-up structure of your Service Groups and Services. See more information on this below.
From general to specific, the components of tracking and planning your work are as follows:
Keep in mind that in most cases, it's better to err on the side of being more general when setting up your Service Groups & Services. You can always add more later if needed, but having fewer to choose from is often less complicated for your staff and makes things faster. Details can be added in the description field later.
If you are an FP Accountant user it is important that you involve your accounting team when determining how to set up your Service Groups and Services. Please refer to this article to learn more about how service groups are linked to QuickBooks: Part One - Ensuring the configuration in both systems is correct
The titles of the Service Groups & Services should be descriptive but allow for flexibility. The example below is what will be included in your base system.
Remember that you want to make services flexible enough for a variety of job types. Specifics can be defined in the description level of the estimate, or when tasking out calls to action for your staff members.
What’s the difference between an Internal Service, an Internal Expense and an External Expense?
An Internal Service is something you charge an hourly rate for, and applies to the work that employees track time to. The rate on the import sheet applies to the Company bill-out rate. Each internal service must have a billing rate even if you do not bill your clients based on time.
An Internal Expense is an expense that you purchase as inventory and sell back to your customer, at a fixed price per item. This can be with a flat rate mark-up or at cost. For example, if you purchase a box of 100 CDs for $100, and you sold each CD back to your client at $1.25 per CD, then this would be an internal expense. Internal expenses usually apply to a physical item, but can also be used for things like mileage that gets charged at a flat rate to a client.
An External Expense is an expense that is charged directly to your client, such as printing or courier services which have been outsourced to an external vendor or supplier. You charge your client a percentage mark-up on the amount you have to pay your vendor.
More on Naming Service Groups & Services
The structure and naming of Service Groups and Services that come with your system may need no, or very little tweaking to suit your agency. Something to bear in mind though - the names do appear on Estimates, as well as Invoices. As such, you may wish to name things in a way that are suitable to be client-facing, and not just for internal use.
Above, we're using a Freelancer on this proposed work, but perhaps this isn't something we would not want our client to see here, or on the Invoice. Perhaps we would not want the client to see that we use external resources at all.
You could choose to rename terms like "External Expenses" to something more client-facing. You could also choose to organize external resources under the Agency Services (for example) Service Group.
And then configure printouts to only show the group name level on the Estimate and Invoice. Keep in mind that there is plenty of flexibility.
We welcome your questions or concerns: email@example.com