Individual consultants are frequently underpaid since most of their time goes uncounted and is not factored into payroll calculations. Apart from consulting, they conduct research, communicate with clients and departments, travel on business trips, etc. As a result, consultants frequently work outside of regular business hours, and their extra work time goes unregistered and unpaid.
How can the consultant timesheet app combat time theft, enhance individual consultant compensation, and increase company revenue?
Managing time and accurately monitoring billable hours can be complex for a consultant.
With several projects, clients, and responsibilities to manage, keeping track of how much time is spent on each one can be difficult.
This is where the timesheet app comes in.
Why do consultants need a Timesheet App?
Time-tracking software is essential for consultants because it is critical to their business operations.
A study of UK office workers found that the average productive work time during an 8-hour workday is only 3 hours.
According to the survey, employees spend a large percentage of their workday engaging in non-work activities such as checking social media, perusing news sites, discussing work with coworkers, and other diversions.
According to these studies, many individuals need help to stay focused during the workday, which can harm overall performance and corporate results.
So, here are some of the essential reasons why time monitoring is critical for consultants:
- Accurate Billing: Clients are often charged based on the amount of time spent on a project by consultants. It ensures that consultants bill clients appropriately for the time spent on specific tasks or projects, preventing misunderstandings and disagreements.
- Project Management: The Timesheet software assists consultants in properly managing their projects by tracking progress and flagging any delays or concerns in real-time.
- Resource allocation: Consultants can identify areas where they are over or underutilizing resources by measuring time spent on various tasks.
- Client Communication: Consultants can use time tracking to keep customers updated on project progress, milestones, and schedules.
- Employee Management: The Timesheet app allows consultants to track their productivity, offering valuable data insights that can assist in discovering areas for improvement, such as time management and training requirements.
Billable and Non-billable hours
Billable and non-billable hours in consulting refer to the time consultants spend on various sorts of tasks linked to their client engagements and internal firm activities.
Billable consulting hours
The time consultants spend directly working on projects or providing services for which the customer pays them. These hours demonstrate the primary revenue-generating activities. Client meetings, data analysis, research, strategy formulation, writing, and presenting client presentations were all part of the job.
For example, if a consultant works on a project for 8 hours a day and the client is invoiced for 8 hours, these are billable hours.
These are the hours during which the consultant works on activities that are not directly charged to the client. These hours are credited toward the internal operations and development of the consulting firm. Activities that are not billable hours include:
- Internal gatherings
- Business expansion
- Professional growth and training
- Administrative duties
- Innovation and research
Non-billable hours do not directly contribute to income production, but they are critical for preserving the consultant’s efficiency and skills and setting the organization for future growth.
Balancing Billable and Non-Billable Hours
Efficient time management and a proper mix of billable and non-billable hours are critical for consultants’ success. They must ensure that there are sufficient billable hours to produce income.
Managing non-billable hours at the same time ensures that internal operations, staff development, and strategic planning receive the attention they require to support long-term success and sustainability.
How does consulting billing work?
Consultants follow a structured process that involves determining the scope of work, establishing fees, tracking billable hours, and invoicing clients. Here we are sharing easy steps for how consultants bill:
- Scope of work and agreement: Before starting any consulting firm, it is crucial to have a detailed scope of work mentioned in a formal agreement between the firm and the consultant. These documents outline the objectives, deliverables, timeline, and other terms related to the project.
- Fee: Consultants work on different fee structures, depending on the nature of the work. The common fee structure includes hourly, fixed, and retainer agreements.
- Time tracking: For hourly projects, consultants use the resource management software to track their time spent on billable activities. Time tracking accurately records the efforts invested in the project, which forms the basis for billing the client.
- Expenses: Consultants may also spend plenty or less while working on the projects, which includes travel expenses, research materials, licenses, etc. These expenses are billed to clients.
- Project milestones: Consultants structure the work in milestones. They bill the clients based on the completion of these milestones.
- Final Invoice and Closure: The consultants submit the final invoice to the client upon the project’s completion. The final invoice includes any outstanding payments, reimbursed expenses, or any remaining fees.
- Payment collection: When the client receives the invoice, they pay it according to the payment terms that were agreed upon. The consulting firm actively oversees the payment collection process to ensure prompt payment reception.
Consultants can ensure that their financial contacts with clients are transparent, accurate, and professional. Efficient billing methods aid positive client connections and the overall profitability of the consulting business.
eRS is the best timesheet app for consultants.
eRS is the ideal timesheet app for individual consultants and small firms since it is inexpensive and simple. Outstanding solutions feature a free plan for individuals and small groups.
For your client projects, eRS creates the correct timesheets. Simply complete tasks for each client and assign them to employees. eRS will track the amount of time each employee spends on each project.
You may access your dashboard at any time to see how much time each project took and how much time each consultant worked on it. Timesheet reports can be generated for each task and employee.