Time tracking best practices for your agency

Paul Doerwald • November 9, 2022

Time tracking is essential for every agency and consultancy. Although time tracking is a total pain-in-the-butt, without it you can’t know if or why you’re profitable. You’ll also lack the most important tool to get to profitability. Time tracking helps you keep track of where your time goes — which client, project — and where it gets lost. It also makes sure that everyone is billing accurately for their time. In this article, we will discuss best practices for time tracking at your organization.

Before you ask your employees to log a single hour, your organization needs to be "all in". In some organizations, this will require cultural change. The entire management team needs to believe model the importance of timesheets. Only once your organization’s culture is ready can your employees start doing their part.

This article is about creating that cultural change. Let’s dig in.

Table of contents:

Creating a culture of time tracking at your agency

If time tracking isn’t a priority for leadership, it won’t be a priority for staff.

If time tracking isn’t already part of your agency culture, here are some ways you can change that.

Don’t treat time tracking as an afterthought

Your employees can smell weakness. If you’re not on top of time tracking, they’ll know it. Like sharks circling, they… umm… won’t do their timesheets. Okay, the metaphor doesn’t work.

Point is, if the importance of time tracking is something you talk about every 6 months, no one will care. If it’s something you talk about every day, your staff will be on board.

Model time tracking for your employees

Time tracking sucks.

Your employees don’t want to do it, because there’s no up-side for them.

But if they see you doing it — if they see you suffering their pain — then they’ll feel like you’re all in it together. Which you are.

You’re probably thinking “but so little of my time is billable!” As a CEO/managing director, you’re probably right. But some of your time is billable, and you should capture that. If you don’t, you’re giving away value for free.

And just because your time isn’t billable, that doesn’t mean it’s not trackable. Much of your time probably fits neatly into these buckets:

Sales. Networking, Twitter/LinkedIn/other social media, introductory calls, pitches, proposals, follow-up, contracts.

Human resources. Searching, hiring, reviewing, firing, and just plain chatting with your staff so they know you’re human and you care about them.

Finance. Planning, banking, forecasting and all manner of spreadsheet-ing.

Business development. Brainstorming, planning, strategy, growth, partnerships.

Although the CEO and CFO benefit most from timesheets, they often have the least reason to do them. Do your timesheets so you can be an example for your staff.

Tip: You might want to make your timesheet submission history visible to your staff. It’s extreme transparency. Your staff will appreciate your vulnerability, especially when you miss a few days. Don’t ask your staff to make their timesheets transparent. It doesn’t work both ways.

Make time tracking part of new employee onboarding

On every new employee’s first day at work:

  • Talk to them about the importance of accurately tracking time.
  • Tell them it’s a priority at your company.
  • Tell them how you use their time tracking data: Billing? Utilization? Productivity? New positions?
  • Introduce them to the time tracking tool they’ll be using. Show them how to create their first entry.
  • Explain what your time tracking standards are: Exact time? Round to the nearest 15? Description detail. Task types. Billing two or more clients at the same time. Guidance is helpful when navigating these subjective issues.
  • What do you consider billable vs. non-billable time?
  • Make it clear when timesheets are due and what the review process is.
  • If you have any (penalties) rewards (non-)compliance, make those clear now.

Then, during their first week, show that you mean what you say by living it in your organizational culture.

Create a time tracking standards document that employees can refer to

Capture everything you said to the employee above, and put it in your employee handbook.

Saying it to the employee is great. Having a resource they can consult afterward is even better.

Have a clear set of “General administration” projects

Billable time is usually pretty clear: I’m doing client work, so I should bill the client. General administration — all the non-billable things you do every day — is more ambiguous. It’s easy to have too many or too few General administration projects. I recommend the following:

Sales activities. Initial meetings, proposal writing, brainstorming. Your senior staff often contributes to sales. You should capture that time. [1]

Marketing activities. Updates to company website, portfolio, creating assets such as white papers, case studies and Twitter auto-DM campaigns.

Human resources. Annual reviews, reviewing resumes, job interviews. Hopefully this will be your most lightly-used bucket of time.

Meetings. All-hands, off-sites. Possibly training and conferences, unless you have separate categories for those. Meetings that are not client-specific or touch on too many clients to be billable. Obviously, do not include Sales & HR meetings.

Training. Time spent learning new tools/technology, either formally as part of a course, or informally. Don’t use this unless you expect that staff will do regular training. Use Meetings or try to bill the client where possible.

Conferences. Time spent traveling to, from, and at conferences. Don’t use this unless conference attendance is a normal part of everyone’s job.

Vacation. Vacation days. Staff should mark the days where they use vacation. It will be easy for everyone to know how many days have been taken and how many are left. [2]

Holiday. Statutory holidays such as Presidents Day, Labor day, Remembrance Day, and other Bank Holidays. As with vacation, Staff should mark holidays. [2]

Personal/Sick. As with Vacation and Holiday, staff should mark any days they take as a personal/sick day, if applicable in your organization. [2]

Lost time. “I don’t even know any more.” This is where time goes to die. Water cooler conversation, phone call from mom. Much as no agency owner wants to admit it, a shocking amount of time will end up here. It’s better to use “Lost time” than to bill your biggest client. Really good tool support (e.g. Clockk) can help you recover some of this time.

Time tracking. If you use Clockk, you can let your time tracker track the time you spend tracking time 😂.

[1] Some agencies might want to track pre-sale time on prospects. Doing so will let you know how long it takes to close a deal, both in calendar time as well as effort time. This is not for the faint of heart. It will take buy-in from your sales staff. You will need outstanding tool support (hint: Clockk can do this). If you can pull this off, you’ll be much better for it, but don’t worry if you can’t.

[2] Regarding Vacation, Holiday and Personal/Sick: you may have HR software to track leave days. If so, use that instead of your time tracking tool.

Show hours spent vs budgeted at each planning meeting

At planning meetings, show that you’re paying attention to their timesheets.

As you start talking about each client, pull up a report that shows hours spent vs. budgeted. Everyone on the team will quickly see if a project is going off the rails. Together, come up with strategies to get back on track.

Casually mention that you’re missing a couple timesheets and you’ll follow up later. Don’t call any person out; that’s not cool.

Give your staff a tool they love to use

All-in-one software that manages projects, expenses, timesheets, invoices, etc. is popular with management. It makes business-wide reporting easy. Ask your staff how they feel about it. All-in-one software is often “jack of all trades, master of none.”

Be careful that the tool doesn’t make an already awful job — doing your timesheets — worse. These all-in-one time tracking tools are often slow, ugly, or complicated.

It’s better to get accurate data on time from a third-party tool than to have a beautiful dashboard with wrong or missing data. Odds are you can find a way to import data from the third-party tool into the first-party tool.

Empower the people who collect timesheets

The people who collect timesheets (usually project managers) deal with a lot of crap. No one likes doing timesheets, and it’s a pretty awful job having to chase people down.

Give your project managers authority. Support them when they have to be the “bad guy”. What does that look like in practice?

Make it clear that when the project manager wants timesheets, they get timesheets. Timesheets have a higher priority than non-urgent client work. The project manager is the sole arbiter of “urgent”.

If you hear complaints about a repeat offender, make that offender your responsibility. Do what the project manager recommends.

Be prepared to fire people who don’t submit timesheets

“If you’re not ringing the cash register, you’re no good to me.”

“If we don’t know where you’re spending your time, you’ll have to spend it somewhere else.”

Maybe you have a brilliant designer whose work your clients love. Maybe your rock star developer can put together an amazing website in a couple days. Unfortunately, if they refuse to track their time, they don’t make you any money. An award-winning copywriter is worth nothing to you if you can’t attach their time to a paying client.

It might be time to part ways and find someone, perhaps of lesser talent, who understands how your business actually makes money.


Making time tracking work for your agency requires buy-in at the management level. This requires cultural change.

If time tracking is a priority at the top of the organization, it will be a priority at the bottom.

An important part of creating a time tracking culture is choosing the right tools. More than any other tool you use at your agency, your timesheet tool is the most important choice. It, along with invoicing, is responsible for the top line on your balance sheet. Every other tool focuses on project delivery. If you choose the wrong tool for time tracking, your top line will suffer.

Clockk is an automated time tracking tool. Clockk privately and securely builds your timesheet for you, project-by-project, in real time. Accurate timesheets have never been as easy as they are with Clockk. Sign up for free.

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