As a business owner, you wear many hats: accountant, marketing director, sales manager, bookkeeper… the list goes on. Not to mention carrying out work on the product or service you specialise in.
Keeping a check on the time you spend on each activity can be a game-changer when it comes to managing your time, improving workflows and boosting your income.
Knowledge is power and tracking everything you do can give you a real insight into what works and what doesn’t.
Today, we’re discussing why time tracking is important and how you can start practising it from today.
Why should I track my time?
Organise your time better.
Being aware of the time you spend on each task allows you to plan your schedule better.
For example, you may think that it takes half an hour to complete a specific task when in reality it is 45 minutes or even a full hour. This means, whenever you schedule that 30-minute activity in your diary, you will always end up behind schedule.
Accounting for every minute of your day, even if it’s just for a week, can give you a greater insight into how long things take.
On top of this, you may also realise that you’re more productive in the mornings, taking less time to complete a task before lunch than afterwards. If this is the case, you may want to put high-priority tasks that require your full attention when you’re not feeling tired and sluggish.
Get your price right.
With the knowledge of how long things take, you can start to see how much your time is worth.
We’re not suggesting that you charge clients for every moment of your time, but by knowing how long a piece of work is – realistically – going to take, you can adjust your prices to suit.
See what is profitable.
Running a business is a constant learning curve and tracking your time enables you to see the areas of your business that are truly profitable – aka worth your time and energy.
Of course, profitability isn’t the be all and end all. You may really enjoy the area of your business that earns you the least money. But, as a business owner, you need to understand what work is going to generate the most income.
This way of thinking doesn’t mean that you are money-hungry – after all, the more money you make, the more you can grow your business and help others with your product or service.
On the flipside, you can also see the activities that you could be saving time and money on.
For example, if it takes you an hour to commute to work due to traffic, maybe you could alter the time that avoids rush hour.
Another way to reduce costs when tracking time is keeping a close eye on the number of hours you’re working from home. If you are working a large number of hours outside of the office, you are entitled to claim some expenses for utility bills.
And, the hours soon rack up. Spending two hours per evening working from your sofa and you spend 40 hours per month using your home as an office.
Take a look at our blog post on Working From Home Expenses Explained, if you’d like to find out more.
What should I track?
In short, everything.
From the chargeable work that you carry out to things like chasing invoices, travel and other admin tasks. Even if it’s not working on a project or something directly involved with what you sell, note it down and you can begin to learn how much time you spend on what activities. This can help you see if you can save any time by automating tasks like invoicing or even outsourcing bits of work to an assistant, accountant or bookkeeper.
How can I track my time?
Writing down every moment of your day may sound tedious, but it doesn’t have to be.
Many digital accounting tools have a time-tracking feature built into them that allows you to easily keep a record of your work.
If your work is mainly on a computer or laptop, you could also use an app like RescueTime, which runs in the background of your device to see how much time you spend doing each activity.
Tracking your time can help you to take back control of your finances and gain an insight into your business’ accounts. If you’d like any more advice on tracking expenses and managing your books, please get in touch with a member of our team today.