Professional services organizations (PSO’s) of all sizes and from all industries struggle to track service hours in a consistent and accurate way. Many organizations use tracking protocols that are inefficient and create challenges for accounting and finance departments. Often these protocols are spreadsheet based and not standardized. As a result, excessive time is spent on consolidation and organization, with hardly any time spent on strategy and analysis.
In many cases, organizations don’t realize where their billable hours are going and that small factors can make a big difference in accurate reporting. The following are examples of some of the small factors that lead to inaccurate time reporting:
- End of month time tracking: Many people have trouble accurately recalling the hours they worked at the start of the month by the time they submit their hours at the end of the month. Not everyone keeps personal records of their hours and those who don’t rely on memory and guesses.
- Time entry is late: When time entry is delayed because of vacation, technical difficulties or other causes, it is not always clear when submission deadlines are postponed to. As a result, employees may neglect to submit their time because they are unaware how and when they should.
- No standardization: Without clearly defined guidelines for tracking time, there may be confusion over what is and is not considered to be billable. Defining ambiguous reporting areas like travel time and administrative work leads to accurate and consistent reporting across the organization.
- Inaccurate manual processes: As with all manual processes, errors can happen unknowingly. Employees may rush through their time sheet or make costly but minor mistakes when reporting.
Many real-time, accessible and centralized time entry systems are available to empower organizations. Not only do they streamline and increase efficiency of accounting and finance departments, but they benefit employees as well. With accurate information about their hours, employees gain insight into how they directly affect the bottom line and they gain access to metrics about their project or personal hours.
View the full “Revenue Leakage in Professional Services: How to Quash the Silent Killer of Profitability” whitepaper here.
