Simply the Best (Practices): Lifting the Fog of Autotask Contract Configurations: (Part II):
Welcome back Autotask Warriors! It’s a beautiful day in the neighborhood and I am glad you are in it. (Won’t you be my neighbor?)
Quick highlights on what you’ll learn:
Why you should be “simply the best”
Contract 101: A Quick Primer
The 5 types of contracts
Visualize what you want to accomplish
Recurring Services contract template
General recommendations: setting up contracts
Need help? Here’s what to do
Productivity. Client satisfaction. Tech happiness. Profits.
Have you been seeing noticeable gains in several of those key areas at your MSP?
If you’ve been following along and implementing what we’ve discussed in our articles these past few months, I certainly hope so.
In other words, you should be, “simply the best.”
Unless, of course, I give you half of the puzzle and leave the rest in the “fog of war” for a couple weeks (sorry!). As a reminder, in Part 1, we reminisced about the late, great Tina Turner and covered Streamlining Labor Invoicing.
In Part II, we will be covering Recurring Service Contracts, including Licenses, Subscriptions, and HaaS. So, for Labor invoicing, please refer to Part 1.
Contract 101: A quick primer
To get you in the Contract mood, here is some Contract 101 info to make sure we are all on the same page:
When creating Autotask Contracts, what the Client wants, or what the MSP wants to provide the Client in their invoices, determines which one of three scenarios on a Client-by-Client basis needs to be considered:
One invoice per month for each Client, sent out in the first week of the month
With Recurring Services invoiced in advance
T&M labor/charges/milestones billing invoiced in arrears
Two summary invoices per month for each Client
Recurring Services rolled up into one line item and invoiced in advance around the 20th of the month, net 10 days, for next Month’s Managed Services
T&M labor/charges/milestones billing invoiced in arrears, the first week of the month** for last month’s time entries
Two detailed invoices per month for each Client
Recurring Services each with its own line item and invoiced in advance around the 20th of the month, net 10 days, for next Month’s Managed Services
T&M labor/charges/milestones billing invoiced in arrears, the first week of the month** for last month’s time entries
Note: Rule-Based Billing will always be option #3 and Recurring Services will be in a detailed format listing all the Users or Devices that the Client is being billed for.
As mentioned in Part 1:
When it comes to non-Labor Contracts, there are a few more things that need to be taken into consideration:
Licenses are for SaaS products such as Microsoft 365, Adobe Acrobat, and Defender.
Subscriptions are Hardware-based licenses such as Meraki, AV, Endpoint protection.
Subscriptions and Services are separate tabs in Approve and Post, and separate line items on the invoice.
It is confusing to the Client why one license shows up as a Service and another as a Subscription, so almost all MSPs invoice SaaS licenses and Hardware-based licenses as a service, which means they do not use any of the Subscription tracking modules.
Monitoring renewals is a pain in the butt as there is no widget or standard report that provides the tracking information for services (Licenses and Subscriptions) start and end dates. For this reason, most MSPs have a contract per license with the end date of the contract matched to the renewal date of the license or subscription.
If the Client would prefer one line item for all Managed Service licensing, then a single non-Labor contract is needed, and the MSP needs to rely on an Advanced Live Report to monitor renewal dates.
Most MSPs send out at least two invoices per month.
Recurring Services are invoiced in advance, somewhere in the middle of the month, for next month, and are due on the 1st of the month.
Labor is invoiced in arrears on the 1st of every month for last month.
There are a few MSPs that send one invoice per month, on the 1st of the month, with Recurring Services in advance and Labor in arrears.
The Five Types of Contracts
Now that we’ve figured out which invoicing scenario for each Client, we can actually build the Contracts. There are 5 types:
Recurring Services Contract – mostly used for Services (Licenses, Subscriptions, HaaS, etc.); can be used for the Default Service Desk contract for Managed Service Labor.
Time & Material Contract – mostly used for Labor Contracts when the Standard Role Rate needs to be adjusted.
Fixed Price Contract – mostly used for Project Work Type.
Block Hour Contract – mostly used for Labor that is limited in the Managed Service Agreements.
Retainer Contract – Very seldom used.
We then setup the non-Labor contract, using the following steps:
Thinking about what we are trying to accomplish
Creating a Recurring Services Contract template in the MSPs account (Zero Account) for each level of Managed Service Agreement
Verifying or setting up Configuration Items (Installed Assets) between the RMM and Autotask
Setting up or updating the Services Portfolio and adding to the proper Recurring Services Contract
Copying templates into a pilot group of Clients
Configuring Pax8 or Sherweb contract integrations for the pilot group
Setup Consumption billing for the pilot group
Approve and Post
Visualize what you are trying to accomplish
What does the Client on a Client-by-Client basis want to see on the invoice?
Based on the MSA, what information is needed to generate the invoice?
What services are needed to be added to Recurring Service Contracts?
What Configuration Items (Installed Assets) are needed to be added to Recurring Service Contracts?
Does Pax8 or Sherweb need to be integrated into Autotask?
Is Consumption (Rule-Based) Billing per User, per Device, or both part of the MSA and need to be considered in the contract build?
Create a Recurring Services Contract template in the MSP’s account (Zero Account) for each level of Managed Service Agreements
The reason we use Contract Templates is to make it easier for the MSP when it comes to creating contracts in the Client Accounts. By using Contract Templates, you can create Client facing contracts in 3-5 keystrokes.
The reason we use the MSPs (Zero) account, is that the account does not invoice based on the way the software is written; therefore it is a safe place to have the templates.
Once a template for each contract type (Recurring Services, T&M, Block Hour, Retainer, Fixed Price) has been created, then it is easy to use the copy wizard to copy them into a Cascading Contract Template set that is needed for:
Each level of Managed Service Agreement (MSA)
Most common combination of offerings in the MSA
Combinations of Labor, Services, Subscriptions, HaaS, etc.
Please note: when we are talking about Cascading Contract Templates, we mean a cascade of various combinations of contracts – not a single contract. The benefit of creating a Cascade of Contracts is that the copy wizard will copy the full cascade at once when the MSP moves the templates into Client-Facing accounts. A typical cascade is:
Recurring Service Labor Contract with any services that are to be rolled up into a single line item on the invoice
T&M labor contract(s) for excluded labor that is not billed at the Standard Role Rate adjusted by Work Type**
Block Hour limited labor contract(s)
Retainer labor contract(s)
Recurring Service Contracts for any services that are to be listed individually on the invoice***
Fixed Price Contracts ****
Notes:
** If the rate to be invoiced to the Client is at the Standard Role Rate adjusted by Work Type, then no contract is needed.
*** The benefit of having individual Recurring Service Contracts is that the end date of the contract can be set to match the license renewal date, and therefore monitored on the dashboards. When services are rolled up into a single line item on the invoice, it takes an Autotask Live Report to track renewal dates – See Matt A.
**** Fixed price contracts are not added to the Contract Templates because their stop and end date do not match the Recurring Services. In other words, Fixed Price contracts/projects come and go through out the life cycle of the Recurring Services contracts and are not generally known at the time of copying the contract templates into Client-Facing accounts.
Once the Contract Templates are set and in place ready to be copied into Client-Facing accounts, we are ready to verify that all the non-labor items (products and services) are in place and ready to be connected to the Client-Facing Contracts.
General Recommendations: Setting up Contracts
Using the right contract makes a world of difference in being able to properly capture costs and profitability, and in ensuring the Client receives invoices free of uncertainty and confusion that they will happily pay.
While no two MSPs are exactly the same, Advanced Global does have some general Recommendations for setting things up:
Two Summary Invoices per month
Licenses and Subscriptions on the 20th of the month in advanced
1 Recurring Service Contract
Pax 8 and/or Sherweb Licenses
Rule Base Billing
Per User
Per Device
Hardware and Labor the 1st of the month in arrears
Hardware Charges
Labor T&M or Fixed Price Contracts
Primary Contract (Items covered by MSA agreement)
Secondary Contracts (If not invoiced at the Standard Role Rate)
Of course, those are general recommendations. I’m very happy to have one of my MSP coaches do a free evaluation of your Autotask if you’d like recommendations tailored to your MSP and your Clients.
Go through Part I and Part II a couple of times and I think you’ll see it starting to make sense. If it is Clear as Mud, shoot us an email at Info@AGMSPCoaching.com with the word “HELP” in the subject line, and we will do our best to get you unstuck. Or attend our free weekly “Ask the Experts” Webex for any help you may need (See AGMSPCoaching.com for meeting times/links).
I believe Advanced Global is the best in Autotask Service Delivery coaching. I know you only want the best Autotask setup, so let’s be neighbors.
The elephant in the room:
Who is Advanced Global, and why should we listen to them?
Recently someone we’ve been in communication with since DattoCon 2018, who was faithfully reading our articles, commented that up until a few months ago, “I really did not know what Advanced Global does.” So here are a few bullet points to let anyone interested know who we are and what we do:
We Are – the Autotask Global Service Delivery Authority
We Help – MSPs thrive
We Solve – Service Delivery issues, inefficiencies, and challenges by making sure:
techs know what to work on next
someone is managing all open tickets and driving them to completion
the staffing levels are correct, and the workload is balanced
Real-Time Time Entry is a cultural habit
the Client has a great client experience
profit is maximized
Autotask is being fully leveraged
the historical data that is in the Autotask software is accessible to benchmark, track & USE effectively
the Service Delivery operations can scale
projects are completed On-Time and On-Budget
the company can grow
MSPs know what they don’t know
Our Tools:
Autotask “Best in Class” standard build
Our MSP robust Service Delivery SOP library
Advanced Live Reports
Expertise in providing a transformational experience
Note: We are not philosophers; we are doers with 31+ years of Service Delivery experience, bringing real Service Delivery Improvement change, profitability, and Best in Class performance.
We start our engagements by offering a FREE No-Obligation PSA Configuration Evaluation
