Time tracking software has the potential to transform how professional services firms operate. As opposed to manually cobbling together deductions based on past events, professional services organizations (PSO) can take advantage of real-time data generated by time tracking software. This provides accurate insights on what is happening at present and what might happen in the future.
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This eases the process of decision-making, especially when it comes to making those decisions that relate to managing resources, keeping the project on track, maintaining profit margins, and improving customer service.
5 Way Time Tracking Software Improves an Organization’s Success
Well, let’s explore more on how time tracking tools can help professional services and businesses get benefits of time tracking software and radically improve their business and services.
1. Help maintain high-profit margins
More often than not, profit margins are thin in PSOs. Real-time data generated by time tracking software help boost profitability by optimizing two critical operating metrics – realized hourly bill rates and billable utilization. For instance, if you can see in real-time the number of hours being billed to a particular project, and you realize that billing is running lower than estimated, you can intervene right away before the issue escalates and negatively impact the organization’s profit margin.
In other words, organizations need to make those crucial adjustments in real-time, when they can still control the situation, as opposed to waiting until the completion of the project, when it will probably be too late. If at all, a PSO has not invested in a time tracking solution, then it has no capacity to get that type of end-to-end visibility or transparency into billing and profitability.
2. Utilize resources effectively
Scheduling the right team on the right project assignments at the appropriate time has traditionally been an issue for professional service firms. Prior to the advent of modern time tracking software, managing resources was a labor-intensive and error-prone process. PSOs would have to wait until, let’s say, end-month to get reports highlighting how their resources performed, like where they were spending more time than anticipated, where they were falling behind on projects, or even where they exceeded expectations. By then, it was usually too late to make any significant adjustments.
Thanks to the data generated by resource planning and time tracking tools, organizations now have much better control over resource utilization. For example, at any given moment, managers can see which resources are sitting idly, doing nothing and which ones are stretched to the breaking point. Thus, they can make the necessary changes on the spot and immediately resolve staffing challenges – before they get to uncontrollable levels.
3. Generate reliable forecasts
With the help of time tracking accurate data, PSOs can forecast accurately and operate their businesses with confidence and predictability. Some years back, forecasting was mostly a hit-or-miss affair. For instance, when planning a project, managers would have to physically check everyone’s schedule to identify which resources would be available in a particular period.
However, with time tracking software in place, managers can not only see what is happening at the moment but also analyze past data linked to the project in question. In essence, insight into this historical behavior can help organizations come up with estimates for future projects that are based on accurate data.
Past realities are the ideal predictors for future performance. The more data you gather from the time tracking solution, the more reliable and precise those estimates will be. It goes without saying that more exact, informed estimates help PSOs craft realistic proposals, and pave the way for timely project delivery and satisfied customers.
4. Accurately match supply and demand
Again, real-time visibility offered by time tracking software shows a true picture of the resources at an organization’s disposal. The beauty of these real-time analytics is that PSOs can quickly and correctly gauge client demand and then decide from where to pull the extra resources to meet that demand.
With the help of a time tracking system, organizations can tell what their resource pool is doing at any given time, and they have high visibility into how much those resources can be deployed in the future. This level of visibility is not possible, especially for PSOs that are still relying on manual strategies to match supply and demand.
5. Transform the payroll process
The American Payroll Association (APA) approximates that, automation minimizes payroll processing costs by as much as 80%, much of that from reducing inaccuracies relating to invoices and paychecks.
By using a work timer application, professional service organizations can automate their payroll processes, cutting down the time and effort they need to input data. Basically, if organizations know precisely how much time was spent on each assignment, as well as which team member(s) worked on a particular task, it will be a breeze to compute wages, salaries, bonuses, and deductions.
Most notably, time tracking is among the most realistic ways organizations can ensure they comply with the Fair Labor Standard Act (FLSA). By accurately tracking employees’ time, they can avoid expensive and unexpected wage and hour lawsuits. A time tracker gets rid of confusion usually associated with overtime hours. Moreover, it guarantees a readily accessible audit log for records and provides managers with accurate employee time data so that they can make rational decisions when it comes to restructuring and reclassification.
The bottom line
Most professional service organizations aren’t thinking of all these issues when they go shopping for time tracking software. Usually, there is one pressing need they are looking to address, like improving the employee scheduling process. What they do not understand is that they are not just solving a single problem – instead, they are streamlining their entire business operations!
Time tracking allows organizations to make smart decisions about how they run projects, price services, and make accurate forecasts. The only thing that hinders some organizations to adopt time tracking is the fear that their employees won’t embrace the idea entirely. It is not unusual for a few members to oppose the plan; but, there are tips you can always implement to calm those fears and get them onboard.
All said and done; organizations should take the presumptions and guesswork out of their time tracking the process, and adopt a cloud-based time tracking solution which is reliable and accurate. It has never been this easy to track billable hours, make estimates, and understand inefficiencies and wastefulness within the organization.