Time is Money and Money is Time. How Do You Manage Both?
Listen. You hate time tracking. I hate time tracking. We all hate time tracking. Unfortunately, in the services business, time tracking is vital to success. Lucky for us, many developers have died on the hill of making the new, best, time tracker! Which means there are a lot to choose from, including ours. 👋
When you build a time tracker, you quickly learn you don’t really compete with those other time trackers anyway. We’re all just stealing marketshare from the good ole’ spreadsheet or the Award Winning write-on-a-napkin-when-i-remember methodology.
Teams are really bad at tracking time. A better time tracker isn’t the answer.
The tricky part isn’t figuring out how to track time. The hard part is compliance from your team and ROI. Why am I tracking time again?. If you can demonstrate the why, you can ensure that your team is compliant. I’ve heard so many stories about how of an agency writes their time down on paper, only to submit at the end of the week (or when they remember). 🤯
Are you profitable so far this year?
How much did that project cost to deliver?
You have to be able to answer this for any business, especially
How you leverage time management can be the difference between profit and loss or your best team member leaving because of burnout.
Why Track Your Time
We all track time because time is money. You may bill clients hourly, or flat rate, or some combination — we do both at Mayven. Most people think that tracking time is only about billing time, when really it’s actually about tracking expenses.
Every person on your team, whether paid hourly or on salary, has an hourly rate that reflects their cost basis (how much you pay them per hour including expenses) as well as a utilization percentage. I observed how this works at my first job, working at the OG Services company, Ernst & Young. Basically you want your utilization rate above 80% — 80% of the hours you or your employees are working ideally are billable to a client or project. If you hit 80% *most* of the time, you will more than cover the cost of that person’s full time work. The other 20% of time is usually spent on internal activities, training, and for us, side projects.
When the whole team adopts time tracking, everyone has visibility into how much people are working and how long tasks take. Maybe Connor is spinning his wheels on something that may not be high on the project’s priority list. Layer this onto a team with multiple projects and this problem multiplies, distracting you from your goal.
It’s also a great way to gauge individual workload and prevent burnout. How many times have you looked up from your work and wondered where the hours went? It happens to all of us. Time tracking can help us find a stopping point and disconnect from work. We need this disconnect for our own sanity and for the health of our team.
Who Tracks Time?
On our team, everyone tracks time. Primarily we track time to individual projects and tasks so that we can understand where our time is spent. With Buildstack, we’ve automated the process of tying time tracking to your hourly rate, so you can see how much a project costs you to deliver without having to calculate it manually. Automatically showing if you’re profitable, or not.
There are a couple of things to remember so time tracking doesn’t impede your productivity. If you manage a team, don’t use it to micromanage your team. Chris Rothe, co-founder of the computer security firm Red Canary said, “There’s the potential to leverage [time tracking] tools to enforce management when you can’t see over your employee’s shoulders.” I really recommend you not do that, and instead trust your team members to keep track of time, and make sure they enter it on a regular basis.
Yeahhhhh, about that time sheet….
This brings me to my second point: With any type of work, there’s always a tradeoff between quality and efficiency. If you are constantly thinking about time, you might be compromising your quality — and best work — for speed. I would rather deliver the best product possible than finish it in record time. You owe it to yourself and to your client to do the best possible job, not the fastest.
“Time is money, but also money is money.” — William Gibson
Your team might be the most talented, most passionate lot you’ve ever met, but don’t fool yourself…everyone works to get paid. Whether you’re freelancers, full timers, or contractors, your time is valuable and clients know this. You need to be able to show them the numbers to back up your bids and proposals. Enter billable hours…
This is time that can be charged to the client for a specific project or task. You can also use this information to see if your fixed fee services are actually profitable. It is important to be as specific as possible with your time tracking, so you can manage your workflow during a project and assess profitability for future projects.
What is considered billable time? Here are a few activities:
- Project planning, research, and timeline development
- Communications, including meetings, phone calls, and emails
- Performing actual the work and any revisions
- Yes, Karen, we have to bill you for the extra 30 page designs
The Mayven team bills time to specific tasks, within a specific project. There are a few default settings, client calls, for example, but otherwise we attribute time directly to the task we are working on.
Time Tracking and Communications
Our distributed team relies on asynchronous communication simply because we work across different time zones. We’ve also found it enables us to have more thoughtful, productive conversations, because we’re not in a rush to reply right away. And sometimes, we just want to share a funny meme or talk about video games — definitely important, but not urgent.
So what counts when you’re tracking time on projects? How do you keep track when your team is distributed and not on the clock at the same time?
Try Buildstack’s integrated time tracker for free at buildstack.com.
