5 Ways Leading Agencies Use Time Tracking for Better Bottom-Line Results
Tight deadlines. Making the most of billable hours. Finding the right resources available when you need them. Time is a constraint every agency runs up against. The value of time and how to best manage it are decades old questions that remain relevant in the agency model today. Even in the face of shifting business processes and a more specialized, on-demand workforce, agencies still run up against the need to track hours and demonstrate their value. Time tracking is essential to analyzing the profitability and productivity of individuals and teams, alike. And your accuracy in doing it can mean the difference between hitting revenue objectives and growth goals or suffering through resource limitations and financial strain.
As the agency business evolves, time tracking remains an essential tool for five key reasons:
Getting paid is good
Accurate billing is usually the first thing that comes to mind when considering project time tracking. Estimating or guessing hours not only has the potential to undercut the amount of time actually billed and perceived value of the project, but it also makes it difficult to estimate future client projects and create achievable project timelines. While some services may not be billed on an hourly basis, having an understanding of the time involved allows organizations and project leaders to make billing decisions with greater confidence. Without knowing the time you have spent, it’s virtually impossible to gauge the effectiveness and real business returns of a project.
You can only optimize what you measure
Time tracking provides key insights into how each employee is contributing to the overall project. Every individual works at a different pace. And smooth delegation demands team leaders have a clear view of how people work and the skills they can contribute. Time tracking also increases individual accountability. It’s important for team members to be able to see their own productivity and manage their own work-life balance. This kind of universal perspective makes it easier for managers to know when it’s time to take work off of someone’s plate or when an individual can handle more responsibility. Knowing how employees are using their time also sheds light on which low return on investment (ROI) tasks are eating into profitability and when adjusting task allocations may be necessary.
Finding the balance: freelance vs. full-time
Time tracking provides insight into who might be consistently bearing a heavy workload and if new hires are necessary. The only way to know if you should be hiring a full-time employee or if you need the flexibility of a freelance contractor is if you have measured workloads over time with accurate time tracking. In larger agencies with multiple departments, usually everyone is begging for additional resources. To justify new hiring, you need objective data executives can use to make informed decisions about which department has the greatest needs and which roles will drive the most value for the organization. By tracking time demands over an extended period, you can identify the natural ebbs and flows of your business to know whether you need a full-time resource or when short-term freelancers may be the best way to bridge the gap.
Company-wide perspective is key
Workloads are a company-wide puzzle. Analyzing time tracking reports can give you the complete perspective to manage more effectively. As an agency, time is one of the most essential ingredients in any project (strong strategy and great creative are essential, but they demand dedicated time). And time is really the primary measure in determining a project’s overall profitability. When you can see all of the contributing components to your team’s time usage, you can quickly identify low ROI tasks that need to be eliminated, automated, or delegated to people with skills and an aligned billable rate. With continuous and consistent commitment, effective time tracking will help you improve project management and productivity by enabling more accurate projections, optimized workloads, and the ability to deliver more services.
Know your growth potential
Time tracking not only allows for improved billing, hiring, and project management. It also clarifies opportunities for growth on an individual and organizational level. Knowing how they spend their time gives employees the ability to manage their own productivity and output. At the same time, it provides managers the data to help them strategize the most effective use of time and resources. In a changing business landscape where services are increasingly virtual and the workforce is more specialized than ever, time is more valuable than ever. Agencies who have streamlined their time tracking systems have a significant competitive advantage over their counterparts—clear perspective.
Make the Most of Your Time with Mavenlink
Mavenlink understands that time is a core driver of the success of people-powered businesses. It is one of the key considerations in Dynamic Resource Optimization. That’s why time tracking and project management are core components of the Mavenlink Industry Cloud for Professional Services. Your team can record time as they work, log it at the end of the day or week. Or even enter it from their phone. Mavenlink makes time tracking easier so you can use it more effectively for your business advantage.
Learn more about how Mavenlink can streamline your time tracking processes today.