Time tracking is essential for professional services companies. Effective time tracking can help businesses understand profitability, project efficiency capacity management, project progress, and transparency.
From IT firms through to accounting agencies, being able to track time against projects is essential for understanding how to bill clients, where your resources are spending their time, and what your projects are genuinely costing you.
What is time project tracking?
Project time tracking is simply time tracking at the project level. It's monitoring the time spent on tasks and activities, as well as on the overall project.
So, what is time tracking? Time tracking is the process of recording how much time a person has spent doing an activity. In the past, this was done using timesheets or time cards. Employees would manually clock in and out of work, or fill out a paper form detailing where they spent their time.
Today, time tracking can be completed digitally using computer programs. In some cases, employees still manually input the number of hours they’ve spent working on each task or project. This information is put into software instead of onto a paper time card. In other cases, a timer application is used to automatically track time spent on a task.
While both methods are relatively common and can benefit your company, studies show automated timing can result in more accurate data capture and improved productivity.
Time tracking helps profitability
Time tracking is a vital component of project time management. Time management has four subcomponents:
- Planning how much time each task and activity should take.
- Scheduling tasks in your project software, including who will complete what and when.
- Monitoring the actual time spent — this is where project time tracking is critical.
- Controlling the overall project timeline by ensuring actual time spent on tasks doesn’t overrun the budget. This also includes finding ways to make up for lost time on other project activities.
A time management tracker is essential for monitoring time, whether you bill clients hourly or provide fixed pricing services. Without knowing your exact project costs, how can you ensure you’re charging the correct amount?
When you don’t have accurate project data, you open yourself up to greater risk. If you underestimate a project, you’re losing money. You could also end up overworking or burning out your team by unintentionally over-allocating them. On the other hand, overestimating a project could result in too high of a price and turn off clients. Plus, employees could end up idle, wasting valuable time.
Even on internal projects, where another department or area of the business is the customer, profitability is still a concern. Many factors go into deciding which internal projects to prioritize, but two significant components are typically the expected benefit of the project and the expected cost. Without being able to accurately assess the cost of each project, your team may end up investing time into unprofitable initiatives, instead of the ones that create the most value for the company.
Project time tracking helps project efficiency
A recent study found that office workers are productive for less than three hours each day. When you account for breaks, interruptions, meetings, and other non-project-related activities, there isn’t a lot of time left for employees to do project work. But, if you can’t tell what activities are pulling them away from project work, how do you help them boost efficiency?
Project time tracking can help you and your employees discover where their time is being spent and cut down on time-wasters. The simple task of tracking their own time can motivate employees to be more efficient. Once your team can see where their time is going, they can often identify and improve on the largest time-sucks. For instance, they may realize that dedicating blocks of time to different tasks makes them more productive than continually switching back and forth.
When time is tracked and reported, management also has more power to support employee efficiency. For instance, your project team may complain that they spend too much time in meetings, but that can be difficult to verify without accurate data. If time tracking data shows that several hours a week are being dedicated to meetings, you can then help free up some of that time.
Similarly, you may discover some internal processes, such as approval requests, are taking up a lot of time. You may choose to assess whether they can be streamlined or moved off of the project team and onto administrative personnel.
Time tracking helps you manage project resources
Project time tracking enables you to see where your people are spending their time, and how the reality compares to your project budget and resource allocation plan. This data can highlight whether some individuals are over capacity while others are sitting around idle.
By using a work time tracking app, you can also easily determine who is available for new project work and who needs support to accomplish their tasks. Plus, by monitoring how much time different employees have spent on similar activities, you can get a better idea of which employees are more productive. This knowledge can help you ensure your best employees are working on the more difficult tasks. It can also help in the decision-making process for deciding who deserves a raise, bonus, or promotion.
Regular time tracking will also enable you to see when some tasks are taking longer than expected, allowing you to take action before deadlines are missed. By using time tracking software, you will gain insight into project progress without micromanaging your resources or distracting them with too many requests for status updates.
Project time tracking improves projects
Time tracking gives you insight into where your resources are spending their time. This knowledge helps you improve project estimates, ensure costs are accurately captured, and better assess business profitability. It also enables you to monitor employee productivity and help them boost their efficiency.
By using time tracking in your project management software, your team members can add time entries to tasks and projects easily. You can also efficiently view and print time reports for projects. To gain these and other benefits, start your free trial of Wrike today.