It’s great to be able to give time away for free – just make sure you know how much of it you can afford.

The idea of providing ‘free’ work to customers, i.e. additional work on a project or service that your customer doesn’t pay for, seems a senseless notion to some.  After all, why would you give your time away for free? Customers will take advantage and it would be costly for your business to provide it - wouldn’t it?

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According to Finance Online a staggering $7billion is lost due to unrecorded work activities.

Business – as we all know – has long been dependent on ‘freebies’. So much so that it’s now part of many people’s expectations. Whether it’s giving out free samples to entice buyers to try something new; rewarding customers with something extra, or even offering interest-free payment terms for a set period of time. It’s just that what appears to the end recipient as being free simply has a planned cost to the provider at the other end – most usually in time.

There’s no such thing as a free lunch

The reality about free work, all comes down to perception. As the timeworn saying goes, “there’s no such thing as a free lunch” and whilst this adage is mostly true, “free” isn’t always a bad thing especially if you’re keeping track of both your billable and non-billable utilisation in one place so you can see exactly what work is being done and calculate the exact costs alongside your budgets.

Many businesses habitually provide free – or so-called pro-bono services – simply because it’s part of their mission to be more socially responsible. They’ll do so because giving their time has positive public awareness properties that make them seem like a good organisation to be doing business with. Put simply, a small amount of time given away here and there can result in more billable hours in the future from new or existing clients impressed by this altruism.

The only thing that stands in companies’ way is recording this time. Free can become costly very quickly if firms don’t keep tabs on their billable hours where costs are attributed to them and those which they are willing to donate.

Knowing the interplay between the number of hours donated and the number of hours that are not is essential. It has obvious importance for being able to work out profit and loss, and even whether firms can really ‘afford’ to offer out free services at all.

Analysis of how much time is given away to who, how often, and by whom will determine whether certain projects are ‘worth it’. More in-depth analysis might even reveal which have gobbled up more time than managers might initially have thought, and what capacity employees have for being able to ‘give’ more of their time away to these pro-bono activities.

Time recording systems are essential for understanding just how much of your most precious resource can be apportioned to clients that may not generate any direct money. When done effectively time tracking can help you monitor employee time, manage projects, and track where your resources are going, however, it also goes beyond this, and can have a positive impact on many areas of your business.

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Mitigate revenue leakage

Time tracking brings considerable success to organizations in the form of better results and better relationships. It gives organisations the insight they need that enables them to reveal time losses, report errors, and identify revenue leakage. In doing so it helps reverse downward performance and productivity trends and brings in proper oversight.

Aid better and faster decision making

It’s highly likely that time tracking will increase billable hours by making project planning more efficient, and through easier timesheet management, time is better accounted for, meaning revenue lost due to billing errors is also eradicated. When organisations have better visibility around how staff are managing time, decision-making can be faster (and possibly more reactive and ‘better’), while problems can be spotted and managed, before they become larger.

Estimate costs for future projects

Understand exactly how much time a previous project activity took, especially if the activities are similar. Pinpoint areas where employees are spending too much time on non-productive low-value tasks. Equally, it will expose extra resources should one team be overachieving and have the capacity to take on additional tasks from another overloaded team. Time tracking data allows you to accurately estimate the costs of future projects. It can also help identify any variances and modify project costs before they get out of hand.

Maximise finance and productivity tool integrations

As with all good time tracking solutions they integrate with your existing productivity and finance tools to save you time and money. To help your teams to become even more productive, secure, and accurate in their day-to-day work. Keeping employees focused on deep work rather than jumping in and out of systems.

Identify areas for improvement

This can be tricky for many businesses as it’s likely you’ll need to have data available that you’re probably not already tracking. Make the most of your data and use it to take immediate action on areas that need improvements and more resources. Use the data to assign the right tasks to the right people or allocate more staff to a project when deadlines are looming or assign staff to cover a period of employee absence.

Save valuable time and reduce error

Time tracking software saves time: according to Deloitte, 50% of professionals who do not have automated systems, (for example, time tracking) say manual data input and data adjustments are the most time-consuming parts of the process. Using leading time tracking solutions will ease the burden of manually tracking time in spreadsheets and reduce the risk of error in your reporting.

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The true cost of not tracking time

Time is money and having no clear oversight of how or where your most precious resource is being spent will ultimately cost you. When taking a closer look at the statistics, the results uncover the current landscape for many businesses and it comes as no surprise that only 17% of employees are actively tracking their own time, according to research provided by TechJury.

This leaves the vast majority of employers with no clear indication of how their employees are managing their time on a daily basis and their productivity rates. Poor time utilisation and untracked activities could have your business hemorrhaging money, put you way behind your competitors, and jeopardise customer relationships.‍

Future-proof your business with time tracking

It’s all about the bottom line. Streamlining your operations in any way will come with financial gains and time tracking is just one of the ways to do this.

However, investing in time tracking technology is only as good as the strategy behind it. To ensure its effectiveness you’ll need to put the appropriate time-tracking strategies in place to reinforce your chosen solution.

In essence, with efficient time tracking and analysis smoothness is achieved, and better relationships result between both employees and customers alike.

At a time when new business depends on the relationships, and what parties can bring to one another, having systems that automatically smooth things out has to be a bonus.

Not only will time tracking help you keep track of your costs, but it can uncover areas of your business where you can become more profitable and the potential for capitalisation - it’s a win, win!