To have timesheets or not - that is the question

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I keep reading/hearing on different sites that ‘progressive’ firms don’t both with timesheets anymore. Am I missing something - how do they know that their charge out rates & fees are profitable? Thinking about it, the only firms that I’ve seen say this are related in one way or another to Fireband Ashford (maybe that’s why GoProposal’s default charges are so high. £340 for a SA100 with employment and dividend income?!). 

Anyway, I digress. What are people’s thought on getting rid of timesheets?

Related but separate question, how about for partners? Do you record all 70 hours a week you work, or just the direct client work (reviews, meetings, consultancy etc)?

The other partner (non-accountant) wants me to record every second I work, incl emails on my phone on the train & at home etc. I’m less inclined to, obviously. Do I get a non-billable code for surfing AW?

It would be interesting to hear what other firms are doing ...?

Replies (15)

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By ms998
12th Jan 2018 09:31

Been a while since I've been in practice but here is my view on timehseets:

Timesheets normally come with targets for chargeable time. If the work is done quickly (eg at a profit) does the employee get punished for not meeting chargeable time?

When it comes to billing, if you have charged all the time spent, does the employee get punished for spending too much time on the client?

Key point here : is the business going to change its fee structure for "loss" making clients or just accept it as a bad year?

As someone working in industry receiving external advice we ask for fixed fee quotes, eg value billing. We do not accept hourly rates (unless work undertaken out of scope with agreement)

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By andy.partridge
12th Jan 2018 09:37

Of course it's sensible to use timesheets, but not for the reason that many assume they are used for.

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By James Green
12th Jan 2018 09:41

My experience is that everyone wants fixed fees until there is a fees dispute and then they immediately want time records.

If the dispute goes the whole way, it tends to be the very first thing small claims judges ask for and they never seems to accept fixed fees.

Like a previous poster we have upfront agreed fees, but keep timesheets to ensure we're broadly within range for the work involved and to substantiate and fee disputes should they arise.

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Caroline
By accountantccole
12th Jan 2018 13:19

I have coped for 5 years without timesheets. Staff track what jobs they were on but only for reference really ( 2 mins to complete at the end of the day and not broken into 6min chunks!) . We do fixed fees for most things, the exception is bookkeeping, where we do log what time was spent but not by the second.
We are a relatively small team, I have a gut feel on which jobs take too long and which are most profitable.
In bigger firms it is probably essential. My old firm insisted on budgets on every job which normally took the junior 15-20mins to prepare, then fudge as the fee wouldn't cover the time, then you end up with demoralised staff and impossible budgets.
I'm not a millionaire though so probably missing a trick by not tracking in more detail!

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By KevinMcC
12th Jan 2018 14:13

My experience in a mid tier firm is that they are used as a stick to beat people with and can be divisive between staff.

The services would be sold as all singing all dancing - but the price would be low to undercut competitors.

After the fee has been agreed, staff would be asked to prepare a realistic budget for the work which invariably would come out a lot higher than the fee quoted - you'd be told to "make it work" what was partner speak for "I'm expecting overtime to be worked - but don't charge it..."

You'd then have aggro between tax, accounts, payroll etc. over where time was coded as nobody wanted to be blamed for the fee going over, and all in all, it lead to a poor working environment, and the client not being properly serviced.

I can see the merits in timesheets, when properly used, but not as a tool to pressurise staff which happens all too often.

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Replying to KevinMcC:
paddle steamer
By DJKL
12th Jan 2018 14:34

But if you churn the work out they are a great way for staff to have a weapon at their next salary review.

When I worked for a firm in the 1990s I kept copies of all my timesheets and totaled my billable hours for the year and my admin hours. I also apportioned my billings re all my fees (allowing something re each for partner reviews and if I got a junior.)

It can then, if salary discussions get tricky,be a useful card to play re, you paid me X but I earned you Y. Back then anything over 3 times salary cost (inc NIER) but ignoring admin hours ,as I did a fair bit of admin, seemed to me ripe for discussion re a bonus or a salary increase.

Having said that I hated completing them and I did work daft amounts of unpaid overtime to bill ahead of hours I was paid.

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By SteveHa
12th Jan 2018 14:51

I should try this, with particular emphasis on things such as R&D claims that are billed as a percentage, rather than on the basis of time. Had one last year with £15k fees for what amounted to a few £100 timed work.

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By SteveHa
12th Jan 2018 14:30

Still using a timesheet, and have done in the last three practices. I can't say I've ever encountered them being used for brow beating, and I tend to have a catchall "Misc" entry for unaccounted time.

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Red Leader
By Red Leader
12th Jan 2018 14:56

Yes, keep timesheets.

You record how much you spend on postage, stationery, rent, software, etc etc, so why not time?

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Jennifer Adams
By Jennifer Adams
12th Jan 2018 19:38

When I was working for other firms I had experience of both – timesheets or no.
When I was at a middle tier well known London firm timesheets were a bug bear. Hated by all staff especially as the time was in 6min chunks so at the end of the day you were always out. What did you record when you went to make a cup of tea for everyone? I remember we had an allowance for 'personal' time but at the end of the week you found yourself having to 'dump' time on one client or another just so the timings worked.
I loved it when I worked for a firm that did not have time sheets – so long as the work was done then the boss was happy but he worked on a more set fee basis.
Now I have my own business I use timesheets but only to remind myself as to what I have done for which client. I use Toggi which is an automatic time recorder so load clients name, detail of work and press go. Problem is you have to remember to turn it off when you take a phone call from another client for example. But it is a way of keeping track of what you have done, the approx time spent and at what time of day the work was undertaken.
As ever with having to prove what you have done - what do you do if you have to do some research? Is it fair that you put that down to the client because you've forgotten something you learned years ago for exams but not touched since?
Time sheets are fine if you can set aside a morning on one clients books but if you are a partner or run your own business and you keep getting calls that interrupt your work flow then timesheets can only be used as a reminder of work undertaken. Then when you come to do an invoice you have some idea of what work has actually been done (assuming that your firm is one that is not set fee).
With staff its more difficult. You have to have some sort of check. I am always reminded of my days of the hated strict timesheet so I dont ask for every single minute to be accounted for. I take all the calls so employees can spend their time on one clients books at a time.

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ALISK
By atleastisoundknowledgable...
12th Jan 2018 21:01

So in global terms it’s the general mix of thoughts & practices that I was expecting.

To all those practices that do make the staff keep timesheets... do the partners record ALL of their time as well? I jump between so many different client/lead gen/business tasks it can take a decent chunk of the day just to work out what my timesheet should say. I have quite a junior team who ask a lot of questions, which doesn’t help (but that’s another issue...).

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By marks
13th Jan 2018 00:17

We are a small firm, myself and 5 staff, but we keep timesheets.

We dont bill on time but have fixed fees and just really use the timesheet to get an idea of the jobs that make money and those that dont.

At the end of the day if costed time is fully recovered then I am happy enough and for the last 2 years our fees v costed time has been just over 100%. Some jobs you make on, some you lose.

Each year I run a report of all fees, costs and the % recovered then sort by % recovered so known when we review fees with clients which ones we are happy to get rid of if they dont accept the fee increase.

I record all my time but as with many owners I can tend to jump between many things over the day wheres the staff tend to be less so. A lot of my time can be spent on emails/phone calls and I charge 2 units (12 minutes) to most emails/telephone call unless merits additional charge. Review of files I generally just charge in 30 minute chunks as suits.

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Replying to marks:
ALISK
By atleastisoundknowledgable...
13th Jan 2018 08:16

Thanks marks, that’s really useful.

Do you have & use time codes for all of the non-client things (lead generation, supplier issues, HR, research, surfing AW...). I’m assuming that as a small practice v similar in size to me, that it’s you that does most of that?

Do you record time against every e.g. email you do on your phone at home?

Thanks, really helpful!

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By Mark Lee
13th Jan 2018 18:26

This debate has been going on for more years than I care to recall.

If you win and retain enough NEW clients without quoting fixed fees AND you are genuinely able to keep billing most clients by ref to the time on the clock - good luck to you.

More often than not, timesheets are more of a management tool (which I understand). Clients generally don't care whether it takes you 4 or 5 hours to do something and will only pay the same fee regardless. Maybe you took longer because you were inefficient or less experienced than they hoped.

Requests for time records when fees are disputed are only legitimate if your engagement terms state that fees are charged by reference to time spent.

Most of the sole practitioners I work with no longer attempt to bill clients by reference to time sheets. They earn more and save the admin time previously spent recording the time, reviewing the figures, writing off excesses and so on.

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By mintern
01st Feb 2022 17:38

We, as employees, have been instructed to complete timesheets having had our successful 6 yearly monitoring visit by the ACCA. We have been told that it is a requirement that timesheets be filled out on a daily basis as failure to do so would mean that we could "fail" on that particular element of the monitoring process next time we are visited. Is this true?

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