Most of my client engagements are project-based. That means that the customer and I reach an agreement on what the deliverable will be and I quote a fixed cost. I like this, and customers do, too. But I still track my time.
Why? Because I need to know if I quoted the job correctly. I’d never go back to a client and tell them that I wanted to be paid more for a project. But I need to know if I’m doing profitable work, or not. If not, I need to avoid those projects in the future or quote them at a rate that is profitable.
I keep it simple. If I do any work, even spend time thinking about the project, I note the time and record it in no less than 15 minute increments. That includes time I’m on the phone with the client, time I’m writing or reading emails, anything that includes work for the client. If you use a lawyer, they’re tracking their time, and you quickly learn to ask focused questions and don’t waste time on the phone asking them about their day. It gets expensive fast. I treat my own time the same way.
This carries over to projects that are time-based. It makes me focus clearly on using my time well and keeps the customer focused, too. They know how much they’re paying me by the hour and they are careful not to waste their time, or mine. It works out well for everyone (and many customers quickly transition to project quotes rather than hourly quotes to stop the clock, from their perspective).
Tracking your time will do one other thing for you: it will tell you how much additional work you can take on, what your earning potential is, and when you need to raise your rates. I need to know this and you do, too. If you don’t, you may end up wondering why you’re working so hard and still not making enough money. The only way you’ll understand that relationship between time and money is to track your time.
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