There are a few profitability reports that you should review regularly to analyze and maximize profitability in your firm.
How Time Tracking Software is the Key to Your Firm’s Success
Time tracking software can have powerful benefits for professional firms, including increased revenue, employee utilization rate, and profitability.
The litany of excuses for not submitting timesheets is endless.
“With all the work we have to do, who has time to worry about timesheets?”
“I’m getting my work done, so do I need to report my hours?”
"No one likes to keep track of what they do all day long."
"Wouldn't you rather have your employees working instead of filling out paperwork?"
Kelly Voor from the financial advisory firm, Milestone Advisors, suggests that her clients view this situation differently. According to Kelly, here are six great reasons for tracking employee time.
What Time Tracking Software Can Do for Your Firm
Your employees are your main asset and a major factor in delivering quality work to clients. If an employee has a few extra hours a week, how much revenue is being lost due to downtime? If an employee is working too much, maybe the burden could be shifted, improving customer service and employee satisfaction.
Employee utilization rate measures a person’s billable hours against their total hours logged, indicating how profitable each team member is. When you have an accurate record of an individual employee’s workload, you can quickly understand if they can handle more work or if they’re overwhelmed. Many employees won’t immediately understand that time tracking doesn’t equate to micromanagement, but it can advocate on behalf of your team to ensure they don’t burn out.
Using a time tracking tool that measures your firm’s employee utilization, such as BQE CORE, offers insight into team capacity to measure, understand, and optimize your project’s utilization rates. Having your team track their time ensures they’re productive but not overworked, keeping their output solid and predictable. This protects your business in the long run because it sets you up to make more informed decisions about hiring, project planning, and estimated profit.
Do you know which jobs are profitable and which ones aren't? Or which ones take longer than projected? If you are not collecting this data, you miss out on crucial tools for managing your business and wasting resources on work that doesn’t serve your firm.
Time tracking software helps you understand revenue loss and profits by shedding light on which of your workflows are inefficient, if you lack staff capacity, and if you’re over budget on overhead and administrative costs. CORE dashboards clearly display the remaining resources on a project, so you don't exceed your budget or time allocated to a project before it happens.
Project management software with built-in time tracking gathers real-time data and presents warning signs if your costs are looking higher than your profit. This helps you solve it before it becomes a serious problem and equips you to avoid this issue on the next project by changing your hourly rate or providing employees with extra training.
To understand earned revenue, think of it this way: Of the total hours worked on a job, how many are actually billed? Are you writing off hours, and if so, why? CORE tracks earned revenue, so you can reduce non-billable time and determine how to work more productively.
CORE captures billable hours in real-time so you can monitor and manage how efficiently your team is working. If you’re still tracking this metric manually, you’re wasting valuable time and adding another administrative task to your plate. Not to mention, you may not be monitoring it as accurately as software can. Correcting billing errors wastes staff time that you would have otherwise spent on billable client work.
Billings Per Person
Do you know how much revenue your staff generates? This information is critical in evaluating your team individually and as a group. If your average billings per employee are down from last year, do you know why? If one person isn't generating the same revenue as comparable staff, additional training may be needed.
Tracking each employee’s billable hours helps you understand each person’s productivity level and exactly how much time they spend on project-critical tasks compared to administrative work. A project management tool like CORE can help you automate some of those menial tasks related to billing, reporting, and time and expense tracking, so your team remains focused on client-facing activities. Your firm can customize CORE’s billing and reporting by setting up rate tables and fee schedules built for employees’ specific billing rates.
Billings per person is helpful for client transparency too. While it’s unlikely you’ll bill them by showing an itemized, per-person breakdown of project work, you'll have them ready to share if they ask you for more details. With CORE’s detailed billing breakdown options, it’s easy to create accurate documents that show exactly how much of your firm’s time, effort, and resources went into work for a client.
The project data you gain from using time tracking software helps you understand which KPIs to track for your firm and how to optimize them. Using timesheets and related metrics can help your CFO and finance team maximize your revenue, properly price your services, and evaluate and manage staff.
A project’s success (or failure) can usually be tied to budget, scope, or schedule. Exceeding estimates for any of these will impact profitability. To prevent projects that lose money, you need to break down each area into definable metrics that you track.
Such metrics might be project overrun (the percentage above budgeted cost or time compared to a project’s actual cost or time), margins, utilization, and retainer balance, among many others. Tracking measurable metrics using an accurate method like CORE takes the guesswork out of project management and financial forecasting.
Software with receipt capture allows you to scan a business receipt using your phone, then automatically creates time and expense report entries with precise, pre-filled data. This function saves you time, lets you record receipts on the spot before misplacing them, and eliminates errors that often occur during manual data entry.
CORE’s mobile app lets you scan receipts using your smartphone then instantly populates expense reports with this information, no matter where you are. Based on your recorded receipts and other reported expenses, CORE learns your firm’s patterns and categories related to project expenses, knowing exactly which project phase or vendor an entry belongs to.
Receipt capture is helpful for managers because it makes reviewing expenses seamless. Expense dashboards in CORE enable you to monitor company and employee spending. CORE integrates with your accounting software, so you keep records of project spending and prove that your expenses are tax-compliant.
A cloud-based, centralized platform for time and expense tracking, accounting, billing, and more gives your firm’s leadership the accessible data they need to understand key financials and make savvier business decisions.
Time Tracking Software with BQE CORE
With CORE by BQE Software, managers can easily track employees’ time and productivity with pinpoint accuracy. This technology can record and calculate statistical trends and patterns for individual employees and employee groups based on timesheets, enabling managers to better monitor projects, activities, budgets, and resources for the overall project.
CORE is an award-winning, cloud-based solution built for professional service firms across engineering, architecture, consulting, law, accounting, and more, with powerful capabilities that simplify and strengthen project management, billing, accounting, and time and expense tracking.
Popular CORE features include pre-populated, customizable timesheets, receipt capture, recurring invoices, smart timecards, GPS tracking, and automatic invoicing. Start your free trial of CORE today to boost project profitability and streamline your business processes.