In the dynamic world of business, every second counts.
It's how you bill your clients, how you plan your resources, and how you evaluate the success of a project. So, when time tracking goes awry, chaos ensues.
Consequences of Inaccurate Time Tracking
Inaccurate time tracking can have serious consequences. While it may seem like a harmless oversight, the consequences of inaccurate time tracking can ripple through your business and cause a whole host of headaches. Let's take a closer look at some of the repercussions businesses may face when time tracking goes awry:
Lost Revenue
Inaccurate time tracking means you're not capturing all the billable hours worked by your team. This can result in underbilling your clients and losing out revenue. Over time, this can add up and have a negative impact on your business's financial health.
Overworked Team Members
If your team members are not accurately tracking their time, it becomes difficult to allocate resources effectively. This can lead to overloading certain team members with more work than they can handle, causing burnout and undue stress on your team.
Inaccurate Client Estimates
Accurate time tracking is crucial for providing clients with realistic estimates for future projects. When you don't have a clear understanding of how long similar projects have taken in the past, you run the risk of underestimating or overestimating the amount of time needed for future work.
Lack of Project Insights
Accurate time tracking allows you to gather valuable data and insights about your agency's projects. When time tracking is inaccurate, you miss out on opportunities to analyze project performance, and make data-driven decisions for improved project management and profitability.
Limitations of Using Timesheet Spreadsheets
Now, I know what you're thinking – "But can't we just keep using our spreadsheets? They've been with us through thick and thin!" Sure, you could stick with those tried-and-true spreadsheets, but let's face it, when it comes to using them, the inherent problems of using timesheet spreadsheets still remain:
Entry and Formula Errors
Entry errors where time is entered incorrectly or doesn't match the expected format, or incorrect, altered or deleted formulas are all issues that cause frustrating time delays and resource drain.
It seems like no matter how hard you try, there's always an entry or formula error lurking around the corner. As a business that relies on accurate timesheets, these errors can be a major headache.
Don’t Store Historical Changes
Changes to the team member rates? Or task rates? When did they change? Reassignment of a team member to another project? When was that exactly and who made the change?
Fine, if you’re Alex Mullen, the World Memory Championship winner, but if not, it’s useful to have all the historical changes and notes there for you for each project and team member.
Don’t Consolidate for Billing
With the endless amount of timesheets that need to be reviewed and processed for agencies, it can be a daunting task to consolidate and combine all the individual timesheets to accurately generate an overall picture of how much time was spent on a certain project or task for billing purposes.
Even once you’ve consolidated the hours and you know how many hours need invoicing for, is the client to be billed at the individual team member rate, a project rate, or at a task rate?
Don’t Tell You Anything About Capacity or Availability
Sure, the timesheet spreadsheet shows you how many hours they logged last week, but that doesn't help you figure out if they can handle any new tasks. It won’t tell you what their current workload is and how many hours they have allocated to different projects.
And forget about finding out project or team member timelines - like when the project's due or when the team member assignment finishes.
Don’t Tell You Anything About Utilization or Productivity
Tracking your team’s utilization rates is essential for getting an accurate picture of your agency’s chargeability and productivity.
Knowing how your team is spending their time lets you identify underutilization and overload and ineffective task allocation, enabling you to manage resources better and ensure that projects are delivered on time and completed within budget.
Timesheet spreadsheets won’t give you any insight into how your team resources are being used.
Don’t Tell You About the Profitability of Projects or Team Members
Whether it’s tracking the billable vs cost for each project or the billable vs cost for each team member, having a good grasp on the financials is all important in order to keep tabs on how your projects and team members are doing.
KPI’s such as utilization, productivity, profitability are the measures you need to be monitoring regularly in order to stay on track and hit your targets
Why You Should Implementing a Time Tracking System
Here's the deal: you've got to implement a rock-solid time tracking system that makes your team go, "Oh yeah, I got this!" Arm them with user-friendly tools that make time logging a piece of cake.
Then, don't just let the data collect dust – analyze the insights! With accurate time tracking as your secret superpower, you'll avoid the pitfalls and maintain your business’s stellar reputation.
Billing
Billing is fairly straight-forward when your clients are billed at a set-agreed project budget. This might be at the end of the project, or something like 40% upfront and the remainder invoiced at certain milestones or agreed time periods.
But not all projects have a fixed budget price.
You've got your accurate time tracking software in place now, to tell you how many hours to bill for, but then comes the real head-scratcher - determining the correct rate those hours are to be billed at - if the client should be billed based on the team member rate, set-hourly project rate, or task rate?
And didn't one of the task rates increase? When was that?
And, being a global business, nearly half of clients are billed in USD, a third in Euros and the remaining in GBP.
It's enough to make your head spin.
Forget the billing blues! Businesses can make life easier by picking the perfect timesheet software. Look for one that's got all the bells and whistles for task rates, set-hourly project rates, and team member rates. Choose timesheet software with currency superpowers, so you can bill clients in their preferred currency without breaking a sweat. Plus, it should be able to handle changes to rates, with billing updated from the effective date and should keep a history of those rates, just in case you need to go back in time and settle any "What was the rate back then?" debates.
With the right timesheet software, agencies can whip up accurate billing reports for clients faster than you can say "bill me."
No one wants to pay extra, so make sure it doesn't charge a premium for essential billing features.
So, make billing a breeze. Choose wisely, and wave goodbye to those billing headaches.
Critical Team Member and Project Insights
Having a good understanding of the financials is crucial for monitoring the performance of projects and team members. KPI’s such as utilization, productivity, profitability are the measures you need to be monitoring regularly in order to stay on track and hit your targets.
Many timesheet apps provide basic insights such as time reports and billable hours, but they lack comprehensive reports that you would expect from such software. Most agencies have to revert to multiple spreadsheets to get all of this insightful data. Bring on the data entry and formula errors and wasted admin time......
Most timesheet apps also lack a full multiple currency capability - some do allow you to bill in different currencies (which you often pay a premium for), but very few can cope with multi-currency team member costs (and therefore can’t give you any useful billable vs cost insights).
If you're a worldwide agency with different currencies floating around, choose a software that can do the maths for you. Get those currency converted reports, so you can stay on top of your game and crush those targets.
Conclusion
Yeah, you could totally stick with those old spreadsheets if you want, but let's be real – we're living in the age of technology. Why waste your time on those time-consuming, mistake-prone sheets when there are software options out there that can do it all for you with just a few clicks?
And of course, nobody wants to pay more than they should, so make sure you choose a timesheet software that doesn't charge ‘extra’ for features that should be included as standard.
