Your clients have tangible proof of the value of your services, but do you have a true internal measure of what they’re worth?
If your instinct is to estimate, you may be miscalculating billable time.
Every moment your team spends with clients or on client work should move your bottom-line needle in a positive direction. Unfortunately, that won’t be the case if you’re not diligent about tracking and correctly billing for each precious minute.
Whether you use fixed fees or bill by the hour, knowing the real amount of time it takes to deliver your services can help you make sound decisions to drive productivity and profitability in your firm.
First, let’s consider why some billable hours might be missing from your records now.
Your team could be engaging in lots of little habits and distractions, however unintentional, that subtract from billable hours. They could also simply be unaware of how much time it takes to complete certain tasks.
There are a few common reasons your billable time data could be off:
To correct for all of the above, we’ll look at small but impactful actions. We’ve compiled 10 best practices to help you recover billable time using:
Getting a handle on billable time requires proper time tracking. Consider starting with the following time-tracking strategies.
While you may choose not to have your team track time spent on internal meetings, training, etc., it’s important to establish an easy method for tracking all time for which you bill clients. Research trends in time tracking for ways to simplify setup.
Whether you choose to use timesheets, an app or some other method, all time logs need to be formatted the same way across departments and functions. This makes compiling and reporting on totals as easy as possible.
It’s best not to assume your employees know how to log time, even if you think it’s straightforward. Dedicate the effort required to train your team on the protocol you’ve decided on so your time-tracking implementation will be worth it.
Once you can see where everyone’s time is going, you can focus on building processes to support the accuracy you aim to achieve.
Workflows are helpful for every part of your business, but they are particularly crucial in helping you sustain an accurate account of billable time. Each repeatable process in your business should be written and monitored, no matter how seemingly trivial. This will help you decide which steps can be replaced with automation.
While you may find there are a lot of steps you’d like to make less manual, start by prioritizing the ones that will produce the greatest effect for the greatest number of people. For example, automating an action that multiple team members waste time on every day is more critical than automating one-off tasks.
Ironically, time tracking itself can drain your team of valuable minutes. Minimize the burden of logging time by going with automated time tracking, ideally in a platform that integrates all of your work and automatically differentiates between billable and non-billable hours.
Being diligent about time tracking is one of the best ways to make the most of a limited team. Find more strategies in our latest guide:
Even after implementing all of the above, you should expect to continuously modify your internal operations and workflows.
Drill down into areas where you may be leaking billable time and go beyond time tracking to measure productivity. That way, when you make small changes, you can use the same calculations to gauge tangible improvements.
Employee utilization is the key metric driven by billable time. Tracking utilization can give your leadership team and managers vital information to help with decisions about hiring, workload and task assignments. Most importantly, utilization data can offer clarity on how to make your business more profitable with your existing team.
Regular change can be stressful if your employees don’t understand the motive behind it. Get them invested in your business strategy with transparent communication, and make efficiency — for everyone’s sake — part of your organizational culture.
Our best tip? Get some help from smart tech! Of course, we have a favorite client work management platform — and here are just some of the ways it can help increase your billable time:
Want proof? Read how Vector Business Solutions took back 200 hours per year.