Time tracking is a subject that causes many a manager’s eyes to roll. The concern is understandable. Most of us have experienced the negative consequences that occur when bad time tracking practices are employed. Time tracking can be a major headache, if you get too granular and it can make employees feel like “the man” is watching their every move. There are ways to implement time tracking that minimize the commonly quoted reasons for hating the policy, but first you need understand why time tracking is important (even if you bill on a fixed fee basis).
When you track time, you are gathering data that will allow you to do project costing. This is especially important when you’re working on a fixed fee. I once had a client who bid a project low because it was a good publicity piece. Since they knew it was going to be a loser, they didn’t bother keeping up with the project cost reports. When the project was finished, they finally took the time to review the time data they had gathered. Guess what? The project was over budget by 400%! The designers went crazy trying to make it the best piece ever. Why? Because no one gave them a limit. When you actively monitor your project time and budgets, you can give your employees a sense of the project scope and keep scope creep under control.
Project costing information also helps you price future projects. Take the above situation, for example. With the time and cost information on that project, the client is armed with useful information for a similar quote request. Sometimes a project is over budget because of poor project management and sometimes it’s just a bad quote. Managers will have to do their own due diligence to determine why the project went south. The time tracking information will help them figure out the problem on current projects and will be a great resource for future project pricing.
