Developing Metis has been a journey of discovery - we thought that most professional services businesses would be fairly consistent in how they operated, no matter how diverse the services they provide. One area we assumed would be simple, but turned out surprisingly complex, is time recording.

So why do firms record time at all? Interestingly, some don’t, especially those whose people are 100% allocated to a single project for long periods. These firms tend to record time by exception, e.g. were there any days that Sue wasn’t with the client this month? 

But most firms do record time, and they do so for a variety of reasons:

• To know what their actual costs are
• Clients often require a record of time spent, even if paying a fixed fee
• To support analysis like utilisation
• Reconciling invoices for freelancers
• Discharging their duty of care to look after staff and freelancers

There are two main approaches to time recording with an almost religious divide between them: professional days and free entry.

Professional days

Some firms plan their time in terms of 'professional days’. A professional day will have a nominal number of hours, say 8, and both fees and costs will be based on this unit. Firms working on the basis of a professional day will ask staff to record these professional days or part-days, and not the actual number of hours worked on that day. 

Free entry

Other firms monitor time spent in hours, and typically ask staff to enter all the times that they have worked. This is useful when working on a time and material basis, where all time can be charged to clients. The other upside is that free entry creates a clearer picture of the true cost of delivering a piece of work. 

Potential issues with time recording methods

People have strong views over which approach better represents the actual cost of delivering a project. Of course, staff aren’t normally paid for overtime, so don’t actually cost more if they burn extra hours. It’s a matter for debate whether time beyond the standard working day should get charged as a job cost - some people think that charging the extra time puts job costs out of step with the actual costs in the business. Others see overwork as an opportunity cost or a source of people churn, both of which should be accounted for.

Another potential downside of professional days is the perverse incentives. For example, if you can only enter 8 hours a day, then it can be hard to hit utilisation targets, and there may be an incentive to over-record client hours at the expense of true internal time. Also, if significant overtime is being hidden by a capped time-entry system, then it’s easier for senior leaders to be seen in a good light, perhaps through lowballing the headline price on a job or by recording a margin that doesn’t reflect the true effort required to deliver a project.

Two other concerns often skew things in favour of professional days; some firms think that allowing people to record all the (long) hours they work will encourage people to ask for more money or time off. People also want to avoid the scenario where, after agreeing a fixed price for 5 days’ work with a freelancer, they use free time entry to record 5.5 days, creating a little reconciliation horror story.

Free entry VS. capped time entry 

How do you record your time?

The debate between free time entry and capped time entry will continue as long as people run consultancies. On balance, we’re fans of free entry, because it better records what’s actually going on in the business. Regardless of which option you favour, Metis supports both methods with ease, and we’re actively looking at ways to combine the two: allowing capped time entry for cost capture purposes, but with the ability for staff to record the extra hours it has taken to deliver something. 

Your time is value – spend it progressing your consultancy with Metis.

Metis was built by a small team of entrepreneurs who have founded, grown and sold companies like yours. We know what it’s like to manage all stages - from when there are just two of you, to when you’re dealing with hundreds of people in multiple teams. Metis is the distillation of the lessons we have learned along the way. Our mission is to make businesses like yours more successful. If you’d like to hear more about how we can help, get in touch.