As a small business owner, accurate project time tracking is crucial for ensuring profitability and maintaining good relationships with clients. This is especially true if your business is directly tied to billable hours such as consulting, architecture, or contractors.
For these businesses, the old proverb “time is money” becomes literal as the risk of underbilling, overbilling, and underestimating time-based projects can cost your business revenue, client relationships, and, perhaps ironically, precious time.
Luckily, there is a multitude of tools and resources available for your small business to ensure accurate time tracking and long-term success. By utilizing the correct accounting software, such as Intuit QuickBooks, you can improve your time-tracking process and easily identify areas where improvements can be made.
The Pitfalls of Failing to Track Time Properly
Failing to track time properly can lead to a variety of potential pitfalls for small businesses. From underbilling and overbilling to problems with payroll and loss of productivity, inaccurate time tracking can damage your reputation, cost you money and hurt your ability to succeed.
Let’s take a look at this one by one to see exactly how they can damage your bottom line.
Perhaps the most obvious of these is underbilling, which can be disastrous for profitability. If you’re not accurately tracking the time spent on each job, you run the risk of missing out on revenue that you rightfully earned. Even worse, clients may notice the discrepancy and decide to take their business elsewhere, damaging your reputation and costing you even more in the long run.
However, underbilling isn’t the only pitfall of failing to track time properly. Overbilling can be just as damaging, if not more so. People may remember when they got something for a steal, but they will always remember when they’ve been overcharged or just ripped off.
If you’re not accurately tracking the time spent on each job, you run the risk of charging clients for work that was never performed. This not only damages your reputation, but it can also lead to legal trouble and loss of business.
Inaccurate time tracking can also lead to problems with payroll. If you’re not accurately tracking the time that employees spend on each job, you run the risk of underpaying or overpaying them. This can lead to unhappy employees, low morale, and even legal trouble. In fact, one study found that over 49% of employees will look for a new job after experiencing two issues with their payroll.
Loss of Productivity
Another potential pitfall of failing to track time properly is productivity loss. Without accurate time tracking, it’s difficult to know how much time is being spent, where it is spent, and where improvements can be made. This can lead to wasted time and resources, which can hurt your bottom line and your ability to grow your business.
Tracking Small Tasks Makes A Big Difference
When it comes to time tracking, it’s easy to focus on the big picture— how much time is being spent on major projects, for example— and overlook the small tasks that can add up over time. However, accurately tracking even the smallest tasks can make a big difference in overall productivity and profitability.
Consider the time spent on tasks like replying to emails, attending meetings, or completing administrative work. In other words, tasks that you may not even think about in the grand scheme of things. One study estimated time spent on emails costs companies up to $50,000 per employee every year!
These tasks may seem insignificant on their own, but when added up over days, weeks, or months, they can account for a significant portion of an employee’s time. Accurately tracking this time can help businesses identify areas where employees are spending too much time on non-billable tasks and make adjustments to improve efficiency.
Accurate time tracking can also help businesses better understand the true cost of delivering their services. For example, if a consultant bills at a certain rate per hour but spends a significant amount of time on administrative tasks that are not billable to clients, the actual cost of delivering their services may be higher than initially thought.
Navigating Complexity: Time Tracking with QuickBooks for Multiple Jobs and Tasks
Accurate time tracking is essential for businesses of all sizes because it provides a clear understanding of where your time and resources are being spent. However, accurate time tracking can be especially complex for businesses that track time across multiple jobs and tasks.
Thankfully, QuickBooks offers a powerful solution for businesses struggling to track time across multiple jobs and tasks. With QuickBooks, businesses can easily create and manage project budgets, track employee hours, and generate accurate invoices for clients. By using the various programs in the QuickBooks lineup, businesses can streamline their time-tracking process, reducing the likelihood of errors and improving overall efficiency.
One of the key advantages of using QuickBooks to track time is its ability to integrate seamlessly with other business tools. By syncing up with project management software and other productivity tools, QuickBooks can provide a comprehensive view of how time is being spent across the business. This allows managers to make informed decisions about where to allocate resources and identify areas where improvements can be made.
QuickBooks Time Tracking Reporting
Another advantage of using QuickBooks to track time is the ability to create detailed reports that provide valuable insights into how time is being spent across the business.
By generating reports on employee hours, project budgets, and more, businesses can gain a better understanding of how their time is being used and identify areas where efficiencies can be gained.
Accurate Time Tracking Boosts Your Businesses’ Success
By accurately tracking time, your small business can gain valuable insight into employee productivity, project budgets, and overall profitability. This information can be used to make informed decisions about where to allocate resources, identify areas where improvements can be made, and streamline operations for greater efficiency.
At MISSION Accounting, we understand the importance of accurate time tracking and its impact on business success. That’s why we offer comprehensive accounting and bookkeeping services, including QuickBooks setup and training, to help businesses get their finances in order and streamline their operations.
Our team of experienced accountants and bookkeepers can help businesses set up QuickBooks and other time-tracking software, ensuring that time tracking is automated, accurate, and tailored to your specific needs. We can also provide ongoing support and training to help businesses get the most out of their accounting software and make informed decisions based on their data.
Contact us today at (203) 227-9475 to schedule a complimentary consultation!