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Managing software subscriptions with Ignition & XPM
Managing software subscriptions with Ignition & XPM

Learn our best practices for managing your clients’ software subscriptions when using Ignition & XPM.

Isabelle Miller avatar
Written by Isabelle Miller
Updated over a week ago

Managing your software subscriptions fees in Ignition is an easy way for you to benefit from the automated billing, payments and reconciliation processes.

However, when utilising XPM with Ignition there are some important points to consider with your billing and profitability reports .

If your practice currently utilises a WIP wash up process to report on profitability then it’s important to ensure that software subscription invoices aren’t recognised as revenue on your XPM Jobs.

Ideally, these invoices should be excluded from allocating to an XPM job altogether, but if they are allocated to jobs then you should at least make sure to add the costs associated with the disbursement fee to the job.

We recommend structuring your Ignition proposals in a way that will ensure software subscription fee invoices do not allocate to an XPM Job as a negative WIP credit (see this article for more information on how to manage other Job Costs with XPM & Ignition).

To prevent this from the beginning, follow the steps below to learn how to set up your subscription fee proposals in Ignition.

Please note: the following process is only applicable to users that have XPM connected and manage their WIP.

Step 1 - Create your Software Subscription Fee Service templates in Ignition

Navigate to your Ignition service library under Libary → Services and set up a new service for each of your Software Subscription fees following the steps in this support article,

While setting up your software services make sure to map each of the Ignition disbursement fee services to a disbursement fees Xero account to ensure your costs reflect accurately in your Xero P&L.

Pro-tip: We have a number of software subscription service templates that are available on request including: Xero, Quickbooks Online, Dext & MYOB packages. Reach out to our support team or your Account Manager to have these imported directly into your account.

Step 2 - Create your Software Subscription Fee Proposal

Click Create New Proposal to start setting up your software subscription fee proposal, then follow the steps in this support article to guide you through Step 1 to Step 4 in the proposal editor.

Under the Automation step, ensure Proposal is selected in the “Group related billing by” drop-down.

The Proposal billing grouping will mean that any Xero invoices generated from this proposal will have a reference number that is unique to this proposal.

This PROP reference number will differ from any invoices generated from other client proposals which means each proposal for your clients will generate separate invoices when using the proposal billing grouping.

When invoices sync overnight from Xero into XPM, any invoices with reference numbers that match the client order number on an XPM job will allocate to the financial tab of that job.

As your software subscription fee invoices will have a unique proposal reference number from other client proposals, this proposal billing grouping ensures that these invoices are not allocated to an Annual Billing Job in XPM.

If any Xero invoices can’t find a job with a matching client order number then the invoice will allocate against the client’s file in XPM as a miscellaneous invoice or create a new Adhoc job depending on your XPM settings (see this article for more information).

If the invoice allocates as a miscellaneous invoice against a client in XPM it will not impact your global practice WIP figure. However, if the invoice creates an ad hoc job (as per your settings above), it will reduce your global practice WIP figure.

After you have selected the Proposal billing grouping, there is no need select Build Worklow from the Automation step as this will avoid setting up a job in XPM for your Xero subscription fee proposals.

Finally, complete the Presentation step of the proposal before sending the software subscription fee proposal to your client.

Step 3 - Save your Software Subscription packages as Custom Proposal Templates

Follow the steps in this support article to start saving each one of your software subscription packages as a Custom Proposal template. (Requires a Professional or Scale plan)

Saving this software subscription proposal as a custom template is an incredibly efficient way to send these proposals out at any time, it minimizes human error as well as ensuring negative WIP is accurately reflected against your XPM jobs.

Does your practice generally include your software subscription fees in your Annual Service Agreements?

If so, see this article on more information on how to set up and map XPM Cost Templates to Ignition Disbusement Fee services to have Costs automatically allocate to your Annual Service Agreement billing jobs in XPM.

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