Ever been chin-deep in project budgets, proposals, job costing spreadsheets, print collateral for a client running a special promotion on Monday, and this week’s leadership KPIs—all while in the middle of a brainstorming meeting about how best to promote a new line of gourmet chocolate ice cream?
We have, too.
Small creative agency life is exhilarating, but it’s not without its stressors. You’re juggling the logistics of managing projects and budgets alongside creative branding initiatives. Your world is fast-paced, and you’ve got to be able to keep up with it all.
Which means your time is your most valuable asset. As a small creative agency running multiple projects likely on multiple budgets, you have to know where your time is going so you can not only use it more wisely, but more efficiently, too.
This is where agency time tracking is a must. Time tracking can make or break your agency business. It can be just the thing that makes you stand out from the competition, ensuring project success and client retention. Tracking time is more than just recording hours. It’s also about figuring out how the time spent by your team adds value for your clients and your business. Without it, you run the danger of budgets blowing out, projects going out of control, and your team burning out.
The Importance of Creative Agency Time Tracking
Why is time tracking for a small agency important? Great question. We’re so glad you asked. This data can provide you with so much crucial information—from how much time your team is spending on a single project to knowing when it’s time to hire… or cut back. Knowledge is power, and without great knowledge, comes too much responsibility.
Client Billing Accuracy
If your agency bills on actuals, then you have to track your time. Otherwise, you’re billing a client on inaccurate data. In fact, you’re billing them on no data at all. Clients appreciate transparency—if they’re being charged for six hours of time spent on graphic design, then they’re going to want to see that data. Or know that you have that information. This is crucial if you’re billing actuals, whether or not you’re sharing that with the client. Remember how we said clients appreciate transparency? Any inaccuracies can breed mistrust.
Agencies can ensure that clients are billed for the precise amount of work completed by using time tracking to record every minute spent on a project. This degree of accuracy helps minimize overbilling, which could strain customer relationships, as well as underbilling, which can reduce revenues.
Project Management
What team works the hardest and needs the most information? That’s right. Your project management team. Without efficient management of projects, you’re throwing time and money right out the window. Every project requires meticulous budget monitoring, resource allocation, and deadline completion. You can forecast—accurately, mind you—campaign completion times and allocated resources. Agency time tracking nets you successful projects with fewer risks.
Profit Analysis
Here’s a big one. Profit analysis—and not just at the project level, but for your small agency as a whole. In order to track a project’s profitability, you don’t just need to know how many ads were purchased or how much those billboards cost. You also need to have a full understanding of the labor involved, and the cost of that labor to the client and to you. Even if you’re not billing your clients on actuals, you’ve got to know how much time went into the project. Your staff’s billable rates, alongside their time spent, can give you a much better idea of each project’s profit margins. Even better, you can look at all of your campaigns holistically and see where you’re spending most of your time and what services are the most profitable. This allows you to make necessary price adjustments if necessary, or even adjust sales tactics. Branding packages costing you too much? That’s great news. You know now you have to pivot.
And for those of you running on retainer-based clients? This is crucial. You need to know exactly where your time is spent each month so you can plan accordingly. Are your non-profits paying a flat rate every month, but you’re spending hundreds of labor hours during the giving season only to spend tens of hours in the summer? With ad agency time tracking, you can have a deeper understanding of your profitability on that client.
Team Performance
Do certain jobs take more time than others? Where are your teams spending more of their time? Is that because the project itself is time consuming or is because your staff aren’t fully trained on a new process? Agency time tracking can show you trends you never anticipated. Agency directors can determine areas where team members may want more assistance, education, or resources by examining time tracking data. This also aids in identifying high achievers, enabling you to recognize output and assign work in accordance with capabilities.
Resource Management
Another very important aspect of running any successful business is capacity planning. With time tracking, you’re better able to monitor when your teams are underworked and overstaffed or overworked and burned out. By knowing how much time everyone on your team is spending on each aspect of each service, then you can better budget and resource plan for the next project—thus making sure you’re billing your clients accurately.
Common Challenges in Agency Time Tracking
Sometimes getting staff members to track their time can be a little like pulling teeth, especially the creatives. It can be hard to switch gears from creative brain to remembering to track time. But it’s essential to running an efficient and well-oiled marketing agency. But this isn’t the only challenge agencies face when implementing a time tracking process.
Multi-tasking
As you well know, the ad agency world is fast. You have to be flexible and dynamic, meaning your team often finds themselves juggling multiple tasks at once. So how do you time track that? Most agencies we’ve worked with don’t even track tasks that take less than 15 minutes. And oftentimes, you can find some sort of bucket to throw that time into. You don’t need to track your time down to the nitty gritty.
Too many categories
Having too many options for your staff to choose from when it comes to tracking their time can lead to confusion and frustration. As mentioned above, you can throw some time into buckets. For instance, unless you really need to know this information, you don’t need to track admin office wide meeting times separate from morning stand ups.
Billable vs Non-Billable Time
Staff time often doesn’t just include project time. Admin meetings, stand up meetings, professional development, and other administrative duties can take time away from campaign creation and management. Overhead and non-billable time should and must also be tracked. Having an understanding of how much billable versus non-billable time your agency is spending allows you to better glean team productivity and staff utilization.
Resistance to Tracking Time
Yes, you’re going to get some push back, especially if your staff don’t currently track their time. Staff may see this as a burden and extra work. They may feel like they’re taking what little time they have to work on creative projects in order to track time. Be sure to share with them the benefits of ad agency time tracking. Paint them a picture of your agency once you’re able to collect and take action on that data. Let them know how much easier their lives will be when you’re able to forecast and prevent burn out, ultimately giving them more time to focus on things they do best.
Inconsistencies in Tracking Time Processes
Oftentimes, time tracking is left to the individual staff members, but this can lead to inconsistent practices. Some will track time after every task, others at the end of every day, and even more tracking at the end of the week. This leads to inaccurate data telling you a task or project may take more or less time than it actually does. Having accurate data means you’ll need to have consistent data across the board.
Best Practices for Agency-Wide Time Tracking
Standard Tracking Procedures
If you want accurate data, consistency is key. Establish a process in the beginning, as well as what constitutes billable versus non-billable time. Do you want your staff to live-track their time? To track their time per task as they’re working? Or do you want them to log it at the end of the day, so they can spend their time creatively? You might also designate your team leads to ensure this procedure is followed through every day. Set a standard for the team, but it’s crucial leadership follows this practice as well—even if they’re spending 90% of their time on non-billable. If frontline staff don’t see their leadership team following protocol, they’re more likely to slip on their own.
Organizing Your Categories
It’s not enough to just track hours spent on the project. Ideally, you’re tracking how time is spent on each project—not just that time was spent. This is where categories can be helpful. But as mentioned above, you don’t want too many categories. Consider what information is important for the agency leadership team to know. If they were stranded on an island and could only look at a high-level view of time spent reporting, what information would they want to see?
For instance, you might have service-based categories, like “design,” “videography,” “ad management,” and “website development.” But you wouldn’t want to see a massive report showcasing all time spent on “props,” “talent acquisition,” “color grading,” or “craft services.” Don’t forget: too many categories like this can be confusing for the staff when they don’t know where to track what time.
Review & Refine
Setting a time tracking process isn’t just a one and done deal. Just like with any operating procedure, you’ll need to review the process and make necessary adjustments. In the beginning, it’s sometimes easier to introduce your team to the concept of time tracking by having them only track administrative tasks first and then move on to projects, then move on to categories. You may also find that the process you established early on worked for your small team, but then the agency doubled in size in a year and you have to set some new procedures.
Make sure to schedule regular reviews—maybe once a quarter in the beginning and then to once a year. This ensures that you’re fluid in establishing the right process for your agency and team.
Integrate with Your Project Management Software
Make time tracking as seamless as possible by either using the time tracking feature in your project management system or by integrating your time logging software with your management software. Tools like Clickup, Function Point, Trello, and Function Fox all have the ability to track time alongside your projects. Using a software that has time tracking built-in only makes it easier for you and staff members. This kind of integration allows for in-depth reporting and project analysis and will save you tons of time on spreadsheets in the long run.
Time tracking isn’t the most glamorous aspect of running your creative agency. But it’s by and large one of the most crucial. Time drives value, so make sure you’re getting the right data to provide the best value to your clients. Choosing the right system for logging your team’s time is the next step in turning your agency from a functioning one to an efficient and valuable one. That can be just the thing that sets you apart from your competition.
To learn more about how time tracking can benefit your agency, book your no cost demo today! Function Fox’s all in one creative management solution provides tools and years of know-how to help you implement an efficient time tracking process, so you can focus on those ice cream ads and budget reports.