Merge

There seems to be a lot of discussion regarding time tracking--should a creative professional track their time? Truthfully, I think the real debate is should a creative bill by time (the hour) or should they bill for value? I would agree the latter is the better way, but for this post, I'm going to highlight why time tracking is essential to the success of the creative professional (and almost any other service professional).

When Merge was but one (myself), I didn't think I had to track my time because I could remember and manage billings in my head. Then I read an article in Inc. that discussed "shrinkage" (not the Seinfeld type, but the inventory type). Shrinkage is the loss of billing due to forgetting to bill for something.

I wondered how much shrinkage my company had. So I did an experiment and began to track my time. Almost immediately, I increased my billing by 20%. Whoa. All of those little "quick fixes" were suddenly being captured and therefore billed for. Before tracking my time, it was as if the service was never provided.

Another benefit to tracking time is that I soon discovered I was giving projects away. Before, I'd quote a project and as long as it took, is how long it took. Never mind profitability. But once I started tracking my time, I quickly learned I was woefully under-pricing my projects.

To remedy this, I nearly doubled my project price--or in other words, I was doing projects at about half the price I should have been doing them for.

Overall, tracking my time increased both my top line and bottom line. I helped me estimate much better, therefore, providing a fair price and a great project experience (nothing will make a project worse than one that's misestimated--that's a lose-lose).

But there were also side benefits. Tracking my time showed me how much time I wasted every day. When you have to account for a minimum of 8 hours per day, and you can only come up with 5, where did those other 3 hours go? Tracing my time made me accountable - to myself. In order to make sure I could record 8 hours per day, I began to plan my days. This resulted in me being more more efficient and effective.

The downside of time tracking is that it takes time and it's a laborious bore. However, I think the benefits far out-weigh the cost of entering one's time. Another downside that I previously mentioned is that it gets us into the mentality of charging for time instead of value (how I think we should charge for our services)--and I've yet to figure out how to do that well.

So, those are the benefits of tracking time that I enjoyed when it was just me as an employee. Now that Merge is 7 times as big, the benefits are exponential. We would lose thousands of dollars every month in missed billings if we didn't track our time. We would have no clue if a project was profitable and therefore we couldn't learn the lesson to change estimates or improve our budgeting process. Lastly, we would be woefully inefficient because employees wouldn't be accountable for the how they spend their own time, day in day out.

Tracking time is a no-brainer for a creative professional firm. I think the reason most firms and employees resent tracking time is that they're creatively oriented and not administratively oriented--which is understandable. At the end of the day, tracking time in an organization is a discipline. But it's one that is indispensable based on the numerous benefits that will be realized.

To track or not to track? That's no longer a question.