When running an agency, effective time management is crucial for maximising productivity and profitability. Two important aspects of this are called ‘time written off’ and ‘time recovered’. It’s essential to understand these to create a better time management system.
In this blog post, we will dive into the significance of these concepts to help you make informed decisions and optimise your operations.
Understanding time written off
Time written off may be a new term to you, so let’s begin by exploring what it is and what it means.
To do that, let’s consider an example where you agree to do a job for a set fee of £5,000. If the total time booked by employees for the job amounts to £7,000, the company will have overspent £2,000 on the account. In effect, the extra, unpaid time has been ‘written off’.
That’s what we mean by time written off. It could occur for a multitude of reasons, but usually happens because of one of three:
- Inaccurate estimations: If initial estimates for a project are too optimistic or fail to account for potential complications, employees may end up spending more time on it than anticipated. This can result in higher amounts of time written off.
- Scope creep: When clients requirements expand beyond the originally agreed scope of work, employees may need to invest additional time to meet the new demands.
- Learning curve: In industries where employees work on diverse projects, there may be a learning curve associated with new clients or tasks. During this phase, employees may need more time to familiarise themselves with specific requirements, resulting in higher time written off.
Consistently writing off time and completing non billable work has obvious drawbacks for the long term vitality of your business. It can also lead to employee burnout as they realise some of their work isn’t benefiting the business or cause them to push themselves too hard when the next project comes around.
Thus, being aware of time written off and developing methods to reduce it is essential.
Time recovered: reducing time written off
In contrast to time written off, time recovered is all about working more efficiently to reduce the amount of non billable time.
Non billable work has its uses — to persuade a reluctant client to stay with you or as a ‘thank you’ for loyal ones. But ultimately, you don’t want to overspend too much and too often.
There are many things you can do to recover your time, some of which deserve their own blog post entirely. In the meantime, make sure you’re aware of the following tactics:
Make sure to evaluate your existing workflows and identify areas that can be streamlined. Eliminate unnecessary steps, automate repetitive tasks, and leverage technology to improve efficiency.
This will allow your team to work more efficiently — and it’s a simple way to reduce time lost.
Effective project planning
You should also invest time in project planning to identify potential challenges and allocate resources appropriately.
Clearly define project scopes, deliverables, and milestones to minimise scope creep and avoid unexpected time write-offs.
Training and skill development
Employees should be provided with training opportunities to enhance their skills and knowledge. Well-trained staff can complete tasks more efficiently, reducing the time required and increasing billable hours.
Communication and collaboration
Foster open communication and collaboration among team members. Encourage regular project updates, knowledge sharing, and feedback loops to ensure everyone is aligned and working towards common goals.
Effective communication reduces misunderstandings and avoids rework, saving time and improving billable hours.
Time tracking and analysis
Finally, always make sure that you’re recording and reporting chargeable time as this is the most useful way to reduce time written off. It means implementing robust time tracking systems to monitor and analyse employee productivity.
Regularly review the data to identify patterns, bottlenecks, and opportunities for improvement, too. This information can guide resource allocation and process enhancements.
Get in touch with us
If you want to learn more about reducing the amount of time written off your business accrues, don’t hesitate to get in touch with us.
As accountants for agencies, we understand how easy it is for scope to creep in and to spend too long on a project. It’s something that clients often struggle with and a problem we’ve helped them solve. We’re here to help you, too.
So, get in contact with one of the team; we can’t wait to hear from you.