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Timesheets are a key part of agency life. But are we putting our teams through the pain for no reason? Or are timesheets essential?
There are some arguments that agencies can manage without tracking time.
If you’re selling outcomes (fixed-fee or value-based service) and making good profits, does it really matter how much time is spent where? You could argue that monitoring hours isn’t going to impact a project’s profitability. In these cases, profitability is determined by effective project scoping, resource allocation and pricing.
But in reality, if you’re selling time, then understanding how people’s time is being utilised is a must for agency growth.
Tracking time lets you see which clients, projects and resources are the most profitable. And it’s only by understanding this that you can increase your profits.
Ultimately, you want all your people to be fulfilled at work, with enough to do without being overworked.
Timesheets quickly show you if your team is working overtime and what they’re spending this time on, helping you dig into the why.
It could be an account manager not booking enough time, a client changing the brief, a skill or training gap, you’re overselling… but if you don’t know it’s happening, you can’t fix it.
You can also identify underutilised team members. Maybe you’re not selling enough of that skill set, or the person needs upskilling to take on more projects.
More info: Managing your agency peaks and troughs
You need the hours estimated to be an accurate assessment of how long you and the team think it will take to complete the job.
You may know that a job will likely take around 20 hours. But looking at time spent on previous, similar jobs is one of the best ways to accurately do this. It will show you absolutely everything you need to do to deliver it, not just the chargeable work.
If a job needs a lot of account management or pitches upfront, for example, you still need to know where time is spent.
Remember, your estimate and quote aren’t the same things. An estimate is an internal assessment of how much time is needed by skill set so you can manage and forecast capacity. Your quote is the external price you give the customer, which is a commercial decision of how much profit you want to make.
Timesheets will show you how much time has been spent on chargeable and non-chargeable work, so you can see if time is being wasted. For example, a creative could be spending an hour a week on client update calls.
If you can see where time is wasted, you can take steps to save that time. Plus, by accurately estimating the time needed for each skill set, you’ll be able to schedule the right amount of time for each activity and forecast future resource requirements.
If creatives aren’t given parameters for a job, they’ll likely spend much longer on it, enhancing, crafting and honing.
Giving away too much free time to clients leads to expectations for future projects, and can dent your profits.
Having accurate data helps you keep a grasp on what’s happening. If you log your timesheets into an agency project management system, you can set alerts to let you know if a job’s nearing budget, or if you’ve spent half the time but only completed a quarter of the project, and take proactive measures.
Want to avoid overservicing? Check out the 5 reasons agencies over-service
If you charge cost rates by the hour, the data collected can be used to accurately bill the client and report exactly where the time was used, great for client transparency. Plus, knowing the actual time spent vs billed allows you to calculate the profit made on a job.
It feels like it might go against the grain to decide you no longer want to work with a particular client, especially when work is hard fought for and won. But some clients do seem to suck the life out of an agency, making unreasonable demands and keeping your teams busy on non-chargeable work. Timesheet tracking can let you see who’s profitable... and who’s not.
Discover the top six profit builders you can use to increase your agency's bottom line and drive your agency forward.
Accurate timesheets are really the best way to monitor activity in your agency. But a creative scrabbling around every Friday to remember what they’ve done all week won’t be giving you the most accurate information. It’s another job to fit in and a boring one at that.
Making it quick and easy to timesheet using mobile apps, timers, auto-populated timesheets, and reminders will help. But communicating to your team why everyone needs to do their timesheets, on time, will have the biggest impact.
Turning the commercial benefits into individual benefits and showing what’s in it for them. Whether it’s making sure they have the right amount of work, helping to minimise stress or a bigger bonus…
The Agency Works share some simple ways to do this:
These are just a few good reasons for agency timesheets. We know it’s still never going to be a creative's favourite job. But filling out a timesheet, dull as it might be, really does have to be part of your everyday agency life.
P.S. Why not see why thousands of design, digital, marketing and PR agencies - from 10 to 500 people - choose Synergist to manage their projects more intelligently and profitably? Get a demo