How Time Tracking Will Help Your Bottom Line
You can’t improve what you don’t measure.
Do you remember the first job you had where you had to track your time down to the minute? It could have been a waiter position in a restaurant or maybe it was an overeager manager at an office job. When your work is closely compared to the clock, each minute must be used well! Nobody needs a micromanaging boss, but if you aren’t tracking your employees’ time you are missing out on an essential metric.
Tracking time is never fun, but it’s something I highly recommend all service based companies do. You know, like those other annoying habits that we know are good for us but are well...annoying. So just like flossing your teeth or going to the gym, the best way to motivate yourself is to understand WHY it’s important.
So why should I track time?
If you’re a service based company, the measurement of time is critical to your company’s metrics. It all comes down to profitability. Even if you bill on a project basis or even do value-based billing, if you don’t track your time, there’s just no way you can determine whether you’re profitable on each project/client.
Think about it. What if there are certain types of projects on which you always lose money? That’s important to know! If you’re relying on your best guess about how the workload shakes out, you may not see those red flags clearly. Have your team track their time and you won’t miss out on that valuable knowledge. You can say no to projects that are money pits or increase the time you quote a client. Either way, you’ll be armed with the information you need to move forward well.
Which time tracking tools should I use?
As with any new process, it’s important to set out clear expectations for your team regarding how to track time. Start by identifying how you’ll track time. Use a standalone tool, like Harvest or Timely, or see if the apps you already use have a tracking feature. Just keep in mind you’ll want the ability to create and track projects. Once you’ve narrowed in, introduce it to the team.
Getting the team onboard from the start is imperative to this process. If they don’t see the value of tracking time, they’ll be more likely to slack off or forget to submit their hours. Don’t add “Send Weekly Reminders” to your checklist! Follow these tips to ensure a smooth launch to time tracking:
Be transparent - Explain how time tracking affects projects, proposals, and each part of your business. Take your time and be open with the team.
Assure your employees that you trust them - It can feel like they are suddenly under a microscope, so you should remind them you value and trust their work.
Be specific - Companies approach this in different ways. Establish up front if you want employees to round to the nearest quarter hour or just track their minutes in real time. Also clarify the deadline for submitting hours; each day? Each week? Regardless, be specific.
Allow for questions - Set up an introductory period of a week to allow employees to get used to the new system. Encourage them to reach out with questions. Respond with empathy while maintaining the importance of the system.
These tips can be used when implementing time tracking for the first time or when onboarding a new team member.
Happy tracking!
Hours spent affect plenty of important metrics such as utilization rate, average bill rate, and more. Remember that these metrics will give you insights into the different levers you can pull to steer your company in the right direction. Collecting the data may feel like wasted time, but once you have the ability to forecast accurately you’ll be set up to crush it for years to come! 🤓📈
