Why Tracking Time Is Essential For Project Accounting
How to track in real time for your business
- BI & analytics across Professional Services
- Time. Essential for accurate project accounting
- Segment by project, client, category, type
- Connect budgets through to projects
4 min read
Being able to track whether you are making or losing money on a project is essential for any business. And for professional services, where time is money, you need to do everything you can to optimise time in order to maximise your bottom line.
Yet while cash flow and inventory are monitored rigorously, time tracking is often neglected in professional services.
The fact is, time tracking is not only essential for accurate project accounting, it also provides incredibly valuable business intelligence and analytics to professional services companies. How can you expect to grow your revenue if you cannot see where time – your most valuable resource – is being spent?
Let’s explore the benefits of time tracking for professional services:
1. Create more accurate project estimates
With every project, you face a major challenge: how do you deliver the client project on time and on budget, while maintaining your own profit margins?
It all comes down to the planning phase. Project managers need to draw on the right data to create accurate time and budget estimates for future projects.
That’s where time tracking comes in. Rather than undercharging clients or under-scoping the time it will take your team to complete similar work, you can see exactly how much time has been spent on similar projects and estimate accordingly.
2. Get the data insights you need for business growth
The insights you get from time tracking can be an eye-opener. How much time is spent on value-adding activities? How much is spent on time-consuming admin that could be automated or outsourced?
These deep insights into how your company spends its time can empower you to make big improvements to the way you run your projects. Let’s say you see that your employees always spend more time at the same stage of each project, you can investigate what’s creating hold-ups. Maybe they need more support, training, better workflows or changes to how they communicate. These things can only be discovered if you know how time is being spent every day.
It can also help you work out which projects are profitable to take on in the first place. By segmenting time tracking data by project, client, and category, you can see trends in which clients, projects and services are high or low return-on-time.
This can help you direct your business in the right direction.
3. Don’t let your project budgets catch you by surprise
Time tracking allows you to track your project’s progress in real-time. See how much time you’ve tracked to a project, and how close you are to your budget. MYOB Advanced lets you connect specific projects and budgets directly to your timesheets. You can then break down all your data by person, task or aspects of the project to get a better understanding of the project costs.
For example, Marsden Maritime Holdings benefits from how MYOB Advanced handles real-time tracking of multiple development project costs and can code transactions to different departments and projects.
4. Learn and adapt
If you can see where time is being spent, you can use data to identify areas for improvement both during the project and for future projects. For example, you can see where time is being spent day to day and reallocate your project team accordingly.
5. How to implement best practice time tracking
Asking individual employees to painstakingly capture hours in a spreadsheet or weekly timesheet no longer measures up.
Precise time tracking as part of a single Enterprise Resource Planning solution is the best way to gain deeper business insights, enjoy better control over projects and ensure accurate client billing. This is all available in MYOB Advanced.
Of course, investing in software is only half the battle – you still need to motivate staff to actually use it.
Choosing best practice software makes this easier. For example, MYOB Advanced lets employees and contractors easily track their time via a mobile app. Wherever they’re working, project staff can record their time, take photos of expenses, and send reports to a manager’s device for approvals.
Part of this is ensuring team members understand how important it is to track their time accurately. Do they understand the real cost of inaccurate timesheets and why time matters? Invest time in getting your whole team on board and you will take the pressure off project managers and accounts having to chase down individual employees.
For professional services, tracking time is more than just a way to improve client billing; it’s a powerful business intelligence tool that can give you the insights to propel business growth.
Discover how easy it is to implement time tracking for project accounting with MYOB Enterprise software.