4 Reasons to Track Time on Projects
I haven’t punched a clock in more than 10 years. And even when I did, I never cared much for the idea.
I guess I didn’t like the message it sent out: that I was being paid for my time — not for my ideas, creativity, excellent customer service and added revenue for my employer.
I still feel that way as a freelancer. I believe my clients hire me for my insights, ideas, creativity, results delivered and commitment to their success, not for my time.
If time is what you’re after, you can buy time anywhere (and for much less!).
That’s a big reason why I don’t price most projects by the hour. Instead, I quote flat fees 95% of the time. I want to keep the focus on the project deliverables, not on the time I’ll spend doing the work. Plus, I want to take on some of the risk and not create a scenario in which the invoiced amount is a big surprise to the client.
However, I still track time. Even when doing flat-fee work, I find that there’s tremendous value in knowing how much time I actually spend on every project. Specifically, a good time tracking system provides me with:
1) Better pricing intelligence. Knowing how much time I spend on projects enables me to adjust my project fees as I learn what it takes to get the job done right. It also helps me see which types of projects and clients are profitable, and which are not.
2) More accurate scheduling. When I know the average time a certain type of project will take, scheduling becomes a lot easier. I don’t have to guess. I can just plug in an average into my schedule and add a few extra hours as a cushion. That means I’m not always scrambling to get the work done, and I’m not turning down work because I’ve overestimated my current workload.
3) Clearer visibility into monthly billable time. If you haven’t tracked your time before, you will be shocked when you start doing it — shocked at how little billable time you actually have every week. I used to think that 90% of my time was spent on billable work. But it was closer to 65% when I ran the numbers. Now, that doesn’t mean that I have to work harder. It just means I have to face reality first, then dig deeper to find opportunities to increase that percentage.
4) Greater discipline. As much as I hated that old punch clock, there’s something about knowing that I’m “on the clock” that makes me work more efficiently. Sure, you can’t rush creativity. But that’s not what I mean. I’m talking about the distractions. When I’m tracking my time, I know I want to end up with an accurate time estimate for every project, so I avoid surfing the web, reading the news, watching TV or checking Facebook and Twitter.
In terms of time-tracking tools, there are a few good ones out there. TraxTime is one. It’s not the best tool for report generation, but it’s super easy to use. Mac users have other options. We keep hearing that On The Job from Stunt Software is a great option.
Freshbooks is also very popular among freelancers. It’s actually an online service that integrates time-tracking, invoicing and bookkeeping, for which you pay a monthly fee.
Pick one that works for you. And learn how to use it strategically to improve your business.
OK, gotta go clock out. See you next time!
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Time is money. Once you figure out the average amount of time it takes you to complete a project, you’ll be able to work smarter. While we don’t always like to think that we are getting paid for our time, reality is we’re getting paid for a service, that turns into a product, that took time to create. I agree that tracking your time is important. If for nothing else, it will make sure you have enough time to complete your projects without completely losing your mind!
Thanks for sharing; I will check out the time-tracking tools you provided.
Former Freshbooks guy, now using Billings 3. I guess I just like having a desktop app for this kinda stuff. Also like that it will automate somethings for me: For example, if I get interrupted and have to leave the computer for a bit, Billings will notice when I go idle and offer to remove that time from the clock.
Tracking time is very important when you get to quote a project precisely, that’s why I do it for all of my projects and at the end I always know if I have undercharged and I should increase pricing.
Plain old excel works really well for me, without being fancy or dependent of time tracking tools.
Strongly agree to your point #4: more discipline!
I use http://mite.yo.lk/en/ since day one of my freelancing and it really helps me stay on track (I’m not affiliated with mite, just a happy customer).
I almost never charge hourly, but I do agree that tracking your time will help you choose how much to charge in the next project.
Although of course theres always the risk of getting paid 2.50$ and hour when it turns out that simple project you though was a quickie, is now a very elaborate one.
I use Office Time, which works for both PC and Mac, is incredibly easy to use, and has a free fully featured 21 day trial. (And a money-back guarantee – that’s my kind of software.)
It can be both really interesting and financially advantageous to see how much time you spend on a given project type.
I’m a translator and proofreader, and proofreading doesn’t pay very well per word. So I was thinking of abandoning these “low paying” projects. However, after tracking my time consistently, it turns out that it takes me a LOT less time to do a proofreading project than a translation one, in terms of words processed per hour. So it actually works out that proofreading pays a good bit more than translation – it’s just not as much fun!
You make a great point here. The info these tools reveal can make you nervous. So just be careful not to fall into the trap of “Hey, I’m already over time on this project. I need to wrap it up!”
My suggestion when that happens is to focus on doing a great job on the project. That’s your top priority. Don’t rush through it just because you’re over-budget on time. Once you’re done, THEN go back to see why it took so long.
I was really foolish and didn’t track my time for years and years (I was young, no kids, no wife, etc). I got by just fine. But now? Eh, a little different. I’ve really needed to step up my game. So I’ve been using a combination of manual logging and RescueTime to keep track of how much I spend on projects. So far it’s worked but I’d be willing to try out other software I hear about in the comments.
I find time tracking invaluable information for analyzing my efficiency and keeping track of my data. The first week I started using a time tracker, I absolutely loathed it and kept forgetting to keep track of when I finished tasks or switched tasks. After about a week, I was able to incorporate it into my workflow.
After trying a few different time trackers, I’ve chosen ManicTime for my time tracking needs. I’ve been using it for about 6 months and I find it is the best fit for my workflow.
Tracking time is essential. I use Toggl.com. Not the tool with the most features, but more then enough for me. I think it is great.
I’m still trying out Rescue Time and I’m beginning to see a few surprises on how my working hours are being used.
Brilliant post! thanks for sharing
I totally dislike the idea of having a schedule, especially since my jobs were always “special”. So, only this idea makes me cringe.
And still, not having a clear schedule, with deadlines and marks of each step and the time it takes to make it, has almost brought me to disaster. So, the moment I started freelancing seriously, I started planning, keeping time and records, making schedules. And, you know, it works.
Good post
I stopped charging by the hour 3 years ago and while the intial transition was worrying (for me mainly) I would never go back to hourly billing (I couldn’t afford to as my income ahs increased by 150% and time spend decreased by 20%). I focus on charging my clients for the value of my outputs to them, not on the inputs, i give them three options of differing value (most >80% take the more expensive option C – trick is to articulate the true value to the client, not just sales spin). —Thanks to Alan Weiss for my change of mindset.
I know the above stats because I track the time for each of my projects using Paymo (which is free for sole pratctitioners) – they even help me with support on the free plan – pretty amazing nowadays.
My accountant has set me up a way by using my fee (less expenses) and the amount of time I actually spend to work out an actual earning rate per hour. this lets me determine which type of projects and clients I get a better return on (not that I always focus on the high value ones, some of the low earning projects I do are more interesting – after all self employment is about freedom to choose!). this type of intellegence in my business planning is vital.
Cheers
Gary
I just finished reading The Wealthy Freelancer and still remember the section about the benefits/importance of tracking the time it takes to do a project. I always thought working hourly was the best job nature to work (thank my experience with bidding sites for this) and that the time tracker is for this purpose alone. But ever since I read that chapter, I’ve come to appreciate project pricing more and am now looking at my time tracker (I use Tickspot) a whole lot differently.
Hi Stephanie! Glad to hear the book had an impact. Thanks for your comment.
I just finished The Wealthy Freelancer and still remember the chapter on the benefits and importance of tracking the time it takes to do a project. I always thought that tracking time for hourly payments was the best job nature for me (thank my experience with bidding sites for this), but ever since I read that chapter and this post I’ve grown to appreciate project pricing more and am looking at my time tracker a whole lot differently now.
Technical note: All 3 links in this article are broken.
Also: check out http://letsfreckle.com
Great comments, everyone! Sounds like many of you agree that tracking your time is a necessary evil — and that the benefits go beyond the obvious stuff. I view time-tracking as part of running your freelance practice more as a business. When done right, it will improve your income without negatively impacting your creativity.
I like the concept behind billings three. That’s my biggest problem when it comes to tracking time. I always end up leaving it running when i walk away from the computer and have to go back and fix it.
I actually use Harvest: http://getharvest.com
It’s a time tracker and I can create estimates and invoices with it and even keep track of them (send reminders etc.).
I have been manually tracking my time on paper and then inputting that into a database for years. I like the flexibility of writing it down on paper without having to keep switching between applications to update an entry but it’s also double the work. I regularly get so caught up in my work that I find I am always trying to play catch up with writing down what I was working on. I am looking for a program/utility that would offer some sort of discreet popup window at predetermined intervals, 15 or 30 minutes, that would allow me to (force me to
track what I am doing at that moment. It could allow me to continue tracking what I have been working on or allow me to switch to a different project with a few clicks or key commands. There are many timer applications out there but they require you to remember to start timing each project.
As a Cinematographer working in the field and visual effects artist working at a workstation, the best I’ve found so far for Invoicing and Time Tracking is ‘Billings3′ (http://www.marketcircle.com/billings/). It works well for estimates and invoicing, links to my Address Book, and most importantly it has a timer for whatever project I’m working on. The reason I chose Billings, is that if I’m in the field on a shoot, I can run a timer on my iPhone linked to the project. Later, when I go to do Post Production on the shoot I can run the time on my desktop. If I go “AFK” for a few minutes (need Starbucks or maybe just a 10min sanity break), it’s pauses the timer and refunds the time back to the client.
As Ed said, Time Tracking can be really helpful and the “AFK” sessions or distractions always forced me to steer clear of time clocks. The smart timer that Billings has allows me to be flexible without having to worry I called it a night and forgot to shut the timer down.
I agree with Ed that time reporting is a pain. However it is extremely important in order to measure your effectiveness on different projects and to make sure you get paid enough for your efforts. I think most of my disliking of time reporting tools stems from reporting time in ERP:s like SAP where you needed to keep track of about 100 cryptic project codes no one knew the meaning of.
As a freelancer I started out using spreadsheets but that turned out to be quite messy as well since I had to use a number of different computers and was never able to keep that file updated.
I have just recently started to use a new web tool, http://www.trackintime.com that solves most of my problems. I have recently been working as a project manager and using Track in Time and can keep track of and evaluate my time as well as the time spent by my project members. One other nice feature that I use a lot is the estimation function which helps me to compare my estimations for different activities with the actual outcome.