December 12, 2024
Time Tracking for Consultants
Time tracking is a vital administrative function at consultancies. We interviewed several leading consultants to share their thoughts on the best solution.
Time tracking is a vital administrative function at consultancies. We interviewed several leading consultants to share their thoughts on the best solution.
Consultants who don't track time effectively are setting themselves up for all types of problems. Poor time tracking makes it hard to tell which projects are profitable. It makes it difficult to show clients where your efforts (and their money) went. Ultimately, this creates additional business problems related to operations, invoicing, and financial forecasting.
TimeFront reached out to dozens of consultancy founders, CEOs, and other relevant professionals to ask about their time tracking habits. After receiving their feedback and hosting some followup discussions, we were able to group most answers into four categories.
Toggl is one of the most common choices for tracking time at consulting firms. It can also be useful for staffing agencies and similar businesses. Eugene Kushnirchuk, CEO of Hire Developers Biz, says Toggl quickly took the guesswork out of the way he tracks time:
I like Toggl because it has a simple, user-friendly interface and provides detailed time tracking reports, which help with project management and checking productivity.
Clockify is another popular choice for any business where employees are spreading hours across multiple large projects. Christopher Pappas, founder at eLearning Industries, describes the way this tool helps him play the human Tetris game of matching people to projects:
Aside from time tracking, Clockify aids in monitoring our team's workload and productivity, ensuring optimal bandwidth management. One feature we miss is an automatic sync between Clockify, our CRM (HubSpot), and our invoicing tool (QuickBooks).
He also notes that the real-time tracking and reporting allows him to confirm whether each project is on time and on budget.
Harvest is another of the best time tracking tools for consultants that want more than just a log of hours. For example, Jon Morgan, CEO of a startup-focused consultancy Venture Smarter, outlines the way this tool integrates with other key systems to help with holistic firm management:
What stands out about Harvest is its robust reporting capabilities and the ability to integrate with various project management tools. It’s also fantastic for invoicing, making it easy to convert logged hours into professional-looking invoices. On the downside, Harvest’s user interface can feel a bit cluttered at times, and its integration options don’t always cover every tool we use.
Jon mentions that, despite its strengths, Harvest falls short in areas like managing bandwidth or tracking employee satisfaction.
Some consultants say they simply use their project management software for time tracking. For example, Teamwork can generate a report of all hours logged over a certain period (like a given month). While it requires some manual work, it's not especially difficult for an account manager or accounting professional to turn this report into an invoice.
There are benefits to tracking time in almost any business. Thorough time logs and reporting allow leaders to confirm that they're spending the bulk of their time on the most important initiatives. This importance is amplified for service-based businesses like consulting because clients are often paying for time.
In these cases, thorough and accurate time-tracking can have outsized impact on client engagements. The ability to see reports on how time is spent allows firms to be transparent with clients on top of monitoring their own efficiency.
Visibility into efficiency is just as important internally. Assuming that a consultancy carries a bench of salaried consultants, it's vital that the revenue from time billed to clients covers the cost of keeping consultants on the payroll.
Time tracking is only one piece of the picture. Leaders at consulting firms also need to track progress, forecast revenues, and visualize their engagements to get a holistic look at the health of the business.
Some businesses don't have to worry about this as much. For example, a marketing firm might simply turn on various services like social media management or SEO indefinitely. Consulting engagements, however, typically have a beginning, middle, and end.
The ability to track progress toward various milestones will help you add another layer of utility to your time tracking. How much time did you allocate to this project as a whole? What percentage of the project have you finished so far? Does this put you on track to complete the entire project on time and under budget?
Progress tracking also plays a key role in bandwidth management. For example, if you can look at a project and see that you're roughly 6-8 weeks out from completion, you can plan accordingly. The people on this project will need other work soon. There are also revenue implications.
Continue with the example that a project is ending in 6-8 weeks. That means you're only a couple of months from losing the revenue from this project. You can look for opportunities to upsell or cross-sell the same client, or try to land a new project entirely.
Simply put, businesses fail because they run out of cash. An accurate forecast of your revenue prevents that from happening.
The first step toward developing a good strategy is to understand your current circumstances. When you can look months into the future with respect to both revenue and bandwidth, it gets easier to answer questions like the following:
Once you understand your revenue needs in detail, it's easier to proceed accordingly.
Once you can see into he future of your revenue, it's time to take control of the potential outcomes. Now you understand what kind of bandwidth your bench has and what kind of revenue is already on the books for the coming months. Those insights allow you to look at your sales pipeline in a new light. Turn your unused time into billable hours by staffing up the next engagement.
If time tracking and invoicing is the stuff of nightmares for consulting firm leaders, TimeFront is like a dreamcatcher. It provides visibility into your bandwidth, revenue, and even employee satisfaction. Armed with superior firm management visualization, you can take control of your future instead of reacting. to surprises.
Don't take our word for it – sign up for a free trial and start putting your mind at ease today. Alternatively, email hello@timefront.ai and ask for access to the "Free Forever" plan in exchange for feedback as a test user.
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