Without insights into how long projects take to complete, how do you know where your biggest profits are generated?
Here’s an analogy for you…
Imagine having four pockets with money in (I know, increasingly unlikely in a cashless society, but for the sake of this analogy, bear with me). One of the pockets has a hole, everywhere you go you lose a bit of money. You would want to track down the hole, fix it and reduce or (even better) eliminate your losses… I don’t think anyone would disagree with this course of action.
So why are so many firms missing out on higher profitability by not spotting time leaks in their firm?
Is recording time a waste of time?
We are all familiar with the benefits of Fixed Fee billing. Many of you will be engaging with your clients in this way. It is great and makes the whole process of client engagement far simpler and transparent. However, there’s a but… how do you know which Services, Staff, Clients and Projects are the most profitable? To gain full insight into profitability, the truth is you will need to know how long a project (job) has taken. If you care about profits, then recording time is not a waste of time.
Recording time historically takes a long time, at the wrong time
The problem with recording time is it’s generally an “after the fact” event and, in many cases, it becomes an onerous overhead and something many in Practice resent. Staff put off entering time until the end of the day or the week. If this is the case, they are then reliant on memory to know where their time was spent, in turn this means you can’t fully rely on the insights that those time entries provide.
To help your team remove barriers to accurately record time, you’ll need to give them the right tools in the right place at the right time. By integrating project and task management with time entry, you can achieve this result. The previous two stage process becomes a single, efficient process. Real time data entry eliminates the need to use memory recall when updating a timesheet, thus freeing up cognitive processing time for more valuable activities.
Unlocking power of budgets on projects
One huge benefit of integrating services and projects with time entry is being able to tie a project to a budget. Imagine being able to estimate how long a job will take and at any stage through the life of the job be able to accurately see how much of the budget is used. With data insights, you can know exactly this. You can efficiently reposition team members to “get the job done”, this means the job is more likely to be completed on time and on budget.
Data driven decisions on setting fees
Take the guess work out of setting fees with decisions based on data. Budgets can be used when reviewing jobs and helping set a fair fee structure for future work. Often you will enter an engagement with your clients and provide fixed fees based on the information they provide. Sometimes you’ll win but, other times you won’t be so lucky. Removing guess work and emotions from this process can lead to greater profit. If you need to readjust your fees in subsequent years, you can do this with full confidence that the fees are a fair reflection of the value you’re adding.
Plans against budgets
When using time budgets, you will be able to estimate how much time your team are going to need to spend in each period to complete the work on time. This helps with monthly planning and helps ensure you accommodate annual leave and absences.
Spotting growth opportunities in the firm
By recognising the work of effective staff means the right people will receive praise for a job well done in the firm. You can find out how they’ve approached a job and how they’ve efficiently turned it around. This data will also highlight areas where certain staff could benefit from additional support or training. These insights will benefit the individual, the team and ultimately your profits.
As you can see, setting time budgets against projects and integrating the two can provide data that will give valuable insights. These insights can help your team grow and your firm become more profitable.