PM Perspectives: Words on the use of Timesheets

By Christine Brack Principal, Business Planning Consulting Design firms don’t sell an actual product, even if drawings and written deliverables are part of the final package. They make their living selling units of professional time. If this cost per hour weren’t so important, the industry wouldn’t focus so much attention on it. In fact, firms would always like to raise their billing rates— if even by a little. Many clients have the leverage to maintain a cap on those rates— to the disappointment of all. ZweigWhite researches and publishes this data in its annual Fee & Billing Survey of A/E/P & Environmental Consulting Firms, which cements the relevance of this topic. Establishing what to charge for any given unit of time is the easy part. Estimating the number of hours required to perform a project in this industry is a challenge— calculating it so we do it profitably even more so. About every two weeks, employees across the country receive a brief but terse e-mail reminder from the accounting group to submit timesheets. I’ve been there myself. Thinking it should only take me five minutes, I’ve opened up the program to discover I have to recreate the past 90-plus hours from memory. Not only has the task now become more difficult than necessary, but there is a high level of certainty I won’t remember it correctly. Many employees don’t see the sense in timesheets— perhaps it’s just another mechanism for management to spy on production. That would likely explain why time is seldom recorded honestly. It isn’t a generational issue either. I was just in a room full of highly experienced, senior project managers who all admitted they under-report their time. Leadership was a little surprised but the CFO had suspected this discrepancy all along. It was time to have an honest conversation about timesheets. This issue probably comes up in your firm too— so here are some points worth mentioning again to your employees:

• Going over doesn’t get you fired. A project may go over budget for several reasons. Perhaps we figured it low to get our foot in the door in the first place. Maybe we assigned it to a less experienced team and it took them longer. It is possible for a new client or a new project type to simply eat up more time than we expected. No project is perfect and everyone makes mistakes. Providing a quality project takes time. Team members and project managers shouldn’t live in fear of getting fired, catching heat, or looking incompetent because a project went over budget. We all have our reputation to protect, but a few hours isn’t going to make or break it.
• Track improvement if you’re going to track time. A firm interested in improving performance understands the reasons why things might have gone off track but it also needs to know “how much.” Getting a little more efficient or developing skills so that tasks are performed quicker are accomplishments worth noting and nothing will prove that more than the numbers. Analysis can also shed light on the firm’s most unprofitable types of projects or clients— good information to know when making strategic decisions about which projects to pursue. The only way to really know the best use of your firm’s time is through true time reporting.
• Numbers talk when we don’t. Even in this economy, people are working at or above capacity. When you record your time honestly— billable and unbillable— leadership can see when you are fully utilized and make the call to add support staff or managers. None of us ever want to say we can’t handle it all, and instead we silently continue to work in near burn-out mode.
• Reliance on the unreliable. It’s common practice to use past projects to estimate new fee proposals. Many firms do so without looking at the numbers of what it really costs. Assuming they didn’t hear anything during staff meetings or through the water cooler gossip about the project operating at a loss, using the same figures seems like a safe bet. However, the firm is simply repeating an unfortunate process.

As long as there is a goal toward improvement and everyone knows what happened on a project and why, there is no shame in a project going over budget. Timesheets seem like a bothersome administrative task but the accounting of time is extremely important in influencing decisions. If you are going to collect time from employees, emphasize the importance of real reporting and then use it to make real improvements. Otherwise, why bother?