Creative Agency Time-Tracking Strategies To Make Every Billable Hour Count

Time is an elusive resource: It’s invisible, yet always there. It’s measurable, yet difficult to record accurately.

When you’re a business leader, it’s important to overcome these obstacles and get time on your side. Smart use of time correlates directly with better profit margins. And for agencies, it’s particularly crucial to monitor how much time is dedicated to each client and type of work. 

Even the best project managers and project management software won’t be sufficient to achieve maximum profitability without careful attention to resource management.

Why It’s Essential To Carefully Manage Resources

Managing resources is about more than just finishing projects on time. Applying labor and other resources to your client work in the most efficient way possible can result in: 

• Higher quality deliverables
• Fairly distributed workload
• More profitable projects
• The ability to expand services
• Long-term agency growth

Good resource management starts with tracking time consistently and accurately so you can gather the data you need to better allocate resources to future projects. While your team may not initially see the benefits of time tracking, the potential to redistribute work and reduce the risk of burnout could give them an incentive to keep it up.

Strategy 1: Use Consistent Timesheets

If you want your staff to actively participate in time tracking, give them an easy method for making time entries. The timesheet format you choose should be straightforward, easy to read and interpret and consistent across departments and roles.

At the very least, whether you use a spreadsheet template or an app, the time entry method needs to be the same for everyone so your data is easy to compile. You may want to use tags or categories to keep track of billable, non-billable and vacation hours.

Entering time shouldn’t be a matter of simply plugging in eight hours per day, either. Agencies often benefit from getting more granular with time logging. While you don’t need to focus heavily on capturing every second, it is helpful to see how many minutes your team spends on each of the following:

• Planning and brainstorming: The creative process can take up a significant amount of time in an agency environment. Though it may be worth every moment for the excellent deliverables that result, quantifying this time can help you justify rate increases and give your leadership team a better understanding of employee efforts.
• Research: To fully serve clients, you have to dig into their needs and goals, which means your staff might spend a lot of time researching new industries or challenges. Tracking research hours can give you a better understanding of how to make the process more efficient.
• Internal communication: No matter how your team communicates, or whether they do so face-to-face or remotely, the time they spend discussing clients and projects is critical to keep track of. This information can help you identify the right time to change up workflows, adopt messaging software and more. 
• External communication: Communicating with clients clearly and regularly is likely a big part of the job for your account managers and other client-facing team members. Many businesses neglect time tracking for sending emails or conducting intake for client requests, but these seemingly small communication tasks can take up more time than you may realize.
• Client work: Arguably the most essential usage of time is the completion of client work. That may look like many different things for different people, which is why tracking it can be useful. Depending on the size of your agency, you may even want to break client work down by project, service type or task type — which can be done in a platform like Accelo that automates time tracking and specializes in client work. 

Collecting this detailed data can be a systemized process, and ensuring access to it at all times can make your entire agency more efficient.

Strategy 2: Connect Time Logs to Hourly Rates

Perfecting how your team enters time is the first challenge; aligning the resulting logs with the rates you bill for is another, more complex one. However, it’s worth the time and effort to generate this crucial data about how your business is performing.

We recommend differentiating between billable and non-billable hours, then refining categories of billable time associated with each client or project and the associated hourly rate. If you’ve been charging somewhat arbitrary rates or haven’t adjusted them in a long time, the period when you’re reworking your time-tracking practices is the perfect time to update market research or competitor comparisons. Cross-check each account and type of work with your most recent invoices to verify that your billable rate records are accurate. That way, your time-tracking setup will be reflective of what you charge today. 

Even if you use value-based pricing, it’s beneficial to calculate an hourly rate for internal use so that you have a basis for projecting revenue and profitability.

While doing this manually is possible, it’s time-consuming and likely to result in inaccuracies. Using a time-tracking app is a more reasonable choice.

Accelo connects time logs to billable rates and can handle multiple billable rates if your employee costs vary. Check it out now with a free trial, or schedule a demo to learn more.

Strategy 3: Implement Automated Time-Tracking Tools

Gartner reports that only 16% of employees use employee engagement technology such as a time tracker. One reason for this low number could be that employers are overwhelmed by the number of digital tools available. Another possibility is that time tracking is easily overlooked if it lives in a system that’s separate from the company’s primary application.

➡️ This won’t happen if your time tracking is baked into a client work management platform.  

Let’s think about what you should look for in a solid time-tracking solution.

The most useful time-tracking tools help you combine both of the above strategies to experience tangible benefits: 

• They eliminate human error from time entry by automatically tracking employee activity for daily tasks. Without smart software on your side, it’s easy to neglect time entry for seemingly small tasks or get distracted and forget to enter even large blocks of time.
• They connect time logs to project budgets and task completion —and, ideally, push the data through to client invoices. Your clients will be more likely to pay invoices on time when they’re confident in how your staff’s time was spent during the billing period.

Given the profit-building potential of the above, we recommend adopting multifunctional time-tracking software. It can be counterproductive to have a dedicated platform that logs time but doesn’t integrate those records with your team’s tasks, projects and invoicing, at the very least. Your team’s precious minutes are dedicated to every stage of the client journey, whether they’re client-facing employees or not. Linking that time to goals and outcomes is only possible when you have a platform that ties the data to the correct stage, client and project.

If you’re ready to search for a work management platform that includes time tracking, you should also consider that automated time-tracking solutions help agency leaders and employees reap the greatest benefits. They’re built to mesh seamlessly with all types of work and tasks, requiring minimal distraction while collecting maximum-value data.

TIP: If your team is hybrid or remote or spends a lot of time in client meetings, go for a time tracker with both a mobile and desktop app.

Strategy 4: Generate Accurate Reports About Projects and Tasks

The simple act of tracking time, when performed regularly and accurately by everyone in your agency, can have a huge impact in the long run. You’ll know you’ve selected the right time-tracking software when it begins to help you make better decisions.

A time-tracking tool that produces detailed reports can equip you with priceless business intelligence that you can truly use. Time log reports that break down billable vs. non-billable and actual vs. estimated time, like they do in Accelo, and compare those buckets of time against projects and budgets can encourage:

• Data-driven project planning
• More accurate quotes and timelines
• Workload awareness and burnout prevention
• Better employee-project skill alignment
• Faster project completion
• More confident hiring practices
• Profitable rate increases and services expansion

Ultimately, the choice to implement time tracking can radically shift your agency operations and help you fully utilize your creative team.

READ NEXT: 5 Techniques To Optimize Employee Utilization

Better Services With Improved Resource Management

Good time-tracking data jump-starts a self-sustaining cycle: You free your team from the mundane burden of manual time logs, use your time data to nail employee utilization, then your team can focus on efficiently providing high-quality, more profitable services, and so on.

Your employees may be wary of time tracking at first, but they’ll soon see how it helps them achieve better individual time management and generate evidence of their hard work. This, in turn, makes them more likely to spend their time consciously and build stronger relationships with colleagues and clients. Thus, your agency tightens any resource or creativity leaks.

And even though you’re providing great services already, there may be further opportunities to expand or drill down into what your clients need and want most — and you haven’t been able to pinpoint them because you haven’t known how much time your team has been spending on simply producing what you’re contracted to deliver.

How a Time Tracker Affects Pricing — and Profitability

When your team gets more focused and better at what they do, the value of your services goes up. That means you’re able to charge more. Not only are you getting more done in less time, but you have the clear time logs attached to each client and project to prove it.

This is a powerful step towards long-term profitability. Knowing how your team is resourced can help you streamline staffing and cut costs. Your clients get more dedicated attention, potentially increasing their lifetime value. You’ll be able to align rates with actual labor costs instead of guessing at where your resources are being spent. And even if your billable hours go down as efficiency improves, you’ll stay profitable. You may even decide to restructure your agency’s pricing altogether as a result of insights you gain about what it really takes to complete projects on time and on budget.

Furthermore, with consistent time tracking connected to billable rates, you’ll be able to determine your most profitable clients and make a plan for holding onto them with recurring contracts.

A comprehensive agency management software that has the capacity to use time-tracking data to generate profitability reports could be just what you need to take the first step in the journey outlined above. Accelo is a client work management platform used by many creative agencies to manage prospecting, generate quotes, plan and execute projects, automate client billing and retainers and so much more.

About the Author

Chelsea Williams is Senior Copywriter at Accelo, where she shares unique insights with service professionals and tells user stories via blogs, eBooks, industry reports and more. She has over 15 years of B2B and B2C writing experience — primarily in tech, sales, education and healthcare. Chelsea is an AWAI-certified Master Copywriter trained in brand storytelling and microcopy.