Finance + Profits, Better Business
Time really is Money
Do some sums around your professional services office. Multiply everyone’s charge rate by the hours they’re doing billable work in a typical month. You might want to reduce your total a bit to allow for legitimate down-time.
That’s what you could be invoicing every month.
But according to a country-wide survey, nearly three quarters of professional services firms recover only 60-80 % of their billable hours. Others are burying time in ‘admin’, trying to hide the write-offs, trying to look better than they really are.
Most firms aren’t achieving anything like their potential revenue.
Half way between 60 and 80%, for every nominal $100.00 in fee value, three quarters of professional services firms are only recovering $70.00. If that was tightened up by 10% each month, revenue would increase by more than 14%. And bottom line profits could well double.
That’s one simple lever to turn, and one giant leap for the business that turns it. You’d be over the moon for sure!
Managing write-offs on billable hours is a common challenge for all professional services firms, regardless of whether you bill on the basis of time engaged, fixed fee or some other way. The reason always comes back to the same old thing; time management.
Research shows Architecture & Engineering firms are wasting on average 30% of billable hours.
Trends & Challenges in Architecture & Engineering: International report 2014
Time management isn’t about counting time. It’s about making time count. That means planning and managing your time, and everyone else’s. What else is the primary reason everyone comes to work, if not because of the money they make for themselves and others.
Time really is money
The benefit of our cloud time management software is that a task with an honest 12 hour budget is much more likely to be completed in 12 hours instead of 20. As a bonus, another task you were hoping to get done doesn’t have 8 hours stolen from it. It too will be finished this week instead of next. Woo hoo!
Everybody still has their coffee breaks. Nobody’s exhausted or over-worked. Everybody wins. Time management is the hero.
How are you managing in this area? Your comments and thoughts are most welcome.
Wouldn’t it be amazing to be supported by a great time management tool? Find out how our expertise in professional services time and project management software can add value to your business.
The Abtrac team are writers, designers, engineers, consultants and analysts. Together we dream, build and deliver an amazing software solution for professional services.