No one likes tracking their time, but it is important, even if you bill on a fixed fee basis. Here’s why…
- It allows project costing of your fixed fee projects which can help you stay on budget and profitable.
- It gives you the information you need to price future projects.
- You’ll know how much time and money you’ve spent on R&D projects, so you can take advantage of any available tax credits.
- Your bookkeeper/accountant will be able to generate more accurate financials because you’ll have the information to value work in progress.
- The accurate financials will allow you to view your financial trends. Watching your trends allows you to make decisions early, so you don’t end up in a cash crunch panic.
- Time tracking for business owners and salaried employees can lead to a better work/life balance. You’ll see any areas where you aren’t being productive and you can adjust your work habits to get more out of your work day in less time.
- You can value the time you’re spending on tasks outside of your expertise and make an informed decision about outsourcing those tasks.
- You can right size your staff. By gaining visibility in how time is spent, you will see when your staff is in danger of burning out. On the flip side, too large of a staff means lower profits and bonuses, so you’ll be able to see the need to downsize as well.
The bottom line…. Time tracking is a pain, but there are many benefits. You don’t have to track every single moment of the day to get measurable results. Strive for capturing at least 80% of the work day. Also, explain the benefits of time tracking to your employees before implementing the policy. Speak in their terms…what it means for their life (work/life balance, bonus potential…).