Understanding your numbers: How to record and report on chargeable time.

In today’s competitive business environment, it’s essential to have a system for tracking and recording how your employees manage their workloads.

It’s especially important for creative, digital and PR agencies that really need to get project after project out the door as efficiently as possible without compromising on quality.

But what are the best ways to record your chargeable time? And what can you do with it? Don’t worry: in this article, we explain everything you need to know.

Why controlling time is essential

Let’s begin by clearing something up: you might think tracking time is a waste of time because you charge a fixed fee, either on a project-by-project basis, monthly or however else.

If time tracking was just about knowing how much to charge your clients because you bill hourly, you would be right, but recording your hours does more than that — it records the cost of what you’re doing.

Think about it: once your fee is fixed, there’s only one variable that can affect whether you make a decent profit out of a job, which is the operational cost of completing the job.

Now, your costs per project could be down for various reasons, but you first need to see where your firm isn’t working as efficiently as you would like. That’s where time tracking comes in — it sheds a light on where the bottlenecks are so that you can go away and figure out why they’re there and how you’re going to remove them (more on this later!).

From there, you can use time tracking to plan for future work in a cost-effective way by allocating resources correctly and ensuring everyone is fully engaged from the outset.

However, there are other (and often overlooked) benefits of time recording, including, but not limited to:

  • It helps staff feel important. By recording your team’s time and analysing their contribution to the business in terms of costs and profit, you can empower each member.
  • Quick and accurate reporting. With everyone recording their hours on the go, you can ensure your entire team is charging all of their hours — essential in a working-from-home environment.
  • Improves relationships with clients. By having a record of how your team spent every hour on a project, you can demonstrate that they’re getting value for their money.
  • Higher fees. If you know you need to charge your clients extra for the same end-product, a record of your time could be what you need to get your clients to swallow the bitter pill.

Recording your time

Now we’re onto the meat of the topic: how to track your time.
By far, the easiest and most efficient way to track your time is with technology, which comes in various forms, from standalone apps to project management software.

No matter the exact digital tool you use, the logic is the same: by assigning a team member to a specific project or task and getting them to hit ‘go’ on the stopwatch, they can record the amount of time it took them to complete it.

You’ll then be able to categorise tasks and compare them to the time of other team members to find out the average time it takes to complete certain pieces of work.

However, the weakness with tracking technology — or rather, time tracking as a whole — is that it requires your staff to participate in the exercise if you want to get useful data.

Therefore, you need to encourage and foster a culture of recording chargeable time. To do that, you need to be clear about why you’re asking staff to record their time and be clear that this is about helping them help the business — not a competition or a practice in micromanagement.

Analysing the data

Okay, great — you have some numbers to compare to each other, but what might they show? What can you do with them?

Well, your data will reveal the variable that determines whether a project with a fixed fee is profitable — your operational costs. Quite simply, the more time you throw at a project, the more money you’re paying your staff to complete it. So, look at your data and ask yourself: are these tasks being done in a reasonable amount of time?

Unfortunately, if something is taking longer than you like, the data won’t be able to tell you why. Only an analysis with your team will be able to. So, gather everyone round and explore together where things are going wrong. Usually, it’s down to:

  • Staff aren’t as motivated as you’d like
  • Staff aren’t trained well enough for the tasks at hand
  • Some clients have complicated needs
  • Some clients are just difficult to work with
  • Technological problems (anything from a poor internet connection to system crashes)
  • Supply chain issues that delay the delivery of items critical to a project’s delivery.

Next, you can think about solutions to the problems you as a team face, helping your business use all the time available to it as effectively as possible.

Need an outside opinion on your business’s efficiency? We’d be happy to chat, so don’t hesitate to get in touch with us.

Other posts you might like:

Accounting for fixed costs

Accounting for fixed costs

In business finance, accounting for fixed costs is guaranteed. We unravel the significance of understanding and managing these unyielding financial elements.

read more

Speak to our team

Let's diagnose the problem
& get you back on track

If you’re working late, aren’t sure what your numbers are doing, or know you’re burying your head in the sand but aren’t sure how to stop - get in touch.