Is it time to spend time on the time sheet philosophy?

Is it time to spend time on the time sheet philosophy?

A closed question? By definition it is, but I was once taught that an open question is simply one that is designed to make you think. And that is why I am putting pen to paper (well, fingers to keyboard) this morning. To generate thought about the time sheet.

Ah the Professional Services time sheet…… the magical record of work done, of value created, the conjurer of the bill and the driver of the business. Charging time is what it is all about. The small bit of pain involved in completing it (and accurately, across the many variables of charge codes and assignment numbers etc) pales into significance against the benefits.

Or does it?

We recently ran a strategic thinking session for a group of partners. And during a debate about the future, change and innovation the subject of time sheets cropped up. We asked what they saw as the benefits?

  • “We have records of what our people are doing”
  • “We can accurately measure how long assignments take us…and the real cost of each assignment by incorporating charge-out rates”
  • “It measures business and individual performance through key KPI’s of chargeability, productivity, recoverability, utilisation etc”
  • “It drives billing and work-in-progress”
  • “The whole business is based on it. Time charging is the mechanics of the firm”

All valid points. But if we look deeply enough we are able to challenge each of these arguments.

Starting with billing. There was a point in time (many moons ago in the good old days) where the bill was driven by the time-sheet. Basically the client was charged what was on the time tab. Competitive forces (and the need for certainty and budgeting processes) have meant that the vast majority of clients want the price up front. So time-charging drives the billing process, but certainly doesn’t drive the bill.

Instead it could be argued that all time charging is doing is measuring the accuracy of the initial fee quote?

And many of the benefits previously stated were also related to measurement and information. Clearly the sophisticated systems that many firms have today can generate vast amounts of information that can be used in all aspects of management decisions.

But how accurate is this information, and how accurately can firms really measure performance, cost and profit? Because in our experience, when fees have been set up front, most fee earners rarely charge all of their time. The motivation is to hit an artificial ‘budget’ (and their own chargeability targets) and time charged over and beyond this is wasted time to be written off. So the extra hours spent in the office ensuring the assignment is completed to the necessary level of quality seem to often just….disappear! The real cost and profit can be significantly different!! But one clear ‘cost’ can be the pressure put on fee earners to hit these unrealistic measurable targets.

But trying to pick apart and point score against the benefits of time sheets isn’t the main focus of this article. The key thing to think about is just what a time-obsessed, ‘input’ focused culture is preventing.

Last month I was running a management development programme for an ambitious firm. The top level management were concerned that they were losing some very talented people and that the middle management level were not doing the ‘basics’. So we were asked to spend time covering these. However (and this is not uncommon) it soon became clear that they had all the skills and knowledge of the basics. The reason they were not doing them? Key management duties were right at the bottom of the pile. In fact they felt ‘forced’ not to do them!

Because they are not chargeable. There was no time code for them. Even though they knew that time spent really managing has huge value, it doesn’t have any £value.

I then asked the obvious question. ‘So if you didn’t have time sheets what would you be doing differently?’. The list was long, but I will do my best to summarise.

  • Effective team briefings and priority setting
  • Better short and longer term planning
  • More collaboration with other practice areas
  • Mentoring, coaching and training my team
  • Really managing – setting expectations and giving quality feedback
  • Better quality Business Development
  • Spending time on clients, organising catch up calls and visits.
  • Innovating and thinking about where the business could improve.

All extremely high value, essential activities. But with very few firms having charge codes for these, or allowing much of a ‘window’ within utilisation targets for ‘non-chargeable’ time, then of course very little of this will be happening.

The managers were also honest about the effect this was having on them. As one put it

“I’m a manager but I don’t feel as though I’m judged on the quality of my management skills, or the strength of my client relationships, but more or less solely on measurement of financial return. Am I just a line on a spreadsheet?’

Now, we are not for one minute suggesting that firms simply abandon tracking time. But, maybe it is time for firms to ask themselves a couple of key questions:

Are we focusing too much on inputs at the expense of outputs?

Is the obsession with chargeable time ‘strangling’ the potential in our firm?

Perhaps the fear of change is the lack of an alternative? How do we know if our people are being productive? Achieving? How do we know if we are making a commercial return? How would we set an accurate fee?

We certainly have some ideas around these, but that is for another time. For now, just how are you giving people enough freedom to carry out the essential business and management activities that aren’t coded on the timesheet?

If you would like to discuss further, we would love to chat – please contact us on 01892 610060

theGrogroup specialise in helping Professional Service Firms grow business results by optimising: strategy, talent, business performance and business development.