The importance of project time tracking

Project time tracking is crucial for any professional services industry. You invoice based on the hours spent on a particular project. That’s why it’s of vital importance to accurately track the time spent on projects. Every minute counts.

It’s obvious that an inventory loss could be fatal for a manufacturing company. Well, the same happens to a professional services business like yours when you don’t manage your time tracking precisely. Losing billable hours is as costly as losing inventory.

Just as retail companies focus on correctly managing the inventory to improve the bottom line, for you, it’s tracking project time efficiently what can have a huge impact on your bottom line.

What happens to those minutes that never make it to the scope document? And it’s not hours that I’m referring to. I’m talking about that little task that only takes a few minutes. That task that appears out of the blue and is forgotten when entering time.

This phenomenon has a name: “The Forgotten 15”. Those are the 15 minutes that you spend doing things that don’t get tracked, and thus, don’t get billed.

Maybe you don’t consider those 15 minutes to be a big deal. They are though of significant importance: forgetting to track time can impact your projects, and your bottom line.

How do these 15 minutes materialise?

They tend to be small daily tasks that never make it onto a customer invoice. From a quick e-mail to a customer through a last-minute favour to a small edit request.

15 minutes may seem insignificant on an individual level but try multiplying this untracked time by the number of consultants your professional services company has. And of course, the bigger you are, the more does your profit margin suffer.

You would never provide services at no cost, would you? With very few exceptions, normally you bill the amount of time spent working on a project. As a matter of fact, when you don’t track your project time accurately you are giving away your services. It is called overservicing and it translates into profit loss.

It is equally important to eliminate scope creep. When this happens, not only does your profit margin suffer, but it also affects the way you serve other customers. You are prioritising specific projects over others. You may be harming some of your customers unconsciously when you don’t manage your resources properly.

We have put together a few recommendations on why and how to track missing time in your project accounting. This guide will help you improve your productivity and in turn your projects’ profitability.

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The importance of project time tracking

Project time tracking is crucial for any professional services industry. You invoice based on the hours spent on a particular project. That’s why it’s of vital importance to accurately [...]