Time Tracking: How to Do It the Right Way

This article is written by our friends at FreshBooks.

In this article, we'll walk through some common pitfalls in time-tracking, and how to pick the right tool for the job. Plus, we'll show you how to get business value from your time-tracking data. Ready? Let's get started.

Tracking time manually

Tracking time manually with a notes app, spreadsheet or even post-it note is a finicky process which makes it hard to keep a complete and accurate record of your time logs for specific clients and projects.

Even if you love working with paper and pen, manual tracking makes it hard use your data for analysis and billing. It's not surprising many small business owners accidentally exclude certain billable hours from their invoices, with an inevitable end result: Lost revenue.

Thankfully, there's a better approach.

Time tracking software

Time tracking software lets you store time logs in one place for easy access. You don't have to reconcile data manually. Some software even provides reports that let you view, at a glance, how much time you spend on different tasks, projects, and clients. But not all software is created equal.

The pitfalls of many time tracking tools

There's lots of tools out there. But a lot of them are frustrating because:

• They provide a one-size-fits-all solution that doesn't cater to a specific market, with unnecessary features you likely won't use
• Many have clunky interfaces which are difficult to navigate
• Some require irrelevant data inputs, making them counterproductive
• They don't integrate with other platforms, so you waste time flipping between apps

So, how do you find the right software?

Characteristics of the right time-tracking software

Here are six things to look for:

1. Easy to use: Find software that's intuitive, has a simple user interface, and fades into the background for distraction-free working. Something with a browser extension is really handy.
2. Links time tracking to your projects and clients: When you rely on memory to bill clients, you may exclude certain billable hours which leads to lost revenue. Use a solution that lets you log time against projects and clients, so you bill for all hours worked.
3. Mobility: You need a mobile app that allows you to record time while on the move.
4. Control: You can control how you track and record time—while you work, after you're done working and need to edit your logs, etc.
5. High-level summaries: Provides summaries of time logs by the day, hour or week, and by client and project.
6. Integration: Connects time tracking with other critical business areas like invoicing so you don't waste time moving between platforms.

Four apps to help you track time

Here are four apps that meet some, or all, of the above criteria:

1. FreshBooks

FreshBooks provides you with all the tools you need to run your business, from one central platform. FreshBooks is a complete cloud accounting software provider that also offers project management and time-tracking software.

The latter feature is ideal for creatives, copywriters, landscapers, web designers, and other service-based business. With FreshBooks time-tracking you can:

• Work without distractions thanks to a browser extension
• Use the app to track time on the go
• Track time while you work or log time after—ideal if you're in a meeting and can't track time
• Track time against specific projects and clients
• Pull tracked time into an invoice for easy billing
• View dashboard summaries for overviews of how much time you spend on different tasks

FreshBooks also integrates with apps like Slack and Trello and is available on the Web and as an iOS or Android app. Pricing starts at $15/month.

2. Hours

If you only want to track time, then use Hours. It offers a simple, yet beautiful, interface. Some notable features include:

• The Timeline feature so you can quickly update time gaps during the day
• Reporting interface which provides a quick overview of your time logs

However, because the software is relatively new, you can only track your time through the iOS app or their website. Furthermore, the app isn't ideal if you juggle several projects or need to create new ones each day. In that case, explore the other options mentioned on this list. The price is $8/month for Hours. You pay less, and get less.

3. Toggl

Like FreshBooks and Hours, Toggl has a user-friendly interface which makes it easy to track your time. Toggl is ideal for freelancers and other entrepreneurs. It lets you:

• Assign time to projects, tasks, and clients to identify time sucks
• Create new projects without leaving the dashboard
• Track time using a browser extension as well as a mobile and desktop app
• View summaries of your time logs thanks to their reporting feature
• Integrate with your most-loved platforms

The only downside is that there's no "in-app" invoicing, although you can integrate with your invoicing platform. Pricing starts at $9/month.

4. Timely

Timely is different from the other solutions in that it automatically tracks your time. Here's how it works:

1. Timely automatically records and groups your activity using a memory tracker
2. Then, it suggests suitable time entries based on this recorded data
3. You check the recommended entries for accuracy and either accept or edit these entries
4. Each time you make an edit, the platform uses artificial intelligence to learn and improve so that it can deliver better results

Other features include:

• A Project Health Dashboard to control your billable hours
• Integrations with your preferred platforms

Timely best suits entrepreneurs who work on lots of different tasks every day—It's challenging to train the platform if you only work in one or two apps. Pricing starts at $8/month.

How to get value from time tracking insights

Once you start tracking your time, you'll want to set aside weekly time to analyze how your time was spent.

Here are some things you want to keep an eye on:

• Which tasks you overspend your time and where time is better spent. You may, for example, discover you spend too much time on low-value tasks like email.
• How long, on average, different projects take to complete so you can assess your ability to take on new ones.
• If you're billing by project or deliverable, then you want to analyze which projects deliver the highest earnings per hour. Divide the deliverable cost by the amount spent.
• Which projects or clients you overspend your time. For example, a project that's similar in scope to others but takes longer to complete, suggests there's a problem, either with you or the client. It may be that the client is requesting changes beyond the scope of the project. Or it may even be that you're overdelivering.

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If you run a service-based business (or even work creatively on solo projects but don't charge clients) you need to know where your time is going. If you're on the fence about it, track your time for just three days. You'll probably be surprised to see the reality of a time log vs. how you think you're spending your time.