In the fast-paced business world, every second counts.
It determines how you bill your clients, allocate your resources, and evaluate the success of a project. So, when time tracking goes off-track, chaos ensues.
Consequences of Inaccurate Time Tracking
Inaccurate time tracking can result in serious consequences. Though it may seem trivial, the impact of inaccurate time tracking can extend throughout your business and create a range of problems. Let's delve into a few of the potential repercussions agencies could experience when time tracking goes awry:
Lost Revenue
When time tracking is not accurate, you may fail to account for all the billable hours worked by your team. This can lead to underbilling your clients and missing out on potential revenue. Over time, this can accumulate and have a detrimental impact on the financial health of your business.
Overworked Team Members
When team members do not accurately track their time, it becomes challenging to allocate resources effectively. As a result, certain team members may become overloaded with more work than they can handle, which can lead to burnout and unnecessary stress on the team.
Inaccurate Client Estimates
Accurate time tracking is crucial for giving clients accurate estimates for future projects. When you don't have a clear understanding of how long similar projects have taken in the past, there is a risk of underestimating or overestimating the time needed for future work.
Inadequate Project Insights
Accurate time tracking provides valuable data and insights into your business's projects. When time tracking is not precise, you miss out on opportunities to analyze project performance and make informed decisions for improved project management and profitability.
Limitations of Using Timesheet Spreadsheets
Despite the long-standing use of spreadsheets, it is undeniable that there are inherent issues that persist when using them as timesheet management tools.
Entry and Formula Errors
An entry error where time is entered incorrectly or doesn’t match the required format, or a messed up formula are all issues that cause frustrating time delays and resource drain.
No matter what you do, it seems there's always a time-sucking entry or formula error that pops up. For billing that relies on accurate timesheets, these errors can be a major headache.
Don’t Store Historical Changes
If you’re not the world's best memoriser, it’s useful to have all that info about changes to team member rates or task rates, plus those team member reassignments, and who made the changes so they’re all in one place.
Don’t Consolidate for Billing
Figuring out hours from an endless stack of weekly sheets, combining them all together to know how much time was spent for billing... it's enough to make you want to tear your hair out!
Even once you eventually figure out the hours, but then you're like, do I charge this by the person rate, by a set project-rate, or task rate?
Don’t Tell You Anything About Capacity or Availability
Timesheet spreadsheets don't tell you squat about capacity or availability. I mean, you can get a glimpse of the hours they clocked that day, but that's it; no insight on how many projects they're currently juggling, or even how many hours they've been allocated.
Plus, they don't let you know when a project is wrapping up or which team members are right around the corner from being done.
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
Spreadsheets can be useful for timesheets, but they’re not going to clue you in on how your projects and team members are really performing!
You need to track those billable vs costs to really understand the performance of each project and team – utilization, productivity, profitability; those are the metrics that you gotta keep scrutinising every so often if you want stay on target and nail those targets.
Why You Should Implementing a Time Tracking System
You should implement a robust time tracking system that instils confidence in your team. Give them easy-to-use tools that streamline the process of logging time.
But don't stop there – analyze the data to uncover valuable insights. With accurate time tracking as your secret weapon, you'll sidestep potential challenges and uphold your business's stellar reputation.
Billing
When it comes to billing, it is fairly easy for projects that have a pre-agreed project budget. This might be invoiced at the end of the project or with a partial payment upfront followed by invoicing for the remaining amount at specific milestones or agreed time periods. However, not all projects have a fixed budget price.
Once you have implemented a reliable time tracking software, the next challenge is determining the appropriate rate at which to bill for the hours worked. Is your client to be billed at the team member rate, set-hourly project rate, or task rate? And didn't one of the task rates increase? When was that? On top of that, as a global business, you have to handle billing clients in various currencies, including USD, Euros, and GBP.
It can be a complex and challenging task to manage.
Businesses can simplify their operations by selecting the perfect timesheet software. Look for one that offers all the necessary features for task rates, project rates, and team member rates. Choose timesheet software with the ability to handle different currencies, so you can easily bill clients in their preferred currency. It should also be able to accommodate rate changes, with billing automatically updated from the effective date, and maintain a history of those rates. With the right timesheet software, agencies can quickly generate accurate billing reports for clients.
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 financials is crucial for effectively monitoring project performance and team members. It is important to regularly monitor key performance indicators (KPIs) such as utilization, productivity, and profitability in order to stay on track and meet targets.
While many timesheet apps offer basic insights such as time reports and billable hours, they often lack comprehensive reports that are expected from such software. Unfortunately, most agencies have to rely on multiple spreadsheets to obtain all this insightful data, which can lead to data entry and formula errors as well as wasted administrative time.
Additionally, most timesheet apps do not have full multiple currency capabilities, with only a few allowing billing in different currencies but very few being able to handle multi-currency team member costs and provide useful billable vs cost insights.
If you are a global agency dealing with different currencies, it is important to choose software that can handle currency conversions and provide currency converted reports, to provide useful insights for financial management.
Conclusion
So sure, you could stick with those tried-and-true spreadsheets, but let's be real – we're living in the age of technological marvels. Why waste your time on hour-devouring, error-prone sheets when, with the right Timesheet software like Teami, you can do it all for you with a few simple clicks?
And no one wants to pay extra, so make sure it doesn't charge a premium for essential features that you’d expect from a timesheet software.
