For project-focused firms, the cost of production is a critical factor when looking to improve margin efficiency. While no one tactic will solve the challenges presented by narrowing margin once and for all, there are times when it’s beneficial to look at the fundamental factors that lead to project inefficiency, overservicing, and underquoting.
Start at the beginning: time tracking workflows are a critical practice to examine when project margins fail to meet expectations. When your development team is finished with a task, they are expected to track their time – but anyone in a project-oriented company knows that this is not always simple.
Factors that Reduce Billable Time Tracked:
Double data entry
When your project management software operates separately from your finance and operations software, production teams may be expected to track their billable time in a standalone app or sprint management platform that records task and project progress, as well as in an ERP software that enables finance and account teams to manage contract lifecycles, billing, and payroll.
Standalone time tracking system
Even single-source data entry can be a challenge for teams to maintain, when that time is handled in a system that isn’t otherwise integrated into a contributor’s day-to-day workflow. Handling time tracking in a browser or software application can lead to inaccurate time tracking taken care of after-the-fact, like at the end of a day or week – the wider the gap between the work being done and time being tracked, the higher your margin for error.
Cultural disconnect between time tracked and project margin
In companies with a focus on project completion and little time to measure margin, a vicious cycle can develop: tight timelines create project crunch, and once the work is done your teams move on to the next. When projects are poorly tracked, margin is poorly managed, putting pressure on everyone to hit more milestones and bill more work – but data may not be presented to the team with the right context around margin and profitability.
How to Eliminate the “Forgotten Fifteen”
A second common thread in project-based companies is the need for flexibility and problem-solving skills. T this can mean answering a client question or making a small adjustment to a deliverable – time that won’t be logged, if there are too many barriers to time tracking for small tasks. We call it the “forgotten fifteen”, to put a name to all the little tasks that don’t make it into a team’s billable hours.
For companies using or Finance & Operations, toolset includes integrated time tracking with JIRA, Azure, and Outlook to simplify time tracking and capture the full scope of billable hours that have been worked for a client project, including minor tasks and quick meetings.
The result is more accurate billing, increased billable hours, better capacity data, and effective project quoting. Learn more about how tracking the forgotten fifteen can build a foundation for higher operational efficiency in .
