Tracking and billing time is essential to independent consultants. Whether you charge your clients by the hour or by the project, keeping track of how you spend your time will help ensure that you are both productive and profitable.
As an independent consultant, how you manage both your billable and non-billable hours determines how much you earn. Billable hours are those spent directly with the client or working on client projects. Non-billable hours include time spent on marketing and administrative tasks such as billing and invoicing. While non-billable hours may not be directly charged to a client, they do factor into your bill rate.
Accountability and Profitability
Whether billing clients by the hour or project, you want a process that allows you to accurately and ethically keep track of the time you spend working for clients and bill accordingly. Tracking time demonstrates accountability to your clients. You will ensure that you are spending the time needed to achieve milestones and can always give your client an accounting of the hours spent on your project. Keeping track of your time will also help you to assess the profitability of your projects and adjust as necessary for future projects.
There are a number of options to help you efficiently and effectively track and bill your time. Below are several tools and resources that are available to independent consultants.
Do It Yourself Software
QuickBooks by Intuit offers PC and online versions for billing and account management. Intuit also offers time and billing apps such as SpringAhead Time Tracking & Expense Billing Management and eBillity Time Tracker & Billing Manager that allows you to track, record and sync hours with QuickBooks. FreshBooks is a cloud based accounting system that enables you to track time, expenses and invoice clients from your desktop, laptop, smartphone, or tablet.
Smartphone, Smart Office
For the on-the-go consultant, a mobile device can be a great tool for logging billable hours, or client-related expenses.
The Timewerks timer app integrates with your iPhone address book to create new client records and can be customized to accommodate different rates for different tasks. This is perfect for the consultant who bills by the hour but has different rates for different tasks. You can also use the app to create invoices and send via email. You can also integrate Timewerks with a separate piece of software to accept credit card payments.
Harvest provides the flexibility of tracking on a PC, Mac, mobile device, or desktop widget. You can even track time via Twitter, Gmail, and other popular applications such as Zendesk. The software creates an invoice that automatically pulls in project hours and expenses.
Software, cloud based systems and apps make it easier for you to accurately track time and bill clients. Setting up a process will also help you save time on administrative tasks. Choose a system that fits the way you like to work and that will be easy to use.
Contracts should clearly articulate services to be performed, timelines for completion, and payment terms and conditions. Here are 6 best practices for drafting the right contract for your independent consulting services.
When it comes to consulting, your reputation can be everything—so why risk it? Here's how to keep your record clean and your clients satisfied.