Consultant time tracking apps should allow you to easily and accurately capture your time. If you find yourself guessing your time, you may be losing out on revenue.
In fact, it’s arguably the most important metric a service organization can track. If you’re using a time tracking app and you have the following red flags, you may want to take note. These red flags lead to billable leakage, poor utilization rates, decreased productivity, and poor performance in the long term.
Red flag #1: You have to enter your time manually
A common issue with consultant time tracking apps is manual entry. Many apps rely on timekeepers to remember to track their time accurately. This seems like a reasonable expectation, doesn’t it? An experienced professional should be able to track and record their time properly.
The planning fallacy is an empirically validated prediction phenomenon where people underestimate or incorrectly estimate the amount of time needed to complete a future task. This is especially important because the prediction is still a problem for those who are (a.) experienced with the specific task in question and (b.) aware that their tasks will take longer than expected.
Manual timekeeping isn’t as easy as it seems.
Psychologists Daniel Kahneman and Amos Tversky coined the term planning fallacy in 1977, with Kahneman expanding on his idea in his book Thinking Fast and Slow. In his book, Kahneman states that we struggle with time estimation for two reasons.
- We don’t consider how long similar tasks have taken us in the past.
- We assume or fail to account for barriers, challenges, or complications that will delay our plans.
The planning fallacy affects individuals, groups, and entire organizations.
The trouble with this is the fact that consultants and their clients are often unaware of the problem. As optimism bias clouds our judgment, we fall into the trap of assuming that our tasks will go well.
Manual entry forces consultants to make the mistakes we’ve discussed above. Consultants enter their projections ahead of time, ensuring that they neglect previous tasks and the amount of time its taken to complete them. Or they reconstruct their time from memory, losing a significant amount of revenue due to faulty judgment, errors in thinking, and inaccurate estimates.
You should be able to start and stop your tracking, but the app should measure the amount of time you’ve spent on a specific task or tasks automatically. You should be able to edit your time if you need to make changes, track meetings, and convert them to time entries automatically.
But you shouldn’t be forced to reconstruct or project time.
This is a recipe for disaster, which many platforms are still offering today. Manual time entry has a direct impact on the amount of revenue you’re able to generate even if you bill at a flat rate.
Red flag #2: Uniform timekeeping
Time tracking requires granularity.
You should be able to track billable vs. non-billable work automatically — track employees, contractors, and third-party time. You should be able to easily differentiate between the various types of timekeeping (e.g., tasks, projects, meetings, etc.).
Unfortunately, this isn’t the case with many time tracking apps. Typically, you’re given a single track that you then have to add notes to on an ad hoc basis. This isn’t ideal as it requires more time and attention when it’s time to analyze time entries for billing, invoicing, or internal analysis.
Many timekeeping apps force consultants into a timekeeping model that may not be best for their business.
Red flag #3: No reporting or analytics for consultant time tracking
There are lots of consultant time tracking tools consultants can use. However, many of these don’t provide management with the data and intel they need to make good decisions. Good time tracking software enables consultants to answer the following questions:
- Where are we losing the most time?
- Which employees are most productive, and why?
- Which employees are the least productive, and why?
- Which projects, clients, or tasks are most productive or profitable?
- Which projects, clients, or tasks are minimally productive and unprofitable?
- What is my profit per employee, partner, client, etc.?
Why are these questions important? They give your business the clarity you need to answer higher-level questions like:
- How do we avoid unprofitable clients in the future?
- How do we attract more of the clients we want and none of the clients we don’t like?
- What 20 percent of projects produce 80 percent of our revenue?
- What 20 percent of clients produce 80 percent of our headaches, conflict, or concerns?
These questions provide clarity.
However, a comprehensive look at your time entries isn’t enough. You’ll need to be able to break your reporting down into actionable, bite-sized chunks you can use to grow your consultancy.
Many time tracking apps are generalists in the sense that they provide you with a limited set of data on your team’s performance. They don’t provide you with the level of granularity and analysis your consultancy needs to grow.
For consultants, time tracking is money
While many organizations feel they’re on top of their time tracking, this isn’t always the case. If your time tracking app has any of the red flags I’ve mentioned, it may be time to switch.
These red flags lead to billable leakage, poor utilization rates, decreased productivity and poor performance over the long term. Bill4Time is an affordable, efficient legal practice management platform that allows you to track time with ease, manage billing, create invoices and more, all in one place.
As a consultant, you’re busy. The tools you use should simplify your everyday tasks and keep you business running without the hassle.