This is a guest post from Drew McLellan. Drew leads the Agency Management Institute, which advises advertising agencies on how to grow and build profitability. He can also be reached via LinkedIn and Google+.Did you complete your time sheet today? Did your employees?
If your answer is “no,” your agency is missing out on a crucial opportunity to increase profits and productivity. There are consultants out there who think agency folks shouldn’t have to do time sheets, but they’re wrong.
People are your biggest asset and your biggest resource, but they’re also your biggest expense. Consistent use of time sheets is the only way to know how your employees are spending their time and whether that time is well spent. Without the use of time sheets, you cannot evaluate the performance of your business — both how your assets and resources are being applied and how profitable your clients are with respect to your time investment.
More Data, Better Decisions
The data you collect through time sheets will make evident what you’re doing well, and it will also demonstrate where there’s room for improvement. Most importantly, it will reveal the profitability of each client by illustrating the time spent on every project.
That being said, everyone needs to get on the time sheet train. Yes, that includes you. Every person in your office should be completing a daily time sheet so you can get the best and most accurate picture of your agency.
Regardless of whether you’ve never used time sheets or you’ve just gotten lax about completing them, here are a few steps to get the process back on track:
1. Acknowledge It’s Your Fault.
This step is the least fun, so we’ll get it out of the way first. Take responsibility for the fact that you’ve allowed the maintenance of time sheets to become sloppy or disappear altogether. It’s now up to you to lead the charge.
2. Make a Daily Commitment to Time Sheets — And Track Compliance.
Set the expectation that from now on, time sheets will be completed by everyone every day. You need to measure daily time sheet compliance, and you (of course) need to complete them consistently yourself.
It’s going to be hard work, but it will pay off when you can show that your agency has become more profitable and more efficient, simply because you’re armed with the right information to make strategic decisions.
3. Develop Buy-In.
Make 100 percent compliance as easy as possible by removing excuses and creating a positive incentive. A monthly raffle prize of $250 to $500 for those who consistently complete their time sheets is enough to help everyone see a personal benefit. Raise the stakes by only offering the drawing if you hit 95 percent compliance.
You can also improve buy-in by obtaining software that allows people to update their time sheet from their phone, whenever and wherever they can. Be sure to set a deadline for daily submissions.
4. Take the Time to Evaluate the Time Sheets.
All the time sheets in the world won’t do you any good if you don’t set time aside to dig into the numbers and uncover any insights.
Having an accurate snapshot of how your agency has performed in the past will allow you to better predict the future. You’ll be able to anticipate returns and avoid unnecessary costs. Without time sheets, it’s impossible to truly know your profitability per client. You have no good measure of how you’re spending time and resources.
When you commit to keeping and tracking time sheets, you’ll be amazed at the impact on your profits — not to mention how much more in control of your business you’ll feel.