Three profitable reasons why you need a timesheet system

I spent many years working in a professional services firm and one of the tasks that I least enjoyed was completing my weekly timesheet. As I progressed in the firm however I reluctantly came to understand why we couldn’t run the business without them. That little insight did not help me to like completing the timesheets, but it certainly got me to do it.

I was reminded of my inner tussle with timesheets recently by three businesses that, despite enormous initial reservations, started timesheet systems for their staff. The results completely proved their worth; all three business uncovered information that prompted the senior team to change the way they did business. Here are their stories:

Company 1 had two distinct sales channels: channel A where the business responded to tenders for already scoped projects and channel B where the business created ideas for projects and then sought sponsorships. Channel A was a much easier concept for the sales team to grasp so there was a heavy slant on chasing channel A work. However when the business started to keep timesheets, (and costed in the total time of the project including sales time) it became very clear that channel B work was much more profitable than channel A and, surprisingly, actually took less “sales hours” to win. Accordingly the company has now refocused itself around selling channel B work.

Company 2 already had a timesheet system in place but staff only recorded time spent actually implementing projects. When they started to include the time spent managing the client (stuff like answering little out-of-scope queries, chasing cash and general nurturing) it became obvious that one of their largest clients was sucking up an overwhelming amount of time and was actually their least profitable assignment. The result? It wasn’t easy but last week the client signed off a substantial fee increase.

Company 3 had a tendency to start many new projects but finish none. The staff enjoyed the thrill of exploring new ideas but lacked the urgency to progress the ideas through to the revenue generating stage. When the business started to keep timesheets and track the time cost of the new projects the extent of the investment in half finished projects was clear for all to see. Senior management has now changed the employee reward structure so as to shift the emphasis from idea creation to revenue generation.

So it is with a mild sense of irony that this week I urge you to consider adopting a timesheet system. It might not make you popular but it could make you a lot more profitable.

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Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).