Pre-Billing Configuration and Company Finance Setup
The session begins with essential pre-billing setup requirements in ConnectWise PSA. Colin emphasizes the importance of configuring company finance pages correctly before running invoices, including setting company status to active, populating the Account ID field for accounting package integration, and establishing billing terms and invoice delivery preferences. The billing setup table contains critical information that appears on invoices, such as remit-to details and default invoice templates. Invoice routing workflows enable multi-step approval processes, allowing organizations to implement checks and balances before invoices are sent to clients. The system supports routing to specific roles like account managers, ensuring proper oversight of billing activities.
Time & Materials, Project, and Agreement Invoicing
ConnectWise PSA supports multiple invoicing methodologies to accommodate different billing scenarios. For time and materials billing, the invoicing screen displays all billable records with configurable through dates and invoice dates for flexible billing cycles. Project invoicing includes progress billing capabilities, allowing MSPs to invoice fixed-fee projects in stages—such as 50% upfront, 25% at initiation, and 25% upon completion. Agreement invoicing handles recurring services separately, with the ability to generate invoices for future periods and cancel pending invoices that were generated prematurely. The system distinguishes between billing amounts and invoice amounts, accounting for time and products applied to agreements that may be covered under managed services contracts but still displayed to clients for transparency.
Special Invoice Types and Credit Management
The platform provides three special invoice types for specific scenarios. Credit memos function as product returns, allowing negative quantity entries that create credit balances applicable to future invoices and can be synced to accounting packages. Down payment invoices enable MSPs to collect deposits on large hardware orders, with the critical requirement to specify what the down payment applies to—such as a specific sales order—ensuring the deposit is correctly applied when the final invoice is generated. Miscellaneous invoices offer a quick invoicing option, though Colin recommends using sales orders or tickets instead for better tracking and workflow consistency.
General Ledger Mapping and Financial Reporting
GL mappings in ConnectWise PSA determine how invoice data flows to accounting packages, with four primary account types: revenue (T&M and fixed fee), revenue agreement (billing amounts), revenue agreement products (agreement additions), and revenue product (non-agreement product sales). The system supports hierarchical mapping from specific products up to broad categories, with most MSPs using product subcategory mappings for optimal granularity. Class systems enable tracking categories that map to P&L structures in Xero and QuickBooks, allowing differentiation between managed services, professional services, and technical services revenue streams. The financial dashboard provides real-time visibility into service work-in-progress (WIP), showing unbilled time entries on open tickets. By comparing total invoiced amounts to extended amounts in the invoice hours reconciliation column, MSPs can identify revenue leakage from tickets that remain open past month-end. Agreement profitability analysis reveals effective hourly rates by dividing invoiced amounts by hours applied, with member hourly costs factored in to calculate true profitability as the month progresses.
