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Billing Configuration ​

Configure all aspects of how billing works in Hidma, from rates and taxes to document formatting and charge types.

Overview ​

The Billing Configuration section in Hidma controls every aspect of how you bill clients for your services. This is one of the most critical configuration areas in the system because it directly affects revenue generation, invoice accuracy, client communication, and financial reporting. Proper billing configuration ensures invoices are calculated correctly, formatted professionally, comply with tax regulations, and reflect your firm's pricing structure and business practices.

Billing configuration encompasses several interrelated areas: charge-out rates that determine what you bill for time, tax rates that ensure proper tax calculation and compliance, document numbering schemes that create professional invoice identifiers, charge and discount types that let you add fees and adjust pricing, and various other settings that control billing behavior and invoice appearance. Together, these settings create a comprehensive billing system tailored to your firm's needs.

Key Billing Configuration Areas ​

All billing configuration is accessed through Settings → Configuration → Billing Settings. This centralized location contains all the settings described below.

Charge-Out Rates ​

Charge-out rates determine what hourly rate applies when billing for team members' time. Hidma supports a sophisticated rate hierarchy where rates can be set at multiple levels with specific precedence:

Default Charge-Out Rate - The baseline rate used when no more specific rate exists. Perhaps $150/hour as your firm's standard rate.

Team-Specific Rates - Rates that apply to all members of a team, overriding the default. Perhaps the Tax Team bills at $200/hour while the Advisory Team bills at $250/hour.

User-Specific Rates - Individual rates for specific users, overriding both team and default rates. Perhaps senior partners bill at $400/hour while managers bill at $250/hour and associates at $150/hour.

Project-Specific Rates - Custom rates for particular client engagements, overriding all other rates. Perhaps a specific client has negotiated $175/hour regardless of which team members work on their projects.

The rate hierarchy applies these rates in order from most specific to least specific: Project rate > User rate > Team rate > Default rate. This flexibility lets you maintain simple base rates while accommodating client-specific pricing, individual expertise variations, and practice area differences.

Learn more about Charge-Out Rates →

Tax Rates ​

Tax rate configuration defines the sales tax, VAT, GST, or other consumption taxes that apply to your invoices. You can create multiple tax rates for different jurisdictions, client types, or service categories:

  • Standard rates for typical services (perhaps 20% VAT or 8% sales tax)
  • Reduced rates for specific service types eligible for reduced taxation
  • Zero rates (0%) for tax-exempt clients or services
  • Multiple jurisdiction rates if you serve clients in different tax regions

Beyond defining the rates themselves, you can set default tax rates for specific charge and discount types. Perhaps project management fees are always tax-exempt while professional services are taxed at the standard rate. These defaults automatically apply when you add charges or discounts to bills, ensuring consistent tax treatment without manual selection every time.

Tax configuration also determines whether rates apply at the bill level (one tax rate for the entire invoice) or line-item level (different rates for different invoice lines), depending on your Hidma implementation.

Learn more about Tax Rates →

Document Numbering ​

Every bill, receipt, and payment transaction needs a unique identifier. Document numbering configuration controls how these codes are generated:

Numbering Patterns - Choose between client code patterns (embedding client name abbreviations in bill numbers) or custom sequential patterns (clean sequential numbering with prefixes and suffixes you define).

Custom Elements - Configure prefixes (text starting each code), sequential numbers (auto-incrementing uniqueness), padding (zero-padding for consistent length), and suffixes (text ending each code).

Per-Organization Schemes - If you operate multiple legal entities, configure separate numbering schemes for each organization's documents.

Per-Document-Type Schemes - Set different patterns for bills vs. receipts vs. payment transactions, or use consistent patterns across all document types.

Proper numbering creates professional, easily-referenced invoices that maintain clear audit trails and support organized record-keeping.

Learn more about Document Numbering →

Charges and Discounts ​

Beyond billing for time, you often need to add charges (surcharges, fees, premiums) or apply discounts (early payment discounts, volume discounts, courtesy adjustments). The Charges and Discounts configuration section lets you define all the types of charges and discounts available when creating bills:

  • Fixed-amount charges (perhaps a $500 rush service fee)
  • Percentage-based charges (perhaps a 10% project management surcharge)
  • Fixed-amount discounts (perhaps a $100 first-time client discount)
  • Percentage-based discounts (perhaps a 5% early payment discount)

For each charge or discount type, you configure:

  • Name - How it appears on invoices and in selection lists
  • Type - Whether it's a charge (increases bill value) or discount (decreases bill value)
  • Default Tax Rate - What tax rate automatically applies when you add this charge/discount to bills
  • Affects Charge-Out Rate - Whether this charge/discount should affect average rate calculations for reporting purposes
  • Description - Optional explanation of when and why to use this charge/discount

Once defined, these charge and discount types appear as options when creating bills, letting you quickly add standardized fees or adjustments without manual calculation.

Learn more about Charges and Discounts Configuration →

Bill Due Dates ​

Automate and track due dates for all your bills within Hidma. Configure your default payment terms to have due dates automatically calculated on every new bill.

Setting Default Payment Terms:

  1. Go to Settings → Configuration → Billing Settings
  2. Define your default payment terms (number of days from invoice date)
  3. All new bills will automatically include a calculated due date

Template Control: Due dates are enabled by default on all document templates. To toggle them on or off for specific templates, visit Settings → Customisations → Document Templates.

TIP

Bill due dates are automatically included when copying bills to Xero, ensuring payment terms stay synchronized across both systems.

Request for Payments (Pro Forma Invoices) ​

This setting fundamentally changes how your billing workflow operates. When enabled, Hidma generates Requests for Payment (RFPs) or Pro Forma Invoices instead of standard invoices. RFPs are not legally binding invoices - they are preliminary billing documents requesting payment before a formal invoice is issued.

How It Works:

When Request for Payments is enabled, all bills you create become RFPs rather than invoices. These RFPs show clients what they owe and request payment, but they're not official invoices. Once the client pays the RFP in Hidma, the system automatically generates a proper invoice based on that RFP, which you can then send to the client as the official billing document.

Why Use RFPs:

This approach is particularly common in legal practice and some other professional services where firms prefer to receive payment confirmation before issuing official invoices. Benefits include:

  • Clients see billing amounts and can approve/pay before receiving formal invoices
  • Official invoices are only generated after payment is confirmed
  • Reduces risk of unpaid invoices since formal invoices follow payment
  • Matches certain jurisdictional or professional requirements

When to Enable:

Enable Request for Payments if your firm follows this two-step billing process (RFP first, invoice after payment). Leave it disabled if you issue standard invoices directly without the RFP step. Most firms use standard invoicing, but legal practices and firms in certain jurisdictions often prefer the RFP approach.

Bill Details Configuration ​

Control what information displays on each bill row (line item) on your invoices. These settings determine how detailed your invoices are and what information clients see about the work performed:

User Full Name - Whether to show the full name of the team member who performed the work on each bill row. Showing names provides transparency about who worked on the engagement. Hiding names creates cleaner invoices focused on tasks rather than individuals.

Date - Whether to display the date work was performed on each bill row. Dates help clients understand when work occurred and verify timing. Hiding dates creates more concise invoices when timing details aren't critical to client communication.

Comments - Whether to include time entry comments/descriptions on bill rows. Comments provide context about what was done during each time entry, offering detailed transparency. Hiding comments creates simpler invoices when task descriptions are sufficient without entry-level detail.

Minutes - Whether to show the amount of time (hours and minutes) associated with each bill row. Enabling this displays the time duration for each entry (e.g., "2:30" for 2 hours and 30 minutes). Disabling this hides time amounts, showing only the monetary value of each line item. Most time-and-materials billing includes time amounts for transparency, but some firms prefer to show only dollar amounts.

These bill detail settings directly affect invoice appearance and the level of detail clients receive. More detail provides transparency but creates longer, more complex invoices. Less detail creates cleaner, more concise invoices but provides less granular information. Balance transparency with readability based on your client relationships and industry practices.

External Code ​

Configure external code fields used for integration with other systems or for internal reference purposes. External codes provide additional identifiers that can be used for:

  • Integration with accounting systems (QuickBooks, Xero, etc.)
  • Reference numbers for other business systems
  • Custom tracking codes for reporting or categorization
  • Client-provided project codes or matter numbers

External code configuration ensures proper data flow between Hidma and your other business systems, maintaining consistent identification across platforms.

Configuration Workflow ​

When setting up billing configuration for the first time or reviewing existing configuration, we recommend this sequence:

1. Establish Base Rates ​

Start with charge-out rates since these are fundamental to revenue calculation:

  • Set a default charge-out rate for your organization
  • Configure team rates if different practice areas have different pricing
  • Set user-specific rates for individuals whose pricing differs from team standards
  • Document any project-specific rate agreements

2. Configure Tax Compliance ​

Next, set up tax rates to ensure regulatory compliance:

  • Create tax rates for all jurisdictions where you operate
  • Define zero-rate/exempt rates for tax-exempt scenarios
  • Set default tax rates for different charge and discount types
  • Verify rates match current legislation

3. Set Up Document Numbering ​

Establish professional document identification:

  • Choose numbering patterns (client code vs. custom sequential)
  • Configure prefixes, padding, and suffixes
  • Set up per-organization schemes if operating multiple entities
  • Test patterns to ensure professional appearance

4. Define Charge and Discount Types ​

Create standardized charges and discounts:

  • List all types of fees you regularly charge (rush fees, admin charges, etc.)
  • List all types of discounts you regularly offer (early payment, volume, courtesy)
  • Configure each with appropriate tax defaults and descriptions
  • Document when each should be used

5. Determine Billing Workflow (RFP vs. Standard Invoicing) ​

Decide whether to use Request for Payments workflow:

  • Assess whether your firm issues RFPs/Pro Forma invoices before final invoices
  • Enable if legal practice or jurisdiction requires RFP-first approach
  • Leave disabled for standard direct invoicing
  • Understand the two-step process if enabling RFPs

6. Configure Bill Details Display ​

Determine what information appears on invoice line items:

  • Decide whether to show user full names on bill rows
  • Choose whether to display work dates on each entry
  • Determine if time entry comments should appear on invoices
  • Decide whether to show time amounts (hours and minutes) on each row

7. Configure External Codes (if needed) ​

If integrating with other systems:

  • Set up external code fields for accounting system integration
  • Configure client-provided reference codes
  • Test data flow to external systems

Best Practices ​

Billing Configuration Tips

Understand RFP Impact Before Enabling The Request for Payments setting fundamentally changes your billing workflow. Don't enable it without understanding the implications - all bills become RFPs requiring payment before generating actual invoices. This is appropriate for legal practices following RFP-first billing, but inappropriate for most firms using standard invoicing. Once enabled, your entire team needs to understand the two-step workflow.

Document Your Decisions Billing configuration affects all invoices and revenue calculations. Document why you configured settings the way you did. Perhaps "Team rates reflect market positioning - Tax at $200/hr for compliance work, Advisory at $250/hr for strategic value." Future administrators need to understand the reasoning behind configuration choices.

Test Before Going Live Before finalizing billing configuration, create test bills to verify everything works as expected. Check that rates apply correctly, taxes calculate properly, document numbers look professional, and charges/discounts work as intended. It's far easier to adjust configuration during testing than to correct errors after you've sent invoices to clients.

Review Annually Billing configuration should be reviewed at least annually. Rates might need adjustment for inflation or market changes. Tax rates might change due to legislation. Charge and discount types might need updates as your service offerings evolve. Regular review keeps configuration current.

Coordinate with Finance/Accounting Billing configuration has financial and accounting implications. Involve your finance team when setting up or modifying billing configuration. They can ensure tax rates are correct, document numbering meets audit requirements, and rate structures align with financial projections.

Maintain Rate History When updating rates, keep records of when changes occurred and why. Perhaps "Increased Tax Team rate from $175/hr to $200/hr effective January 1, 2024 - reflects market rate adjustments and team expertise growth." Rate history helps explain revenue changes and supports client communications about rate increases.

Start Simple, Add Complexity as Needed Don't over-engineer billing configuration initially. Start with simple rate structures, minimal charge/discount types, and straightforward numbering. Add complexity (project-specific rates, numerous charge types, elaborate numbering schemes) only when business needs justify it. Simpler configuration is easier to maintain and less error-prone.

Communicate Changes to Team When you modify billing configuration, inform team members who create bills. If you add new charge types, they need to know when to use them. If you change rate structures, they need to understand which rates apply when. Clear communication prevents confusion and billing errors.

Common Configuration Scenarios ​

Scenario: Single-Rate Firm ​

Situation: Small firm where everyone bills at the same hourly rate with no client-specific pricing.

Solution: Configure one default charge-out rate (perhaps $200/hour). No team rates, user rates, or project rates needed. One tax rate for your jurisdiction. Simple sequential document numbering. Minimal charge/discount types. This straightforward configuration works perfectly for uniform pricing models.

Scenario: Practice-Area-Based Pricing ​

Situation: Firm with three practice areas (Tax, Audit, Advisory), each billing at different rates reflecting different market positioning and service value.

Solution: Configure default rate as baseline. Create three teams (Tax, Audit, Advisory) and set team-specific rates ($200/hr for Tax, $225/hr for Audit, $250/hr for Advisory). Team membership automatically determines billing rate. User-specific rates can still override for senior personnel. This structure maintains simplicity while accommodating practice area pricing differences.

Scenario: Seniority-Based Pricing ​

Situation: Firm bills based on individual seniority - partners at $400/hr, managers at $250/hr, associates at $150/hr - regardless of which practice area they work in.

Solution: Configure user-specific rates for each person based on their seniority level. Perhaps all partners get $400/hr rates, all managers get $250/hr, all associates get $150/hr. When someone gets promoted, update their user rate. This individual-based structure ensures appropriate rates regardless of project or team.

Scenario: Multi-Jurisdiction Operations ​

Situation: Firm serves clients in multiple states/provinces with different sales tax rates.

Solution: Create tax rates for each jurisdiction (California 7.25%, New York 8.875%, Texas 6.25%, etc.). When creating bills, select the appropriate tax rate based on client location. Perhaps add a client custom field for "Tax Jurisdiction" to help determine correct rate selection. Ensure team members understand how to select appropriate rates for each client's jurisdiction.

Scenario: Complex Pricing with Client-Specific Rates ​

Situation: Large firm with team-based standard pricing but many client-specific negotiated rates.

Solution: Configure team rates as defaults (Tax $200, Audit $225, Advisory $250). For clients with negotiated rates, configure project-specific rates on their projects. Perhaps Client A negotiated $175/hr across all work, so their projects have $175 project rates overriding team rates. Team rates apply to all other clients. This hybrid approach maintains standard pricing while accommodating client-specific agreements.

Situation: Law firm wants clients to approve and pay based on preliminary billing before issuing official invoices.

Solution: Enable Request for Payments in billing configuration. All bills created become RFPs (Pro Forma invoices) showing clients what they owe but not serving as legal invoices. When a client pays an RFP in Hidma, the system automatically generates the official invoice based on that paid RFP. The firm sends the official invoice to the client as the formal billing document. This two-step process (RFP → payment → invoice) matches legal billing practices where official invoices follow payment confirmation rather than requesting payment.

Need Help?

Billing configuration is fundamental to revenue operations. Take time to set it up correctly, test thoroughly, and review regularly to ensure accurate invoicing and proper financial tracking.

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