As a small business owner, a freelancer or team member in a company that offers professional services to companies, you and your team members’ time is billable, accountable and valuable. You sell your services based on a fixed price or blocks of time. Time is thus your most critical asset, so systematic time-tracking and minimising time spent on recurring administrative tasks should be your top priority. Let’s explore the benefits of a top-notch time-tracking software in this regard.
Meet James, a lawyer licensed to practice in three different countries, which means he travels frequently and bills in different currencies. James uses Excel spreadsheets to track his hours, copying details across to an invoice when it’s time to bill. But he is often out and about, and forgets to track many engagements.
Meet Nicola. She heads a web design firm and has a team of designers that work on projects for a diverse set of clients. She uses email for collaborating with her team members and a Microsoft Word template for timesheet entries. She is considering upgrading to an online system that addresses the demands of her growing business.
A good way to boost productivity for any professional service business is to start tracking time systematically. This can provide business insights that will help you make better decisions, and generally make life easier for you and your clients. So let’s take a look at the leading benefits for businesses to use time tracking software:
1. Streamline billing and turn time into money
Be it legal advice, accounting services, web-design or the like – hours spent servicing your customers should translate into money for your business. Time spent on copying hours worked from your Excel spreadsheet to your invoice, or making up the details from memory is costing your business in more ways than one. The same goes for data in disparate tools for invoicing, scheduling or project management. Ideally, you should be using an integrated Professional Services Automation tool that incorporates project and task management, time tracking, resource scheduling, expenses tracking and invoicing on one platform. With all features under one streamlined system, you can automate the flow of information for work management activities. This will save time on administrative tasks and make sure no billing activity gets missed.
James has taken the leap into the world of cloud-based software for invoicing and time tracking. He creates a project for each client engagement, with an agreed billable rate. Tracking time against different tasks is simply a click of a button, on any device convenient, including his mobile when he’s on-the-go. His favorite part is how the software has flexible options for invoicing customers in different currencies and also adjusts for international number formats and the like. This way he is able to keep track of, and invoice for all his billable activities so nothing slips through the cracks.
Nicola now uses an integrated software solution for project management, scheduling, time tracking and invoicing. She finds it heaps easier to schedule the right person for the jobs that come knocking at her agency. She has all her designers dutifully creating timesheets, with details about what they spent their time on. Her favorite part is how her team is able to convert the assignments she has scheduled them for, into timesheets, with just a click. No more back-and-forths with her finance and accounting team for invoice reconciliations and rectifications! She can now quickly review and approve timesheets and convert them to invoices. Her customers can pay the invoices online, with the option to select one of many integrated payment gateways the tool offers. This has vastly improved her cash flow, and saves her many valuable hours each week.
2. Key insights on Customer and Project profitability
Once you systematically track time spent on different activities, you have your hands on a wealth of useful data including where your profit and costs lie. Which projects are giving you the biggest profit margins, and are you spending the right amount of time/resources on them as opposed to less lucrative ones? Which customers should you engage with more often?
Let’s see how Nicola is using her software to get better insight into her business. For every engagement, she sets up a ‘project’ on her system, and allocates resources to tasks according to their skills, availability etc. As her team tracks their time on those projects, they categorize their timesheet entries according to the nature of the task. If she budgets a certain amount of hours to a project and her team is closing in on those hours too soon, she can deal with it in a timely manner. Also, if a team is turning in work well before the budgeted timeframe, she can decide what to do with the spare time (or look for future work with that client!).
James now also lists all his cases as projects, and enters his timesheet entries for each project. This allows him to sort and categorize the entries in multiple ways. He has a much more accurate idea of how long it takes him to do various tasks, and can use that info to adjust his billable rate. He is able to quickly put together accurate project estimates, and impress clients with his professionalism and accuracy.
3. Better utilization of staff
Digitizing the timesheet process will help you identify more easily and accurately how your staff members spend their time and how much of it is productive for your business. You can calculate staff utilization rate (a function of hours spent on billable work versus non-billable work) and how this impacts your service delivery.
Nicola is a much better (and happier!) manager these days. She encourages her team to track all their business activities, whether billable or non-billable, using the timesheets. Instead of analyzing tedious log entries of staff members like she used to, she has set up timesheet approval workflows on her software. She has configured a staff utilization report that provides insights into the billable utilization of each staff member with attractive pie charts and graphs. So now she gets a fair idea of who her best-performing employees are, and who is struggling. This way she can rectify situations in a timely manner.
4. Helps with accurate quotes and estimates
As you make it a practice to track time on projects and categorize your entries by the nature of the task, it becomes easier to prepare quotes and estimates for future projects of similar nature. This way you also have more chance of ensuring your business’s profitability.
James now knows exactly how many hours he spent on research, taking client calls, travel, time in court etc. on his recent engagements. His software also allows him to track expenses for him as well as his firm’s employees. All this helps when he is quoting and budgeting for new cases, as well as forecasting his firm’s profitability.
5. Helps productivity and motivation
Time-tracking has a profound effect on overall productivity of the company. It keeps well-performing employees confident that their work will be noticed and duly compensated. It also keeps laggards in check or brings issues to light in a timely manner. For instance, a team member struggling with a particular task. If self-employed, you are able to instill the discipline and professionalism in yourself to grow into a mature company.
6. Allows your business to scale, seamlessly
If you have robust processes in place from the beginning, like diligent tracking of time, professional invoicing practices and the like, it allows your business to scale more easily. You can use your data to make smart decisions at every turn, and utilize your systems to minimize administrative headaches, and concentrate on what you do best.
James has all this extra time to do his ‘lawyering’ – thanks to his efficient software system that has drastically cut short his day-to -day tasks like estimating, invoicing and budgeting. Accurate timesheet entries alongside professional-looking invoices with fast online payment options has made him quite popular with his clients too.
Nicola’s company has gained an indelible reputation for the fast turnaround of projects (thanks to her online system that keeps track of all client communication and keeps the team focused on deliverables). She is looking forward to expanding her business overseas, as she has discovered that she can manage remote teams and clients with ease.
It’s pretty much a happily ever after!
