There are several ways in which an automated system for time tracking can help consulting firms become more profitable.
We now live in a technological world where tedious tasks can be performed with agility and ease. Computers and software can do most of our work for us, whether it’s filing our taxes or ordering groceries. The benefits we gain—namely, more time and less margin of error—make this kind of technology appealing to businesses as well. In fact, there are several ways in which an automated system for time tracking can help consulting firms become more profitable.
Benefits
• Maximize Revenue
Billable time is the source of revenue for consulting firms. By capturing time, expenses and other services accurately, consultancies can maximize this revenue. The right timesheet system gives managers the ability to create customized interfaces to facilitate employee acceptance and compliance, eliminate double entry errors through online approval routing and integration, and even assign multiple billing rates to a single employee.
• Shorten the Cash Flow Cycle
Timesheet software can also aid consultancies in reporting project developments and ongoing cost updates. All project cost-related data can be entered, updated and accessed in a single system. Accounting can also generate and send invoices at any time in the project lifecycle as well as accelerate the billing cycle to improve cash flow. Not only that, but a web-based timesheet system allows time to be entered from anywhere in the world with an internet connection, which means that invoicing need not be held up until the consultant is physically in the office.
• Information on Demand
Automated invoice reports help consultancies to identify problems and opportunities quickly, and managers will have access to the information they need on the spot, wherever they are. Thanks to real-time billing data, they can track available budget as well as improve customer relationships by providing clients with access to the data. They can also automate calculations by running reports based on customized billing rules.
Not only does timesheet software make life easier, but it has been proven to be more efficient as well. According to a recent study done by the University of California at Irvine, automating the timesheet process reduces errors by 75 percent. Think about what this could be worth to your consulting firm! Automation also cuts down on staff time, so that employees can spend their time more productively, working towards the mission and goals of the company.
Highmark Companies
Highmark Companies, a professional services firm with offices in North Carolina and Virginia, is a great example of a consulting firm that has used time tracking data to its advantage. The company uses a web-based time tracking system to manage 75 employees, consultants, and subcontractors. These employees charge their time, materials, and fixed price projects for federal, state and local government clients, as well as commercial clients. Their time system also integrates with QuickBooks to facilitate payroll, payment of consultants and subcontractors, and invoicing of clients, giving project managers greater detail and more timely information about the projects they manage.
Darrell Smith, CEO of Highmark Companies, says, “We have seen a decrease in overhead costs, a reduction in the administrative burden placed on employees and managers for timekeeping and expense tracking, and the elimination of errors in payroll, vendor billing, and invoicing. Using the right time tracking system has allowed us to streamline our back office processes such that we should be able to grow significantly without having to increase our back office staff. Not only that, but the interface with QuickBooks has eliminated the potential for errors in payroll, vendor billing, and invoicing since all are now driven directly from timesheets that have been entered by employees and reviewed/approved by managers.”
How to Select a Time Tracking System
As Highmark Companies learned, tracking time is not enough to produce the maximum benefits – it is essential to choose the right system. So what does it take to successfully integrate an automated system into a consultancy?
1. Decision: What Do You Need in a System?
The software you choose will affect your entire company, so it’s best to get all of the various stakeholders involved. Bring in staff from all departments, get their input, figure out what your needs are, and then compile a list of requirements. For example, do you need a system that prevents people from tracking time against projects they shouldn’t have access to? Do you need Defense Contract Audit Agency (DCAA) compliance or very accurate IT capitalization data for the Sarbanes-Oxley Act (SOX)? Do you need the system to be rolled out now, as opposed to waiting for a machine to be purchased and transferred to your IT shop? These are all very important questions that you must answer in order to select the right system.
2. Selection: How to Choose
The number one mistake that people make when choosing a timesheet vendor is falling for a deceptive demo. As a consumer, you deserve a detailed demonstration that is customized with your employee list, customer list, project list, company logo and color scheme, as well as shows you reports on your data that will prove to you that your business problem is solved. If a vendor does not make you feel absolutely certain about your choice, then look elsewhere.
You also need to consider issues such as support and trial usage. Ask about the vendor’s automated helpdesk tool, as well as whether the support staff is part of the sales team or not. If they are, you are probably more of a priority as a potential buyer than as a customer. You should also seek a trial version of the software that allows you to use it for more than fifteen days. Wouldn’t you like the ability to run a few payroll cycles using the software before you make your decision?
Another thing that is important to know is whether the vendor sells traditional software or software-as-a-service (SaaS). Since most timesheet software is primarily web-based these days, the ideal provider should do both. SaaS means that you rent access to web-based software that runs on the vendor’s server instead of installing it on a server at your office. There are several benefits to this:
Easier IT - SaaS avoids burdening your IT department with yet another package to maintain. Let them focus on the core competency technologies that drive your company’s sustainable competitive advantage.
Lower Cost/Risk - A monthly fee may be more advantageous than upfront costs. Put the responsibility of rollout success on the vendor. Why take all that risk? Not only that, but some SaaS vendors give you the economic advantage of paying only for the active weekly usage.
Easy Upgrades - The vendor should provide you with a test site during the upgrade process that requires no hardware purchase on your part.
The bottom line is that more accurate billing data leads to more profits by eliminating unnecessary costly errors, and an automated system can deliver that. Never again will you have to worry about billable items being lost or under-represented. You can therefore direct your time and energy towards what really matters – your core business strategy – for continuing success and growth.
