Inadequate billing software is a significant business liability. Invariably it reduces revenues while increasing overhead. Skilled employees are involved in tasks that are best automated. Its limitations can also affect perception of your business, because faults are apparent to an observant client, from poor invoice design and limited data to inaccurate or delayed billing. Some elements of a good billing system are obvious, others less so.

Billing software must allow you to oblige a client's demands without this affecting your operations, and it must accurately reflect your agreements with these clients. Anything less handicaps your representatives in their negotiations. Can the system automate every last invoice or debit? Off-system billing is time consuming and often inaccurate. Look for rule-based computation, and demand early on that the vendor provide proof of performance on tough fee schedules. Given this accuracy, can the system also meet your other needs without expensive customization? Only a full demonstration, function by function, can answer these questions.

Accurate computation and robust functionality are the foundation, but for the system to be complete you may also need Accounts Receivable, Accruals, Management Reporting and Fee Modeling/Analysis. Implementation is faster and less costly if these modules or interfaces to best-of-breed vendor products are already available.

Growth of your business may result in your acquiring or merging with another company, or adding new products, and your office may well be reorganized in the process. The software must be designed to adapt to this without core code changes. Business practice, too, has evolved rapidly since the early nineties, and next year's needs may be different. Can change and growth be easily accommodated, or will you need expensive enhancements?

Finally, large institutions need headroom for growth. Scalability is required when mergers can result in databases ranging into six figures, and only modern architecture will allow you to process numbers on this order reliably and economically. Ask about existing installations.

Implementation is worth considering as well. Problems here can create runaway costs, both in direct charges and in the expense of delay. Look for a standardized install procedure - ad hoc implementations are expensive and tend to be unique, hard to maintain. If the vendor is willing to cap both cost and timeframe, this suggests reliable procedures.

A history of substantive upgrades indicates what can realistically be expected over time. Upgrades become more and more important in keeping up with changes in your business. Will you get these? Will you have to pay for them? Or will you need to customize? The history of the software will reveal company policy.

Finally, the ongoing existence of a user group is a strong plus. How long has the group existed? Are relations of group and vendor good? Who is driving the upgrades - users or software gurus following their own inclinations?

Does the vendor have a fully developed product, or are you being offered the rudiments of a system - basic code plus consulting services? Is the vendor committed to the system, or is it one of a variety of systems and services that could be phased out? How long have they been in this market? Are you guaranteed access to current code via escrow? Is it standard code, easily accessible to your technical department in a worst case scenario?

What is the company history? Industry acceptance suggests stability. If a private company, ask for financials. If public, it can be evaluated through public record. What is the history of its market position? Are the disclaimers at odds with the marketing materials. How big is the install base? Do a good number of the users share your specific needs? Are there plenty of credible references.

It is a commonplace that a good billing system pays for itself quickly. Have users found hidden costs over time, such as those created by delays, limited upgrades, expensive customizations and custom reports? If existing users find the software satisfactory in these terms, the business case is strong; if queries indicate otherwise, there is legitimate room for concern.