Is Time Tracking Necessary?

Is time tracking necessary if you don’t bill clients against time?

Necessary? Perhaps not …

But time tracking can still be beneficial when it comes to analyzing people resource allocation against client billing and revenue.

Is client billing and revenue proportionate to the people resources allocated against those clients and their respective projects?

Is your business allocating substantially more people resources to clients and their projects than anticipated and/or are billing for?

While there’s nothing wrong with offering added value or additional people resources from time to time (in fact, it may help to strengthen the relationship), cumulatively, it may become detrimental to your business if left unchecked.

Your business allocates people resources to clients and their projects. Some may work on client accounts and their respective projects full-time, part-time, or as needed based on an assessment of the anticipated type, scope, and volume of work.

However, when people resources must commit more time to clients and projects than anticipated or more people resources are necessary to manage the workload due to additional client requests or stretching of the type, scope, or volume of work, there will be subsequent impacts to the business.

Essentially, the client is paying the same amount but getting more with the business subsequently absorbing the costs as billing and revenue are not proportionate to the allocation of people resources.

Time tracking can be helpful in proactively monitoring emerging patterns and flagging potential issues while providing supportive data (upon validation) to have meaningful conversations with clients when addressing or renegotiating client agreements, service fees, scope of work, and future resource allocation.

It’s important to address potential issues with clients early on to avoid further issues down the road.