Back 2 Basics: ServiceTitan Accounting Features Revisited

Accounting terminology: Building a foundation on the basics

1. What is auto-batching? 

“This is our new automated process for batching invoices, payments, things like that,” Montgomery says. “Ultimately, I'm just grouping like items together, such as all of my invoices for that day or my payments with payments.

“There is a manual process for batching, but honestly, auto-batching is going to make it a lot simpler, a lot more streamlined. You basically just tell us how you want your groups to be batched, and we do that for you automatically,” she adds.

2. What is pending status?

A transaction labeled as pending means the invoice hasn’t been reviewed, approved, or exported to your accounting system. 

“If it's not posted or exported, you'll see it in a pending status. Even if it's in a batch, you might see it as pending,” Montgomery says. “That means I haven’t given this invoice my stamp of approval and posted that batch just yet.”

3. What is posted status?

Once you approve an invoice, it can be posted as part of a batch.

“Posting means, I've looked at these invoices, everything within this group is good to go. I can now post that batch, which means locking it up so I'm not making any other changes to it,” Montgomery says.

“But if I need to make a change to something that's in the posted batch, I can un-post and remove that item or make the edit, and then post it back if I need to. This is still a reversible step,” she adds.

4. What is exported status?

When invoices are batched and posted, they’re ready to be exported to your accounting system.

The batch-post-export process is like preparing an envelope to mail, Montgomery says. Batching represents the content of the envelope, posting means you’ve sealed and put a stamp on it, and exporting shows when the mail carrier picked it up.

Accounting terminology: The Transaction Hub

When utilizing accounting features within the ServiceTitan Transaction Hub, it’s important to understand key terminology frequently used here.

5. What is invoice review status?

The invoice review status shows all invoices for a set period of time and classifies them by:

• Needs review

• On hold

• Reviewed

“I can put invoices into different buckets based on whether they’re ready to be posted and exported or if they need additional review,” Montgomery says. 

Invoice items default to the “needs review” status when they enter the Transaction Hub. You can change an invoice to “on-hold” if you need to review it again or if somebody else needs to look at it or approve it. Once it’s been reviewed and it’s good to go, move it to the “reviewed status.”

6. What is invoice sent status?

The invoice “sent” status means the invoice has been sent to the customer by email, and “not sent” means it hasn’t been. Once the customer opens the email and clicks the invoice link, the invoice status moves to “sent (opened).”

7. What is invoice paid status?

The invoice “paid” status shows whether the customer settled their bill. The four categories for “paid” status are:

• Overdue

• Unpaid

• Partially paid

• Paid

8. What are bank deposits?

The bank deposit feature groups payments into one deposit and provides a visual comparison within the Transaction Hub, Montgomery says. 

“You can take your payments and group them to your daily bank deposits, and you can compare that visually to what your actual bank deposits are going to be for that day,” she explains.

9. What are adjustment invoices?

An adjustment invoice allows you to change an invoice after it’s been exported.

“Some common scenarios where you're going to use adjustment invoices are for things like warranties, interdepartmental billing, or refunds,” Montgomery says. “And if you have your automated refunds workflow set up, and you're selecting the appropriate refund purposes, you can take the manual part of adjustment invoices out of it because it will create some of those adjustment invoices for you.”

How invoicing works, from start to finish

The invoicing process starts as soon as you create a job inside the ServiceTitan dashboard. From there, you build the invoice by adding items manually or converting items automatically from a sold estimate.

Once you’ve built the invoice, you can audit it to confirm all materials used and actions taken. Montgomery says ServiceTitan provides a nice checklist to follow, such as verifying:

• All equipment used on the job is added to the invoice

• Invoice is emailed to customer

• Any deposits are applied

• Payments made are applied

• Purchase orders (POs) are attached

Some other important items to check for include:

• Membership activation: If adding membership to an invoice, make sure the membership activates

• Correct business units: If attaching POs to the invoice, make sure POs are linked to the correct business unit

• Invoice summary: Include an invoice summary to capture relevant information

After verifying items on the audit checklist, it’s time to determine whether anything is missing or incorrect. Are there any immediate issues with the invoice?

If you see no issues, mark it as “reviewed.” If issues need to be resolved, you can put the invoice “on hold” and either assign it to yourself to address later or assign it to the person in your company who needs to review it and make the necessary changes.

“If I put it on hold, it's not going to prevent it from exporting,” Montgomery says. “This is a visual cue for you to go in and review those invoices, but you can assign it to someone else to review and put it on hold, or you can just assign it to yourself as an indicator of, ‘I need to go back and take another look at this, and figure out what happened.’ Once you've made those adjustments, then you can go ahead and mark it as reviewed.”

Posting invoices, again, means they’ve been reviewed, there are no issues left to resolve, and the batch is ready to post.

“If I have an invoice on hold, and this is not an issue that's going to be resolved today, but I don't want to hold up my other invoices, if I un-post the batch, remove that invoice, and then post the batch, it's now keeping it from going back into that batch,” Montgomery says. “Auto-batching will refresh every two minutes to keep pulling those invoices back into your groups. So, that’s something to keep in mind with the posting process.”

Exporting invoices permanently locks all items within the batch and sends the invoice batch to your accounting system like QuickBooks or Intacct.

Double-check role permissions

Determine who’s responsible for reviewing your company’s invoices, then check to ensure they receive the right permissions to perform the review. Invoice reviewers can be owners, dispatchers, bookkeepers, CSRs, accountants, or other admin staff.

“Look at their permissions, and really understand what they need to be seeing, what they need to be doing, and what they need the permissions to be able to do,” Montgomery advises, adding how role permissions can be set individually for each employee.

In the Transaction Hub permissions, click the boxes in the right-hand column for “Review Invoice” and “Assign Invoice.”

“Those two are going to be pretty important to your processes,” Montgomery says.

Role permissions can also be granted for issuing refunds, collecting payments, or creating adjustment invoices. 

“It’s always a good time to go back and just assess who needs to do what and why,” she adds.

This is also where you can make an invoice summary field required for technicians, based on the job type, company role, or individual technician.

Payment terms

Recent updates to the Transaction Hub allow users to set different payment terms. “Make sure, before everything is done and closed out, the proper payment terms are set. That way, it's factoring in all the information correctly,” Montgomery says.

Another cool feature for payment terms allows you to charge interest in bulk if you charge late fees for overdue payments.

Auto-batching

To find the auto-batching tab inside ServiceTitan, search for “Journal Entry & Auto-Batching Configuration.” 

“If you don't see this one for export type or auto-export, don't worry, eventually you will,” Montgomery says. “This is going to be a part of our update, giving you the ability to use those when it comes to journal entries, and then going into our auto-export, which will be a part of our touchless experience for exporting.” 

Here, you can set your preferences for auto-batching all of your transactions, including invoices, payments, vendor bills, and vendor payments. You’ll choose the export type and batch cadence, and you can filter by business unit or payment type.

“Best practice is to really do this on a daily basis. Batching, posting, and exporting should be a regular process for you,” Montgomery says. “I would not go longer than a week between batching, posting, and exporting, because it just becomes a lot to go through. 

“If I've got to go and dig back through this massive batch to find one thing, it's going to be a lot more effort. Whereas, if I've got it broken up nicely where it makes sense, it's a little bit easier to navigate through those batches,” she explains. “I set all of mine to batch on a daily basis.”

Transaction Hub

The Transaction Hub stores all of your invoices, customer payments, bank deposits, and other accounting information. You can customize this screen to show only the columns of information you find most important, then filter the data to find what you need.

For example, it’s critical for businesses to know the “paid status” of their invoices as well as the “sent” status, Montgomery says.

You can click into any invoice to review it, make adjustments, attach a PO, see the status, and more. 

“What I need to see might be different from somebody else in my office and what they need to see,” Montgomery says. “So you can change this on an individual basis.”

When you click into an invoice, a pop-out window appears with invoice details, including its “paid status.”

Paid statuses include:

• Paid

• Not paid

• Partially paid

• Overdue

“If I have overdue invoices, I can select them, go to my actions, and this is where I would use my payment terms to be able to charge them interest,” Montgomery says. “After applying interest, the system automatically creates that adjustment invoice and links it to the original invoice.” 

Once all issues are resolved and all invoices marked as reviewed, you’re ready to post the batched invoices. The status switches from pending to posted, and you’re now ready to export.

Accounting features coming soon

New features for accounting coming soon include:

• Touchless accounting

• Accounting periods 

• Journal entries

• Accounting audit trails

• SMS invoice links

“These features streamline your processes and make the accounting process less manual,” Montgomery says. “I'm not going to be manually posting batches and exporting them. I can now tell ServiceTitan how I want that done, and it's going to do that.”