Time tracking for consultants: 4 reasons to start today
When time is money, the benefits of time tracking become self-evident. Still, it remains a delicate topic in the professional service industry: research has shown that time tracking is often postponed until the very last moment, and then just manually completed based on e-mails and memory. Needless to say, this doesn't help to ensure its veracity.
Only 18% of all interviewees (lawyers, accountants and consultants) track their hours once a day. 40% claim to do so twice a week, and 22% only once or twice a month.
The results are baffling: no more than 4 out of 10 survey participants believe that they correctly keep track of 90 to 100% of their hours spent working for a client. The other 60% records a loss of at least 10 to even 30% of invoiceable hours.
In 2016, TIQ, a company specialising in time-tracking solutions for legal professionals and London Business School conducted mutual research on the importance of tracking time to avoid wasting your company's money.
As consultants usually work for a limited amount of clients at the same time, the loss in their case amounts to "only" 15%. In a 40-hour workweek, this means that up to 4,32 hours per consultant are not tracked or invoiced.
So why exactly is time tracking not taken seriously? There are probably a couple of causes:
- The impact is not measured: there is a certain level of ignorance, causing people to underestimate the financial impact of poor time tracking on their organization.
- Administration is perceived as secondary work: consultants are paid for their professional expertise, not their talent in terms of administration.
- The methods are awkward: time-tracking methods that are often outdated, and part of unwieldy ERP software packages are not helping anyone's case either.
- It's a matter of trust: if the benefits of time tracking are not clear to everyone, chances are it will be perceived as a glorified time clock. In other words, a control mechanism.
Time tracking is but one of the many challenges that consultants face.
Many SMEs and service companies benefit from tracking their time as precisely as possible. We've listed the advantages for consultants:
Some time tracking tools indeed offer little more than a time clock. The best tools, on the other hand, can track the hours worked per client, team, user or project, and convert these into clear statistics. In other words: everything you need to identify your main costs and improve your business processes.
A modern time tracking tool shows all tasks and milestones linked to a project that was already planned in, that needs to be planned in or that has already been completed. Combined with an invoicing tool, sending partial invoices based on completed tasks or tracked time becomes as easy as ABC. What's more: automatic payment reminders urge your clients to pay their invoices sooner.
Regardless of how you currently bill your clients, a precise time tracking method offers them that extra bit of transparency, thanks to detailed reports. Do you choose to work on projects at a fixed, competitive rate to retain your clients for longer periods? You can easily show them how many hours haven't been billed. Do you prefer billing down to the minute? No problem, since you can pinpoint exactly what you did and when. Could come in handy during contract negotiations.
Simply guessing a project budget is a risky undertaking because there's no way to set things straight afterwards. By calculating the cost of hours worked - at a fixed rate per hour, a variable rate per consultant or task - you will know precisely how much of your budget has been spent at any time during the project. This allows you to track the evolution of your projects in real-time, which in turn gives you time and space to adapt if necessary.
- Last modified on 06/12/2023