Few topics divide agency owners like timesheets. One side says you cannot manage what you do not measure. The other says time tracking measures effort, not value, and teaches people to fill boxes. Both are partly right, and the useful answer sits in between.
What the benchmarks say
Agencies find time tracking hard to do well. Teamwork's State of Agency Operations report, from more than 500 agency leaders, found only a third say staff submit their time on time at least 90% of the time, and 52% struggle to get billable utilisation above 50%. AgencyAnalytics' 2024 benchmarks, from 251 agencies, found close to half call allocating billable time their top team-management problem.
The case for tracking
Without some record of time, you cannot tell which clients are profitable, whether a retainer still covers the work, or what to charge for the next audit. Agency Management Institute recommends tracking the time you write off and the reasons for it, and telling the team the budgeted hours for each task, so everyone knows what a job is supposed to take.
The case against
Blair Enns, in Pricing Creativity, argues that agencies should separate their prices from their effort: clients buy outcomes, and billing by the hour rewards slowness. Full timesheets also have a cost of their own. People log time at the end of the week from memory, the data is rough, and the act of logging every fifteen minutes signals distrust. If the numbers are wrong and the team resents them, they help nobody.
The light version
Most agencies do not need minute-by-minute timesheets. They need to know roughly what each client and each type of job costs, and to check it now and then. A light approach:
- Track by project and task, never by the minute. Two or three entries a day are enough.
- Track in short bursts: four to six weeks, twice a year, or for the first two months of any new retainer.
- Use estimates for the rest of the year. A ten-minute weekly check, where each person splits their week across clients in rough percentages, is accurate enough to spot a problem.
- Track the exceptions every time: work written off, and work outside the scope. Those are where the margin goes.
- Use the numbers for pricing and scoping, not for performance reviews. The moment time data is used to judge people, it stops being honest.
What to do with the numbers
- Compare each retainer's fee with the time it really takes. A retainer that has crept from 30 hours a month to 50 needs repricing, not more effort.
- Price the next project from what similar ones really took, not from what you remember.
- Find the clients who cost more than they pay, and decide whether to reprice, rescope or replace them.
- Set realistic utilisation targets. Agency Management Institute is often cited for aiming at 75% billable; most agencies are well below, and planning as if they are not is how deadlines slip.
Track time to price better, not to police people. The day it becomes surveillance, the numbers stop being true.
If you have never tracked time, start with one month on your two biggest clients. You will learn more from that than from a year of timesheets nobody trusts, and you will know exactly what to fix in your next quote.
