Accurate billing of each client’s work and time tracking is essential to the profitability of professional service organizations operating on a highly specialized business model.
Despite this, many still don’t understand why monitoring staff time in real-time on a client-by-client basis is crucial.
This is especially true of the current crop of self-employed people who have created their enterprises online and often charge by the contract rather than the hour.
Knowing how much time is spent on each customer is essential for accurate pricing and sound decision-making when negotiating new work.
This is true even for organizations that do not utilize billable hours but prefer an overall charge for a certain project.
We need to take a closer look at time monitoring to see how much of a difference it may make for businesses of all kinds.
For starters, let’s define “Time Tracking.”
First, let’s define time tracking so that we can see how it might be used to enhance the efficiency and profitability of professional service organizations.
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Focusing on how one’s time at work is the main goal of time monitoring. Using a time tracking application, you may easily determine how much time an employee has spent working on a certain project.
The popularity of time monitoring apps can be attributed to the fact that employee time is now considered one of the top 10 KPIs for any successful firm.
Consider a freelancer who takes on multiple clients at once to see what this implies in action. Once a day, they focus solely on that one task.
They lose 40 minutes on a phone call with a client and finishing up specifics on a different project. Two more problems occur throughout the day, eating up an additional hour on a third project and 20 minutes on a fourth.
Freelancers who don’t keep track of their time may forget to bill their other clients for two hours of work that they did but forgot to record.
It is still crucial to know how much time was spent on other projects, even if you are being paid on a per-project basis, to calculate how profitable the work was.
The same logic applies to staff and teams; having a clear picture of how they spend their time is useful for charging customers, managing the business, and seeing potential issues before they escalate.
A time tracking tool is software that allows employees to keep track of their work activities.
Inputting new tasks at the outset allows the system to precisely assign time to clients, projects, or individual activities as required, generating data that may be utilized for billing, of course, but also allowing extensive analysis of operations.
Bill More Accurately
Every minute that isn’t accounted for on time sheets is money that can’t be made. Minutes may not seem like a lot, but they may rapidly add up. Accuracy issues in reporting, estimating, and late timesheet additions can cost thousands of dollars annually.
You shouldn’t let little losses eat away your profits and cancel out your team’s hard work and dedication.
Make a Strategy and Stick to It
For projects to go as planned and to meet customer expectations, it’s essential to provide them with precise, thorough timetables and estimates. Both should be compared to the actual time spent by the team so that managers can see how things are progressing at any given time. Accurate time input is also necessary for improving project estimates in the future by learning from past work.
Stop Wasting Time
Professor Joseph Ferrari of DePaul University found that 20% of adult males and females in the United States are chronic procrastinators who put off doing their tasks until later, even when critical. By keeping tabs on how much time is spent on various tasks, you can identify and fix the biggest time leaks resulting from procrastination. This essential enhancement can assist individuals in overcoming obstacles and have a salutary influence across your organization.
Keeping track of time also provides data for auditing processes. To help managers identify areas or processes that require improvement, reviewing the original project timeline and comparing it to the current state of affairs is helpful. Streamlining efforts and removing bottlenecks that contribute to too much time spent on specific tasks can aid both full-time and freelance personnel in making better use of their time.
Choose Clients Wisely
It’s important to remember that not all clients are created equal and that some will inevitably add complexities that force projects to run over schedule. You can only correct or at least plan for what you know, which limits you when problems arise due to the complexity of a task, unreasonable demands, or fluctuating expectations. To make sound judgments and keep your top customers around, you need to know which clients and projects take the most time.
The ability to monitor the percentage of each resource’s time spent on billable work can help you increase output and alert you to signs of overwork and burnout. Utilizing time monitoring data, a resource manager can distribute tasks more fairly, reducing stress levels among crucial team members and increasing their capacity to get things done. Don’t overwork your team if you want to keep them around for good.