Your Time Is Money (And How You Can Make The Most Of It)
Why is time tracking so important for your business?
Time tracking - the art of logging what you're doing with your time and how long you do it for. If you run a business, time is one of your biggest assets, so you need to make sure you're making the most of it. Even if you're a one-man-show with no employees, you need to know how your time is being spent in order to see what it's worth.
Time tracking is super important for your business. You might be thinking, “my employees might not like this...” and you may get push back at first (but that’s nothing a few donuts or pizza can’t handle). It’s a discipline that takes some time and training, but it’s completely worth it.
Time tracking isn’t a means of being a micromanager - it simply allows you to see if you’re pricing your services accordingly and if employees are being productive. You also want to make sure to remind your employees that time tracking will allow you to better grasp your business’s finances, which could open up some room for bonuses and other financial gains (now you’ve got their attention…).
So why do you need to track time?
Profitability – if you don’t know how much time you’re spending on certain tasks/projects, then how do you know if you’re pricing your services correctly? You may be seriously undercutting yourself.
Productivity – which employees are productive? Which ones seem to be falling behind? Is an employee in need of help because they have too much on their plate? With this information, you can spot issues quickly and resolve them faster.
Accurate Estimates – Based on the data you collect, you can give accurate estimates for future work.
Data for Payroll Processing – Look, if you’re paying John Smith $100,000 a year then you need to see if he’s worth that amount based on time tracking. You can also run your payroll for your employees based off of the data. (This works really well especially with hourly employees because they don’t want to miss tracking their time if it affects their paycheck)
Data/Analytics – Data is so valuable. It can be used in a variety of ways. You could use it to show other potential clients how effective and great your team is and how your pricing is right on target. Clients will have a better idea of what to expect especially if you have data and analytics to share with them.
Before we stop our watch and check out of this blog, we would like to share one of our favorite systems out there called Harvest Time Tracking. Harvest is great for a ton of reasons: it allows you to create different tasks and projects, enter detailed notes, and track expenses for your business. Not only that, but you can generate invoices from the system and email them directly to your client. Easy Peasy! Plus, they have an app which makes tracking even easier. (They’re not paying us to say this. We know this from experience.)
All in all, the only way that you can truly understand project profitability is through time tracking. It takes some time, discipline and training, but it’s worth it. Plus, if your client ever asks for documentation for the work done on their project, you can export the details and send it right over to them. It’s that easy! Regardless of what system you use, you need to make sure to start ASAP! (Seriously go online and try a free trial or something. You can’t afford to go another minute without time tracking.)
Remember, time is money so start tracking every minute and counting every penny. Make sure to check out our blog called “Top 5 Bad Habits of Business Owners” to learn more about some common mistakes businesses make and how they’re rapidly losing money.