Here are 5 good reasons to use Timesheets; a software tool that many experienced managers consider to be the cornerstone of their business.
It is one of the most important business functions, as essential as payroll, accounting or project management. Of course, if you’ve never done time tracking, this may come as a surprise.
The reason is that time tracking is at the heart of service business operations. Not only does it allow you to bill, it also provides a bird’s eye view of your projects. It lets you know if your projects are on track to meet budgets and deadlines and if your team is working at a productive pace. In short, time tracking lets you know if you are profitable or eating your stockings.
Time tracking is essential for all service companies.
It’s important to really track the time your employees spend on projects. There is often a fine line between a profitable project and a loss-making one. You don’t want to underestimate the time it takes to complete a project, nor do you want to overcharge your clients.
Some time management tools automatically integrate the billable time worked to billing. This can greatly improve client billing and be a significant gain for the accounting department.
Enhance projects profitability with Timesheets
Each project is made up of a certain number of hours, and each hour represents a cost, based on the rate you pay your employees to perform that work. To keep your business profitable, you need to determine your costs and calculate the number of hours spent on the project. This is where time tracking comes in.
Without time tracking, many companies don’t realize that some projects are not profitable.
Time tracking allows you to see if you’re on track to meet the budget while the project is still underway, giving you the opportunity to talk to your team and correct course before the project goes off rails.
As you and I both know, it is often difficult to stay the course and stick to the initial scope of a project. Keeping track of the project’s progress allows you to better manage this scope and to accept some changes and reject others.
Improve pricing with Timesheets
Time tracking allows you to build a library of previous projects. You will be able to know exactly how long each previous project, and even previous tasks, took and therefore its cost and profit margin.
This information is essential to refine your pricing. You will know how much it costs you to create or update an application, for example. You can then use this data as a reference for a similar project.
The more projects you have in your project bank, the more accurate your pricing will be. This is a powerful incentive to implement Timesheets.
Improve estimates accuracy
This same project library will also help you better estimate the time needed to complete a project. Setting realistic expectations from the start is essential to maintaining good relationships with your clients because no one likes empty promises… or delays.
Better estimates of the time required for your projects will lead to better planning and allocation of your resources to your different projects. This will help you avoid problems of resource in neutral or lack of resources.
Improve employee management; thanks to Timesheets
Time tracking will give you a clear picture of the productivity of your teams, your employees. You will be able to see if certain individuals, or even entire teams, are over or under performing and adjust their workload accordingly.
Similarly, some employees or work teams may use timesheets to push back an overload of work or justify a new hire. The objectivity of such data elevates the conversation to a more productive level and calls for greater responsiveness from management.
Time tracking allows you to make smarter decisions about how you set your rates, how you execute your projects, how you plan your resources and how you manage in general.
Experience has shown that in most cases, resistance to implementing a timesheet is based on a fear of control that usually disappears with clear and honest communication.