Whether the agency works on a fee or project basis, the way the agency makes money is by calculating how many hours the job will take to complete the given tasks. The agency becomes profitable when a fair amount of hours are estimated and a fair an accurate amount of time is used and billed to the client.
Although the agency can have a idea of how many hours a job may take to complete, it is still an estimated amount of time. Therefore it is in the agency’s best interest to be aware of the amount of time being accrued to a job. Time sheets and time/task recording are the fundamental source of determining the revenue that the agency earns. It provides important financial, administrative and managerial information. Time entry can show and compute staff time charges for each of the clients, ascertain individual or group utilization and to analyze the profitability of client relationships.
Therefore, the agency should follow some simple guidelines for recording and tracking their time:
• Time sheets should be done daily and handed in at the end of the day (or entered into your agencies accounting system) before 10 A.M. the next morning. The sooner timesheets are done,
the more accurate and fair they will be.
• Time sheets should record a set amount of billable time each day, minus the time for a lunch break. For each work day, a goal of 7.5 hours of billable time should be met. Bill in quarter hour units. If your staff is working on non-billable time, record it, but have them break it down. Did they work on new business? Did they work on the agency portfolio? Having someone putting down 3 hours during the day for "admin" does not show what they worked on.
• If someone works early, late, or on the weekend, the time should be recorded for the additional hours worked for that day. If an empolyee worked 11 hours for one day, they should record all the time spent.
• Make sure that you properly record the correct job number and task on the time sheet. Be aware that the time you put on your timesheet becomes a permenant (and auditable) record that will be used and in some cases, shown to the client.
• Avoid having the staff use any “fee” or “catch-all” job numbers, it is easier to justify and negotiate additional costs with a client if a clearer record of how time is spent on individual jobs during the month. This can be an invaluable tool for estimating future jobs or reporting clear overs or unders to a fee based client. Many clients have "it-will-take-you-ten-minute" requests that turn into "ten hour" billable requests.
• Time spent on meetings should be applied to the jobs discussed. This is important on clients who rely on "project based" work. In some cases, on fee accounts, a number can and should be provided for client status meetings, or client presentation meetings.
• Travel time to a client or for client business is billable.
• Non-billable time would include, time spent working on new business plans, administrative time, company meetings, company promotional projects and time off, such as sick, personal and vacation time.