Digital agency owners who resist implementing efficient time tracking systems, run the risk of losing money on projects and over hiring. According to a survey published on Entrepreneur, the most commonly used payment models at digital agencies are monthly retainer contracts and project-based fees. We like when digital agencies use these models, but only when it is supported by time tracking practices that give agency owners complete transparency into how much it’s costing them to staff projects and deliver on engagements.
The benefits of time tracking have both small and large effects on both your team and your bottom line. Here are two reasons digital agency owners should implement time tracking processes for their teams:
Teams that use apps like Harvest or Tsheets are more efficient and focused on their work then those that simply show up for their eight hours. Rather than getting distracted, employees are mindful of the work they do and how long it takes them to complete it. This is especially important for service based businesses because at the end of the day, let’s be hones—time is money. Even if you don’t need to track hours for the client, agency owners need to track the time it takes their team to complete tasks. Fortunately there’s no need to reinvent the wheel; many digital agencies already use project management tools that have time tracking processes built-in. Voila!
We’ve had clients restructure their bidding process once they realized they were grossly underestimating how much it cost them to staff a project. Agency owners can’t operate on gut or intuition when scoping a new engagement— they must have a clear understanding of their margins for every engagement along with the labor cost per billable hour adjusted by expected utilization for each staff member. In the long run, this data makes hiring more strategic. Agency owners are able to forecast when they’ll need to hire based of information and trends.
Digital agencies that implement efficient time tracking processes are likely to see an increase in revenue. Agency owners will have a better understanding of the ways they’re making money and the clients they’re making money on.
If you're interested in learning more about time tracking benefits and want to see how it might fit into your organization, fill out our get started page and we'll set up a time to chat.