In the ever-evolving world of business, every second counts.
It determines how you invoice clients, organise your resources, and gauge the success of a project. Therefore, when time tracking becomes disordered, chaos follows.
Consequences of Inaccurate Time Tracking
Incorrectly recording time can have significant repercussions. Despite being seemingly insignificant, inaccurate time tracking can have a ripple effect throughout your business, causing a myriad of headaches. Let's examine some of the potential consequences businesses may face when time tracking goes astray:
Lost Revenue
When time tracking is not precise, it means that you are not capturing all the hours that could be billed to your clients. Consequently, you may end up undercharging your clients and losing out on potential revenue. Over time, this can accumulate and negatively impact your business's financial well-being.
Overburdened Team Members
When team members fail to accurately track their time, it becomes hard to effectively allocate resources. This can result in certain team members being overloaded with more work than they can handle, leading to burnout and excessive stress on the team.
Inaccurate Client Estimates
Having accurate time tracking is essential for providing clients with realistic estimates for future projects. When you lack 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.
Limited Project Insights
Accurate time tracking helps gather crucial information and insights about your business' projects. Inaccurate time tracking prevents you from analyzing project performance and making data-driven decisions for better project management and profitability.
Limitations of Using Timesheet Spreadsheets
Even though spreadsheets have been a reliable tool for many, it is important to acknowledge the limitations they pose when it comes to managing time:
Entry and Formula Errors
Between all the entry errors, wrong formats, messed up formulas - Spreadsheets can really be a time-sucking, resource-draining pain in the neck.
It doesn't matter how hard you try - those pesky entry and formula errors always seem to be sneaking around when you least expect it. When it comes to billing and accuracy is key and these errors can be a real headache.
Don’t Store Historical Changes
Changes to the contractors’ rates? Or task rates? When did they change? Reassignment of a contractor to another project? When was that exactly and who made the change?
Unless you possess superhuman-level memory skills, you'll definitely benefit from having your historical changes and notes stored in one place.
Don’t Consolidate for Billing
There's still the daunting task of consolidating and combining all the individual team members’ timesheets for billing, to accurately generate an overall picture of how much time was spent on a certain project or task for billing purposes.
Even once you have a clear picture of all the hours that need charging, are you charging at the team member rate, the project rate, or the task rate?
Don’t Tell You Anything About Capacity or Availability
You can check all the minutes and hours a team member worked last week but you still don't have an answer about their current availability or capacity. So you think assigning them to another project is a good idea? Nope, can't really tell until you know what other projects they're actively working on and if they have a ton of allocated hours on those.
Don't even get me started on project or team member timelines - like knowing when the projects and assignments are due to finish!
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
Time tracking spreadsheet templates don't necessarily care about the bottom line - they just tracking the minutes.
If you want to be aware of what's really going on financially, get ready to crunch those numbers yourself and measure your utilization, productivity, and profitability to make sure you're on target.
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 outstanding reputation.
Billing
When it comes to billing, projects with a fixed budget are relatively simple to handle. This can be billing the client at the end of the project or split payments, such as receiving an upfront payment and invoicing for the remaining amount at specific milestones or agreed time intervals. However, not all projects have a fixed budget.
Now that you have implemented accurate time tracking software, you need to determine the appropriate billing rate for the hours worked. Should you bill the client based on the team member rate, set-hourly project rate, or task rate? And wasn’t one of the rates increased recently? When was that? In addition, since your business operates globally, you need to handle billing clients in different currencies like USD, Euros, and GBP. These factors can be overwhelming.
Simplify your life by choosing the perfect timesheet software. Look for one that includes all the necessary features for task rates, project rates, and team member rates. Choose timesheet software that can handle different currencies, so you can easily bill clients in their preferred currency. It should also be able to handle rate changes, updating billing from the effective date and keeping a history of those rates. With the right timesheet software, you can quickly generate accurate billing reports for clients. Choose wisely and eliminate billing headaches.
Critical Team Member and Project Insights
Understanding the financials is critical for closely monitoring project performance and team members. Regularly monitoring key performance indicators (KPIs) like utilization, productivity, and profitability is necessary to stay on track and achieve goals.
While many timesheet apps offer basic insights like time reports and billable hours, they often lack comprehensive reports expected from such software. Unfortunately, most agencies need to rely on multiple spreadsheets to gather this insightful data, leading to data entry errors, formula mistakes, and wasted administrative time.
Moreover, many timesheet apps are incapable of handling multiple currencies effectively. Although some apps allow billing in different currencies, very few can handle multi-currency team member costs and provide meaningful billable vs cost insights. Thus, globally-operating agencies with various currencies should select software that simplifies currency conversions and generates currency-converted reports to effectively track performance and achieve targets.
Conclusion
Sure, you could keep using those old spreadsheets, but let's get real – we live in a high-tech world. 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 more than they have to, so make sure the software doesn't charge a premium for features that should be included with any timesheet software.
