Agency time tracking software: why and how to track hours

What does agency time tracking software do?

It records who worked on what, and for how long, then adds the hours up by client, project and person. A good setup lets you hold those hours up against what each client pays.

What to track

Each time entry needs a few plain details:

• The client
• The project or retainer it belongs to
• The task, such as a first draft, a round of changes or a report
• Who did the work
• The hours
• Whether the hours count toward the client's fee

How often to log hours

Log time the same day you do the work. It's easier to get the hours right while the task is fresh, and a quick daily habit beats a long Friday afternoon of guessing.

1. Start a timer, or note the hours, when you switch to a new task.
2. Tie every entry to a client and a task before you close it.
3. Check your own day's entries before you log off.
4. Once a week, look over the team's hours for gaps and odd entries.

Questions to ask before you choose one

Ask these about any tool you're weighing:

• Does it tie hours to a retainer or a monthly fee?
• Can your team log time in a few clicks, from a phone too?
• Does it export to the tool you send invoices from?
• Can you see hours by client and by person on one screen?
• Can people log time against a task, not only a client?
• Will it run alongside the project tool you already use?

If a tool is hard to use, people skip logging, so test it with your team before you commit.

Why do agencies track time on retainers?

On a retainer, the hours show whether the work still fits the fee, and they feed next month's plan. Without them, a retainer can grow past what the client pays and nobody notices until the margin is gone.

Here's a simple monthly routine:

1. Set the hours you planned for each client's fee.
2. At month end, compare the logged hours to that plan.
3. Flag any client who ran over, and look at which tasks caused it.
4. Bring the hours to the client when the work has grown, so you can talk about scope or price with facts in hand.

Those hours are also what you build the next fee on. For working out the monthly fee, see how to set a retainer fee.

The same hours, added up across the whole team, also tell you how full everyone is. For the number that says you're full, see the agency utilization rate.

Is creative agency time tracking any different?

The tracking works the same way. Creative work adds review rounds and changes, so log those apart from first drafts, and you'll see how much time a change takes.

Questions to ask about your own setup:

• Do you log a first draft and each round of changes as separate entries?
• Does each round of changes note who asked for it?
• How many rounds does each client's fee cover, and do the hours match?
• Are internal reviews logged too, not only the client's rounds?
• Do you log time spent on new ideas that never go to the client?

If one client's changes take far more time than the others', that's a pricing or scope talk, not a tracking problem.