Most agencies will keep track of how much time was spent completing each client project. Whether or not you are billing by the hour, having access to this data is a minimum requirement for running a profitable business. But, if you are willing to invest a little extra time and effort into tracking time on individual tasks, you can create invaluable metrics that will pay dividends for years to come.
The methodology for setting this up is relatively straightforward — break down a project into multiple, smaller tasks, then track the amount of time each task takes to complete. It may sound simple, but it requires discipline and a commitment from the entire team.
Our task management software, Intervals, provides this benefit by providing timers that can be run on each task. One more benefit is that each time entry can be assigned a work type label and billable rate. When your time tracking data is being recorded with these two additional attributes, the reporting possibilities are endless. Here are just a few of the benefits.
Accurate project estimates
Estimating the number of hours a project will require is a difficult process, but it doesn’t have to be. If you have data from past projects, broken down by task, you can put the relevant pieces together into a new estimate.
For example, a client hires your agency to develop a web site with a custom WordPress theme. You can break that workload down into smaller tasks — installing WordPress, designing the new theme, coding the HTML and CSS, and so on. Then look back at past projects to deduce how much time, on average, these same tasks have required.
This works because most web projects are a remix of components that have already been developed for other clients on past projects. Once we know the blend, we can estimate more accurately the final outcome.
Detailed transparency with clients
Transparency is the best approach for building and maintaining client trust. Establish it early on, and clients will rarely question you. But, how much transparency is enough?
Tracking time on tasks is one of the best ways to incorporate just the right amount of transparency into your workflow. When a client can see exactly how much time and money was spent on each task it address two concerns.
First, it shows how the little things add up. Showing one lump sum for the entire project doesn’t tell us much. Breaking it down by task quantifies all of the various efforts that go into completing a project, making the overall project budget more digestible.
Second, it helps quantify each of the client’s work requests. When a client sees the amount of time and money spent on each of their requests, it establishes a feedback loop. It keeps both the agency and clients grounded in reality and goes a long way in managing expectations.
Realistic deadlines
The more detailed our time tracking efforts the more realistic our expected outcomes at any given moment during the project. A project at 50% completion only tells us the project is halfway done. It does not tell us how much effort is left.
But, if we’ve been tracking time on each task, that same 50% is now backed by more detailed data. For example, the data might tell us that all of the design work is completed, but we still have a majority of the custom development left. We can now prioritize the remaining tasks and refine our estimates based on the availability of our developer team.
Getting started
Tracking time on tasks requires a time commitment up front. First, you need to find the right time tracking software for you. Second, you need to break down a project into smaller tasks. And, third, you need to get your team on board.
The process of tracking time on tasks becomes easier as everyone acclimates. After you’ve managed a few projects you’ll start to see the benefits clearly. Your team, and your clients, will thank you for it.
