How the Right Time Tracking Tool Will Grow Your Business
June 7, 2018
If you think time tracking is pointless, think again!
Time tracking offers several benefits for you and your business such as improved productivity and the ability to make more money for your business by billing for the exact hours you work.
While you can log time on paper or a spreadsheet, there is a better way: time tracking software. The software stores your information centrally, you don’t have to enter data manually and you can use this data as business intelligence.
But many of the time tracking tools on the market have issues. They’re often disruptive and don’t account for different business needs.
In this post, we’ll highlight:
- The benefits of time tracking
- Common problems with current time tracking solutions
- How to fix these problems and grow your business by using FreshBooks
Benefits of Time Tracking For Your Business
Here are five benefits of tracking your time:
1. Time Tracking Improves Your Productivity
How often do you wonder where your day went? By tracking your time, you understand how you spend it and what the time wasters are (e.g. social media browsing). By eliminating time wasters, you can improve productivity.
2. Time Tracking Helps Identify Areas That Need Improvement
Beyond identifying time-wasters, time tracking lets you pinpoint tasks that are taking too long. For example, if you’re a freelance designer who’s spending more time on designing an advert than projected it might be because you’re making too many revisions for your client.
If you’re charging a fixed price for the project up front, it can dig into your revenue. You may benefit from limiting changes or obtaining a more detailed brief up front.
3. Time Tracking Ensures Your Invoices are Correct
Many small business owners bill by the hour. Track your time so that final invoices are correct and your client is paying you for all hours worked.
4. Time Tracking Ensures You Make Accurate Future Projections
If you bill up front, you can also benefit from tracking time. Have you ever had to quote on a new project, but weren’t sure what to charge? Sure you have.
Thankfully, by tracking time, you can see how long similar projects took to create an accurate invoice. You’re also able to give clients peace of mind if you bill hourly by providing them with a rough estimate of what the project will cost.
5. You Focus on One Task at a Time
By monitoring your time, you’re aware of the time increments, and because you want to log the correct time, you only concentrate on one task. Single-tasking is important as studies show that multitasking negatively affects your productivity.
One study by the American Psychology Association highlighted that switching between tasks can reduce productivity by up to 40%. Yes, you heard right, 40%!
Highlighting the benefits is one thing, but how do you efficiently track your time?
Time Tracking Solutions (And Their Problems)
You could manually document your time in a spreadsheet or on paper, but that only takes time. Online time tracking software solutions are a better option. However, there is yet another problem: today many time tracking tools have shortcomings:
- They fail to cater to different business owner needs, often providing one-size fits all product regardless of the type of business.
- Many business owners perceive time tracking as disruptive, with cumbersome time tracking solutions increasing this negative perception.
- Many time tracking solutions require that you enter irrelevant information. The software that should simplify their lives and help grow their business only causes headaches.
The result? Those who use time tracking software, soon discard it. The solution? FreshBooks.
What to Look for in Your Time Tracking Software
FreshBooks created time tracking features by working with hundreds of small business owners to understand their challenges, unique needs and how they scope and price projects.
For most small business owners, the normal approach to pricing is:
- Working with the client to understand the project scope
- Providing details of all services to deliver
- Estimating the time it takes to complete each service
- Multiplying the hours by the hourly rate to calculate the project price
The best time tracking capabilities will allow you to unlock value for your business. It works for those who price up front or as the project progresses, and also for those who actively record time (trackers) or log time after the fact (loggers).
But what should you look for in your time tracking software? Let’s review the time tracking features you should look for:
1. The Ability to Easily Track Your Time with a Timer or by Logging
The ability to decide how to log your time, either by setting a timer and tracking your time or logging the hours after you have completed your work.
2. The Ability to Track Time Against Clients and Projects
You don’t want to track your time only to create a new chore of having to reconcile your tracked time with your projects. Look for a tool that also provides the ability to track time against a particular project. You can compare actual time versus the budgeted time to see if you’re on track.
3. The Ability to Track Your Entire Team
If you delegate tasks or work on teams, managing their time is also key to productivity. Look for a tool that allows for shared visibility. This will help you understand what your team has completed and where there may be issues. For example, if there’s a project that’s over the time budget you can pick up on this, discover why it’s over budget and find solutions to rectify it.
4. Clear, At-a-Glance Overviews
Whether you’re looking at a particular client, project or just want a general overview of where you’re spending your time, look for a tool that gives easy summaries. These will help you when you look to improve overall productivity, estimate time on particular project types or guide client conversations about scope.
5. The Ability to Create Accurate Invoices and Bill Seamlessly
The whole point of working so hard is to make some money, right? So eventually you’ll want to turn those billable hours into invoices. Look for a time tracking tool that integrates with your invoicing software (bonus points if it has online payments built in). That way, your new-found efficiency will hit your wallet even faster.
6. The Ability to Analyze Past Information For Accuracy in The Future
Let’s be honest, no two projects are the same, but the more you track your time, the more information you’ll have to price future projects accurately. For example, if you need to create a website for a client, analyze the performance of other projects where you also created a website and use that to price the new project.
By using past projects as the foundation for future projects you are basing your pricing decisions on reliable business information, and not a thumb-suck. It’s one more important piece of the puzzle that’ll propel your business forward.
So, are you ready to use FreshBooks to track time and grow your business?