You’ve probably heard me say it a million times, but timesheets are the source of foundational data that you need to to run your agency in a fiscally responsible way.
They may have nothing to do with billing. You can value price, project price or sell your work for chickens…that is not my point nor is it the reason timesheets matter. They matter because they are a measure of the efficiency and effectiveness of your team. Your people (W2 people) are your most expensive resource. If you do not know if you’re using your resources well, if they are performing at a high level, or if/when you need to add more resources — then you are operating your business in the dark.
I totally get that no one likes timesheets. I have never met an agency employee or owner who does. But without them — I promise you, you are leaving money on the table. Every month. Timesheets that are not done daily are 67% less accurate than daily timesheets.
So let’s assume (humor me) that you’ve decided that daily timesheets are a mission critical focus for the agency. You want to be able to use all of the other agency metrics that are based, at least in part, on timesheet data.
But, your folks don’t do their timesheets every day. Maybe they don’t do them at all. Or, if you are like most agencies, most people do them once a week or so. But you always have some stragglers who are a few weeks out.
How do you change the culture?
I have seen many agencies from from zero to hero in this arena in 2-3 months using the carrot and stick combo I am about to describe. For this to work, here are the musts:
- The owner/s needs to do daily timesheets too
- You must stick to the rules — if they don’t hit goals, do not give them any rewards. Likewise, if they miss goals — you need to make it very clear what they have lost.
- This only works because of the peer pressure so do not modify the program to eliminate that because you don’t want to embarrass anyone.
Okay — if you are still reading, here’s how it works.
- Hold an all team meeting and explain that timesheets are vital information for you to do your job — to run the agency profitably, to verify if estimates are accurate (they are not), and for you to know when the team has capacity and when they are booked to the max.
- Reinforce (you will need to do this over and over again) that you need them to be as accurate as possible on their timesheets. If they fudge them so a project doesn’t go over budget — you will keep making the same estimating mistake time and time again. If they don’t record all of the time they work (to hide inefficiency or whatever the issue is) then they look like they have capacity, when they may not. This is something you are going to have to say over and over again. For some reason, agency employees often believe they need to manipulate the truth.
- Everyone needs to have their timesheets done by 10 am the following morning. So my Monday timesheets are due at 10 am Tuesday. Every morning no later than 9 am someone on your team (typically a bookkeeper or the CFO) will send an all agency email, listing who does not have their timesheets done for the previous day and reminding them that they have one hour to complete them. This MUST go out to everyone. Some agencies will write the names on a whiteboard in a common area or some other method — but you must publicly proclaim who still needs to get their timesheets done.
- If the agency accomplishes 95% on time completion of the timesheets for the week — everyone’s name goes into a proverbial hat. If you fall short of the 95% — an email is sent out, saying you missed the mark. You don’t need to name names again — your people will remember.
- On about the 28th of the month, email everyone a list of who still has outstanding timesheets for the month and ask them to complete them before the last day of the month, or the drawing is cancelled. (see next bullet re: drawing)
- You repeat this each week of the month, putting names in the hat for every week that you hit the 95% on time mark or better. At the end of the month, assuming you now have ALL of the timesheets in (even those that were late — they are done now.), you draw a name out of the hat for a prize. Some agencies do $100. Some agencies do $1,000. Others do a $100 gas gift card. Some do an extra half day off or some other non-money perk. Make it significant enough that people really want to win it.
This carrot/stick combo works. While your people will dismiss doing their timesheet if it just means they are not in the drawing, no one wants to be the person who kept the entire time from getting to put their names in the hat or worse yet — not have the drawing at all.
The agencies that have implemented this have:
- Put an easy additional 5% of profit to the bottom line, because they are just accurately capturing time
- Are able to see where their estimates are off in real time
- Are more likely to create change orders or talk to the client about overages, rather than just eating them
- Have a much more accurate sense of workload, who is crushing it and who is taking too long (may need some additional training?) and
- Actually know if/when you need to staff up.
There is NO downside to having accurate daily timesheets. The amount of money you spend on the incentives will pale in comparison to the rewards to your agency. Hold your people as capable and accountable. Reward them for helping you build a financially sound agency and stop operating in the dark.