The subject of time recording has followed me around for most of my adult life. Many years ago, I managed the time recording system for a software company during my University placement. I then did my dissertation on the subject. I've since enjoyed a 25-year career in the marketing agency sector where not a week has gone by where time recording hasn't been on the agenda. I must be something of an expert by now.
Is time tracking right for me?
Time recording is a divisive subject in agencies and professional services firms. It has been for as long as I can remember. The reality is that nobody likes timesheets and nobody likes tracking their time. Many say it's a waste of time in itself.
Moreover, agency owners are increasingly frustrated by clients questioning their fees and specifically their hourly rates. As a result, many are rejecting not only time recording, but the hourly billing model they claim it perpetuates. Why should we be forced to charge high value, creative or technical work by the hour they say?
I understand these issues, but after all these years I’m a staunch advocate of time recording. That said, whilst I believe agencies should track time, I don’t believe they should bill it.
Time data isn’t just about billable hours
I support the agencies that resist charging agency work by the hour. Time is a measure of input not output. The value agencies provide is not in the time they’ve spent, but the work they produce. A client shouldn't be valuing or paying for this work in blocks of time.
Whilst stopping charging client work by the hour is wise, not measuring the time spent on client work is foolhardy.
Time is money, goes the old saying. But time is also data. It's essential data for managing your agency and optimising its profitability. It's vital for business planning and monitoring the performance of both your clients and people. If you don't track time, how will you know whether you're over-servicing clients or overloading your team?
When pressed on this subject I use an analogy; imagine you are taking your client on a car journey. Your job is to get them for A to B. What you charge for that journey depends on several factors (not just the time it takes):
- What is the reason they need to get to B?
- How fast do they need to get there?
- How important is it that they get there?
- What other options do they have?
- What comfort - or service-level - do they expect along the way?
All these factors determine price, but to run a profitable agency you must not only concern yourself with price, but also with cost. What did the journey cost you? Could you have found a quicker route? How much fuel did you have to buy to make the journey? If the client asks you to take them back, are you going to do it? Will you charge the same price?
Whilst your clients pay for the journey, you pay for the fuel that goes in the car. Cars run on petrol or electricity and, whether you like it or not, your agency runs on time. If you don’t know how much fuel your agency is using, you can’t possibly know whether you’re running a good business. Analysing your fuel (time) consumption is a must.
Overcoming Challenges in Implementing Time Tracking
For business owners, recognising the value of time recording is only half the battle of course. Getting people to record their time in a consistent, accurate and timely manner is another challenge altogether.
Timesheets have always been a hard sell for agency owners, but with the software now available it shouldn’t be the laborious or painful task it once was. In my first agency, I remember completing timesheets on paper. What we would have given for the AI-enabled software we have at our disposal today(!)
The work agencies do is often time sensitive and frequently subject to change. It can be a very fluid business environment. Management data is often in short supply. Time recording provides the numbers you need to manage and grow your business. Embrace the concept of time recording. Use it as a guide for your pricing strategy (but don’t charge anybody by the hour). And finally, make it easy for your people. Keep it simple and use the best software available to make the process as painless as possible.
Gareth Healey - Managing Partner, Cactus Consulting Limited
Gareth has 25 years of experience in the marketing agency sector and for 15 years was CEO and equity partner of his own £12.5M agency.
Employing 175 people, Gareth’s business was voted the Top Regional Advertising Agency by Campaign.
In 2017 he exited and set up his own management consultancy, to help other agency owners to maximise their potential. Gareth’s work saw him shortlisted for Mentor of the Year at the UK National Mentoring Awards 2019.
In 2022 he published his book, STANDOUT OR DIE. Written to help agency owners win in a highly competitive market, it won a silver medal at the Axiom Business Book Awards. Later that year, Gareth joined Cactus Consulting as Managing Partner where his mission to support agency growth continues.
Gareth has a degree in Business Studies and holds the CIM Diploma. He lives in Harrogate, with his wife and teenage children.