Time is on our side ... or is it?
Technical professionals should appreciate the importance of timely and accurate time-sheets for determining appropriate project billing and more.
For most A/E/P firms, it is the talent, technical expertise, and experience that are sold to clients in the form of hours. The form of the agreement with the client is either a contract for time and materials, a fixed-fee contract, or some variation.
The only way that the firm can accurately track the contract performance is to evaluate how many hours were planned on the project (the project budget), how those hours are expended (the actual cost), and then how those hours compare from a performance perspective. Project managers are normally assessing the estimate to complete, which compares the performance of the contract to their assessment of work to be performed.
Critical to all of this is the capture of staff time in the form of a time card, or time-entry status. Most of the angst between the financial management staff and the technical staff is the continuing issue of getting the time in when it is due and required.
A/E/P firms offer their technical staff great salaries, direct deposit of paychecks, exceptional benefits, incentive compensation, free coffee, and fantastic work environments. Why is it so difficult to get a time card in return?
Project managers overseeing the multitude of tasks and responsibilities rely on accurate time-tracking to contracts to generate performance assessment on the project.
Without accurate and frequent entry of time to the tasks performed, the PM can be placed in a compromising position when the time cards are prepared days after tasks are performed. In fact, most project management systems – such as Deltek Vision and AJERA – allow for daily entry of time so that tracking of performance can be compared and viewed on the PM dashboard. Additionally, applications that allow for time entry into Apple iPhone, Android, and Windows devices create efficient ways for staff to never be too far away from providing a visible and quantifiable expression of the work they do!
We recently provided a project management and leadership training program to a firm that had used Deltek Vision and then integrated Newforma into its practice.
By creating one point of entry for information, accurately broken down into resources, hours, and schedule, this firm could predictively review staff hours, performance to budget, schedule of tasks, and even predictive cash flow. The critical component was daily entry of accurate time data.
From the president/CEO to the receptionist, everyone understood how important the entry of time was in this system, how critical it was for project managers to be able to evaluate project performance. One of the more important statements the president made to the PM was that “without frequent entry of time during the day, it is likely that we would be creating false records on our clients’ projects.
This firm was so committed to a high degree of project delivery that if someone input his or her time days after the task was completed, a call was made and a meeting was scheduled to review whether that recording of time was inaccurate or a false reflection of the task accomplished.
A further degree of concern on accurate time recording is when the firm enters into public sector work at the local, state, or federal level that is governed by state or federal acquisition regulations. Not only do these entities require detailed time cards and have the ability under contract terms to audit the firm’s time card records, but the inaccurate entry of time can distort overhead allocation. Especially under these types of contracts, the firm’s overhead rate is evaluated for the derivation of the overall fee and profit. If inaccurate labor is posted to overhead and not direct costs or projects, it distorts the overhead labor and ultimately the overhead rate!
So, what are some ways to get everyone in the firm to hit this critical deadline?
- Lead by example. Senior leadership of the firm has to set the example, and they need to embrace the importance of daily entry. Those leaders could provide a great example by pulling out their mobile devices and asking projects managers as they visit – while practicing management by walking around – about the project task they would like their time to go to. They could then enter that data for the PM, in real-time!
- Share the critical metrics. If the staff is given critical performance metrics and senior leadership presents them in a consistent format monthly, the importance of time card input becomes tangible to firm performance and project performance.
- Ensure integrated data. The most powerful and useful tools are those that allow time card entry to impact resource allocation, budgets, schedules, and performance. By the firm investing in these highly valuable and time saving systems for the PMs, project management no longer requires hours of data manipulation to determine where the firm is headed.
BACK LOG PERFORMANCE – HOW PREDICTIVE? Backlog, or the value of fees remaining on projects, should be accessible with the push of a button in an integrated project management system. In most firms that we work with, when we ask to see backlog, it is one column of data. When we ask to see backlog over the year or life of the project, it is non-existent. When firms try to extract as a PM/staffing of resource exercise, it takes weeks, and upon review of the information, the data is no longer valid, projects have accelerated or been put on hold and the whole exercise has wasted valuable and precious time of PM and financial management staff!
So, as the song goes: “Time is on my side, yes it is.”*
In the A/E/P world it can only be if you capture it daily and accurately and use it to make predictive and forecasted decisions!
TED MAZIEJKA is a financial and management consultant for Zweig Group. Contact him firstname.lastname@example.org.
*Written by Norman Meade; performed by The Rolling Stones, 1964.
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.