A billing cycle is the recurring process a firm uses to prepare, submit, review, and follow up on client invoices.
Definition
For a civil engineering firm, the billing cycle starts when project work or a billing milestone is ready to charge and ends when the invoice is submitted and follow-up is underway. It can include collecting time and expense records, checking progress against the contract, preparing backup, getting internal approval, sending the invoice, and responding to client questions. Contracts and clients differ: some require monthly progress bills, milestone invoices, or specific forms and approvals. Firms may measure cycle time from period end to invoice submission, or track each internal and client review step separately. The billing cycle is not the same as the payment period or cash collection time. An invoice can be submitted on schedule and still be paid late. Owners use cycle tracking to find administrative delays, while accounts receivable and days sales outstanding describe amounts due and collection timing. ACEC provides resources for engineering firms.
How owners use it
- Set a recurring cutoff for timesheets, project manager review, invoice preparation, and submission.
- Compare period-end dates with invoice dates to locate internal approval delays.
- Track client review and follow-up separately from the firm's invoice preparation time.
- Example: A $24,000 monthly progress invoice is approved internally in 2 days and submitted on day 3; record 3 days from period end to submission.
