Professional Services Automation Software 101: What it Is, Why it Matters, and Best Tools

What is professional services automation?

Professional services automation (PSA) means using software to speed up, centralize, and manage all aspects of a service business’s operations. 

This approach is used by:

• Agencies (marketing, creative, advertising, design, etc.)
• Consultancies
• Software development and IT companies
• Architecture and engineering firms
• Event planners 
• Legal firms

Imagine a consulting firm with multiple concurrent projects, each with its own team of consultants, deadlines, and budget.

Without PSA, managing these projects would involve a lot of manual work, such as:

• Tracking time and expenses: Consultants would need to manually log their hours and expenses for each project
• Managing resources: The firm would need to track the availability of consultants and allocate them to projects manually
• Billing and invoicing: The firm would need to generate invoices for each project manually
• Project management: Project managers would need to track the progress of each project and ensure that it is on track to meet its deadlines

But what if there was a better way?

Enter professional services automation software.

What is PSA software?

PSA software lets you manage all your different business functions in one convenient platform. 

This includes:

• Project management
• Resource planning
• Quoting and budgeting
• Time tracking
• Invoicing
• Reporting
• Cost management

With this kind of all-in-one solution, you can:

• Streamline operations: From project initiation to invoicing, everything is centralized and efficient
• Reduce admin tasks: Free up valuable time for billable work
• Gain real-time insights: Make informed decisions based on up-to-the-minute data

For example, Scoro is a complete all-in-one PSA tool built for consultancies, agencies, and other professional service businesses.

Scoro’s “CEO/COO” dashboard gives you real-time data on sales, projects, and financial performance, providing a comprehensive overview of your business:

The benefits of using PSA software

PSA software offers a lot of different business advantages. 

With all of your data in one place, you get more visibility into your business. This visibility provides several benefits, namely:

Improved profitability 

With real-time, centralized views of your most important business metrics in PSA software, you can quickly spot any red flags affecting your margins. And take action to get back on track—and stay there.

Political comms agency Cosmonauts & Kings switched to Scoro to do just that. With four separate tools in their original tech stack, COO Izabela Wisniewska notes, “the disconnect between internal costs, external providers, and revenues made many issues invisible and unreportable.”

With Scoro, the Cosmonauts team centralized all their business processes and data and automated their reporting. So, they gained a much clearer insight into areas like billable utilization, time tracking, and billing, helping them spot costly issues like overservicing and extra external costs right away.

Understanding how their staff and money are used in real time lets them make proactive changes to protect their margins.

Greater efficiency 

When you and your team spend less time switching between tools, looking for updated data, and moving information and files from one place to another, your schedules are freed up for more critical (and often billable) work.

And the faster your team can get the project info and resources they need, the faster they can deliver on-point work. Which keeps clients happy while keeping your labor costs down. 

Consultancy Ad Esse realized this firsthand. Before switching to Scoro, the business spent hours each week using several tools and spreadsheets to track everything from project progress to finances.

Now, with Scoro’s end-to-end solution in place, the company saves over 10 hours each week. And, as Director Rhiannon Gibbs notes, the team can now see “the full picture” of its operations:

More data-driven decisions

When you have clear data, you can make confident, clear decisions. 

But if your business data is tracked in different tools—or worse, not tracked at all—you and your team will struggle to spot issues, inefficiencies, and areas for improvement, which will make it that much harder to maintain a sustainable business. 

With PSA software, you gain real-time knowledge to help you throughout all parts of the project lifecycle.

For example, Matt Stevenson Dodd, Trust Impact Managing Director, found that using Scoro to monitor project progress and performance in real-time “really helped us understand how we use our resources and their availability. We especially like the budget part of the project view to keep track of where we stand financially … Having a central system like Scoro is really essential for that to work.”

PSA tools vs project management tools

Project management software isn’t the same as PSA software. 

• Project management software: Solely focuses on helping users track and manage individual projects, covering areas like task management, resource allocation, project budgets, and project planning. 
• PSA software: Covers way more than project management. It lets you stay on top of all project-related business functions in one spot, from sales and invoicing to time tracking. And because of its comprehensive nature, PSA software tends to offer more integrations with key apps and tools. So, you can keep work streamlined.

Project management software can be great for small teams or managing one-off projects.

But as your business grows and you start juggling more projects and clients, a PSA tool will help you stay on top of all your work, keep your portfolio profitable, and align that work with larger business goals.

7 ways to use a PSA tool 

Once you switch to a PSA and have a single source of truth, you can streamline many business areas. You’ll experience fewer errors across time logging and invoicing, less manual data entry, and more efficient processes. 

Here’s what this looks like in day-to-day work:

1. Seamless data centralization 

One of the biggest benefits of PSA software is the ability to connect all of your tools in one place. So, you can automate more workflows and keep everyone on the same page. 

You’ll also reduce errors caused by duplicate data (or missing data between tools) and time spent on manual data entry.

And overall, you’ll get a more holistic view of the customer journey and your business’ health and growth. 

Let’s look at an example digital marketing agency.

This agency uses the following tools: 

• Hubspot for CRM 
• Monday.com for project management 
• Xero for accounting 
• Quickbooks for invoicing and billing 
• Toggl Track for time tracking 

This tech stack opens the door to disorganization, like expenses being added to Xero while project estimates, quotes, and sales data are stored in Hubspot. 

The result?

No one clearly sees how current costs and expenses affect the overall project budget compared to the original cost estimate, leading to overspending. 

Now, imagine this agency switches to PSA software. 

Their expenses, project estimates, sales data, and project progress are all in one place. Everyone from project managers to sales team members can see what the project quote and budget is, how much has been spent so far, and how far along the project is. 

This makes it much easier to catch potential overruns early and switch up staffing, project timelines, or scope to avoid overspending. 

Scoro makes it easy to create this seamless view, offering over 45 integrations with popular business tools for productivity, accounting, payments, marketing, sales, file management, HR, business intelligence, and customer support. 

Just go to “Settings” → “Site panel” → “Integrations” to turn on any integration you need. 

2. Streamlined project management

With a basic project management tool, teams can track individual project progress, tasks, and deadlines.

But it’s impossible to track everything (including finances) related to projects in such a simple platform.

This usually results in disorganized processes, overservicing (which leads to lowered profitability), and more draining admin work for you and your team. 

To remedy this, PSA software gives you control over every aspect of the project management process.

Manage your project progress, tasks, budgets, milestones, resource utilization, and reports in one central location.

This end-to-end visibility helps you prevent bottlenecks, avoid delays and overservicing, and improve profitability across your entire project portfolio.

Case in point:

After using features like Scoro’s real-time Project list view, global professional services agency Significans Automation was able to:

• Improve its business processes by 80% 
• Boost team productivity and collaboration by 70%

In the “Project list,” quickly review due dates and how your projects are doing by looking at the “Progress” bar.

Blue fill shows how much is finished, yellow fill shows how much work is left, and red fill shows any overscheduled work. 

Use the “Data columns” checkbox to add additional metrics, such as financial data and billable hours.

Just click “View” > “Data columns.” 

To examine a project’s progress and data in more detail, click its name to open the “Project view.”

The “Project view” shows you all aspects of your project—tasks, budget, time, bookings, finances, and more—in one central hub.

3. Accurate time tracking

Inaccurate or manual time tracking often leads to missed billable hours, billing errors, and lost revenue.

It also makes it difficult to estimate how long work will take, which can lead to overtime and burnout when things go longer than expected. 

PSA software automates time tracking and billable hours calculations, reducing costly errors while making the process easier on you. 

Take it from former Bombs Away Project Manager Tycho Derks.

Derks explains that the consultancy didn’t have a standardized way to track time or manage projects. And as a result, employees were often “overwhelmed and working overtime.” 

By using Scoro, the company was able to change that.

In Scoro, time tracking is as simple as clicking a button.

From any view, click the stopwatch icon in the nav bar to open the time tracker. Then, click or type in the task you’re working on. And click the “play” icon to start tracking. 

Scoro also lets you define which activities are billable or non-billable. So, all time entries can be easily (and accurately) categorized for billing and invoicing. 

Go to “Settings” → “Work and projects” → “Activity Types.”

Then, set up activity groups for both “Billable” and “Non-billable” work. And add in the different activity types that fall under each category. 

4. Clear project pipeline management 

PSA software lets you and your sales team see the entire project pipeline—which is populated with real-time data from both departments. 

Without this visibility, it’s harder for both teams to work together and make the best decisions for the business.

For example, if sales can’t see project data or staff availability, they can unintentionally overload the queue with work that’s beyond your team’s capacity or skill levels. Or miss opportunities to bring in revenue when your team has more bandwidth.

And if you don’t know what’s going on with sales, it’s difficult to accurately forecast your resource needs and timelines. Which leads to project delays, overutilization, and an unhappy team and clients.

A PSA platform’s “Pipeline” view, like Scoro’s, clearly shows all prospective projects.

Here, all current leads and quotes are sorted by different pipeline phases.

So, you know when you should check in with sales or the prospect to move things along. And can get a head start on booking time on the calendars for confirmed projects.

Then, turn to the “Revenue report” for detailed revenue forecasting. 

The “Revenue report” provides a real-time overview of your business’s revenue based on quotes and projects, allowing you to track how much you’ve earned, are guaranteed to earn, and potentially could earn.

With this report, you can ensure that there is enough work in the pipeline to meet your revenue targets and sustainably grow the business.

5. Balanced resource management

PSA software gives you clear visibility into your team’s schedules and utilization rates. This helps you avoid dozens of problems from ineffective resource allocations, including: 

• Overwhelmed and burnt-out employees
• Project bottlenecks 
• Missed deadlines or delays 
• Reduced client trust
• Low billable hours 
• Reduced profits and higher labor costs 

Pretend you work on a software development team.

If you don’t have a way to objectively see how much work everyone has on their plates, you could easily find yourself piling more work on senior developers out of habit.

Which can backfire—they’re more likely to deliver lower-quality deliverables when they’re stressed and trying to rush through unmanageable workloads. 

Your margins will also also be affected from using more senior employees with higher labor costs than less expensive, junior developers who could’ve probably taken on some of that work. And you’ve missed opportunities to develop their skill sets in-house, reducing the need for outsourcing.

Eliminate these issues with resource planning features in PSA software like Scoro.

For example, when planning a project, use Scoro’s “tentative” bookings feature to confirm availability first. 

Go to the “Project” view. Then, click the “Bookings” tab. 

On the left-hand sidebar, you can see team members and project phases or deliverables, then drag and drop over their calendar to tentatively book time (shown with striped backgrounds). 

This will then automatically update their capacity (shown with a green background), so you can easily see if this work will over-schedule them.

If everything looks good, change the “tentative” booking to a “fixed” booking (solid background) to reserve that time on their calendar. 

Once you have your team assembled for the project, head to the “Planner” to assign tasks.

Here, you’ll see all unassigned tasks on the left. Each team member’s schedule is on the right, along with their utilization rates and remaining availability (as listed under their profile picture). 

You can drag and drop tasks to a team member’s calendar to immediately see the impact on their utilization rates. For individual contributors mostly focusing on client work, you want to aim for 70-80% billable utilization. 

If it turns out a team member you wanted to work on the project can’t feasibly handle it, find the right fit by clicking “User tags” and selecting the skills needed for the task.

Then, you’ll only see staff with those skills in your view. And can quickly determine who to assign the work to.

6. Better financial management

Without PSA software, expenses are usually tracked in spreadsheets or accounting software. But they may or may not be tied to specific projects or clients. And are often plagued with outdated and late entries.

Worse, invoicing and revenue tracking usually happen somewhere else entirely. 

This lack of real-time organization leads to:

• Uncertainty on how much of the project budget has actually been spent
• Budget overruns
• Frustrated clients 
• Delayed invoicing
• Unclear revenue forecasting
• Missed profit margin targets

PSA software solves these problems. It tracks expenses, revenue, and other financial metrics in one place.

Team members can quickly add and tag different expenses to projects and clients as projects progress, reducing admin work for your accounting team and keeping cost management simple. 

Since you know your exact costs and revenue for the project at all times, it’s easier to make smart decisions. 

Scoro’s financial reports make it simple to monitor project costs, revenue, and overall financial performance at any time. 

Use the dropdown menu to select an input for the report, such as “Invoices in period” or “Bills.” 

Then, click “Filter” and select the relevant filters based on the data you want to view. 

For example, you might want to see all invoices in a certain period for a certain client (use the “Client” filter). Or you may want to see all bills associated with a certain client or project (use the “Client” or “Projects” filters). 

This allows you to drill down into the exact financial details you need to make smart decisions about pricing, project spending, and profit targets.

7. Faster reporting and data analysis 

Access to real-time data is great. But the greater benefit comes from being able to translate those figures to actionable insights.

With PSA software, you can create custom dashboards to automatically view reports and insights to help you figure out practical next steps. 

For example, a consulting firm might have lots of data on billable hours, revenue earned, and tasks completed.

But it doesn’t have an easy way to understand billable utilization or what tasks take up the most time. 

With PSA software, the company could create a custom report that automatically compiles, updates, and organizes data into actionable insights.

This way, their team spends less time putting together manual reports. And has more time available to analyze the data and apply it to help the business perform better.

For example, Scoro’s “Utilization report” shows how much time your team spends on billable vs. non-billable tasks, allowing you to see your billable utilization at a glance.

So, you can easily figure out where your team’s time is going and decide what steps you need to take to make the most of it.

For a more comprehensive look at all your key data points, create a custom dashboard. 

Add new widgets to your dashboard to highlight what matters to you. Click “Add to dashboard,” then choose how you want the data displayed (i.e., as a result, ratio, chart, or with the raw data, i.e. “Widget”).

Then, pick one of the categories. And choose a metric you want to appear on the dashboard. 

After you repeat this process for all the data you want to track, check your dashboard at any time for a real-time look at how your projects and company are performing. And use that knowledge to make informed choices that support your business’ financial health and growth. 

Try PSA software for free

Professional services automation software gives your team the ability to manage everything seamlessly in one spot.

And if you think Scoro’s PSA software is the right fit for your business, you’re far from alone! We’ve helped hundreds of professional services businesses around the world transform their operations.

For example, Trust Impact, a UK-based consultancy, switched to Scoro because it had unparalleled end-to-end capabilities. We’ve also served creative agencies, software development firms, financial advisory firms, and construction companies, helping them centralize key activities and grow their business. 

Try our free 14-day trial today and see how our powerful PSA software can work for your team.