What is the 80/20 rule and how to use it to make better decisions

What is the 80/20 rule and how to use it to make better decisions

June 30, 2022

In the never-ending race for productivity, the 80/20 principle seems to be the talk of the town.

Although it might sound complex, you don’t need to be good at maths to figure it out.

Chances are, you have been applying this concept in your everyday life for quite some time.   

Try to estimate how many apps you use on your devices versus how many you installed? In the abundance of choices at a supermarket, we usually go for the same groceries we buy regularly.

You probably create 80 percent of your outfits with the same 20 percent of wardrobe items you possess. 

You can apply the 80/20 principle to supercharge your productivity, too. This rule can help you prioritize better, make better financial decisions, and even learn which professional relationships you should invest in.

So, let’s unlock the secrets of achieving more by investing less.    

What is the 80/20 rule? 

The 80/20 rule implies that 80 percent of outputs (consequences) result from 20 percent of inputs (causes). Simply put, a smaller percentage of our activities count for a substantially larger number of results. As we strive to work smarter, not harder, understanding this concept is essential.  

As a manager or business owner, you are probably challenged by limited resources.

Whether it is time, money, or staff, you need to make the best of what you have.

Applying this principle can help you allocate limited resources to the activities that bring the most profit.

The fastest-growing companies in the world apply this rule. For instance, Apple used the variation of the 80/20 rule when they developed the iconic Apple Newton Message Pad.

In a nutshell, the engineers figured out that “.01 percent of person’s vocabulary was enough to carry out 50 percent of handheld computer activities“. Another IT giant, Microsoft, used this rule to establish that 80 percent of errors root from 20 percent of bugs. 

Although the 80/20 rule sounds innovative, it’s been around for over a century. Let’s explore the amusing story behind it.

The man behind the 80/20 principle

The 80/20 rule is also known as the Pareto principle. The name originates from the prominent Italian economist and sociologist Vilfredo Pareto. Some of his most remarkable contributions include the study of the income distribution, which proves that the allocation of wealth does not happen by chance.     

His complex finding of the uneven distribution of wealth in Italy comes from his passion for growing vegetables.

A story has it that, while growing peas, Pareto realized that 80 percent of the vegetable produced originates from 20 percent of pea pods.

The same ratio was later applied to macroeconomics, indicating that 80 percent of the wealth in Italy was owned by 20 percent of the population.  

How is the 80/20 rule applied in business?

Now that we understand the concept fully, you might wonder how can the 80/20 rule be applied in business?

The rule points to the segments of your business that bring the best results or the most income. 

Some of the 80/20 rule examples include:

  • 80 percent of a company’s output is produced by 20 percent of employees 
  • 80 percent of profit is generated by 20 percent of customers
  • 80 percent of sales are made by 20 percent of sales representatives
  • 80 percent of a company’s success stems from 20 percent of business ideas

The rule does not imply that you should forget about the other 20 percent of your products, services, or clients. It simply sheds light on the segments you should focus on to maximize your business’s impact.  

80/20 rule

What can the 80/20 rule do for you?

The 80/20 rule can help you find out to which areas you should direct your efforts. We all have a limited amount of energy and time in a workday, so we need to make the most of it.

This rule can help you determine the 20 percent of your most important tasks and activities and wipe out less important things and time wasters. 

This concept can help you save time, money, mental energy, and effort.

It can also reduce emotional reactions and decrease stress levels as you focus on what truly matters. The key to success is recognizing which 20 percent of your efforts are pivotal and prioritizing them.   

The principle is universal and can be applied to a multinational company, small business or start-up. Managers, entrepreneurs, and team leaders need to embrace this concept as they need to maximize the results and efforts of the entire team.

The same goes for picking the right projects and closing business deals that will make the most profit. Over-diversification can defeat the purpose, drain your energy and lower your productivity.       

  • Improve your leadership skills with the 80/20 rule

You can upgrade your human resource management skills, improve team communication and successfully conduct an ideation process.

We all know that prompt decision-making is crucial to effective leadership.

Managers and entrepreneurs need to react fast and cleverly to seize the right opportunity for their business. If you try to collect all the information required to make a decision, the chances are that many of the opportunities will pass you by.

That’s why you need to embrace the 80/20 rule in decision making as well.

Collect 80 percent of the necessary information and make the decision in the first 20 percent of the time designated for this purpose.

Successful communication is all about being a great listener.

Let your employees do 80 percent of the talking if you want to improve your team communication. If you talk more than you listen, the chances are that your team expects to be told what to do and how to do it. This can severely impact the progress and growth of your company. 

A great deal of effective leader’s efforts should be put into empowering employees to take action, make decisions and solve problems.

The same goes for the ideation processes. Your employees should be able to think creatively and propose ideas, not just execute tasks. Encourage your employees to get actively involved in the ideation process so that they generate 80 percent of new ideas.

  • Use the 80/20 rule for better goal setting 

Setting goals is critical for every company’s success. It allows you to take control of the direction in which your company develops. Moreover, they serve as a benchmark to determine whether the company is progressing. If the company is not moving towards those goals, it is a clear signal to the management that corrective actions need to be taken.  

One of the core principles in setting and achieving goals is the SMART concept.

Your goals need to be specific, measurable, achievable, relevant, and time-bound. But, once you set your goals, you might wonder which ones should be given priority. Your focus and energy might be scattered to several goals you strive to accomplish simultaneously. 

That is when you should apply the 80/20 rule.

Creating a list of goals will help you set your mind straight on your long-term vision and motivation. Out of let’s say ten goals you wrote down, add value to every one of them based on perceived importance for the company. Calculated value should help you determine the top 20 percent of the goals you set. This directs you to the ones that you should focus on first, as they will lead you to 80 percent of business accomplishments.   

  • Use the 80/20 rule to boost your productivity 

Many people seem very busy when they actually manage to pursue only a small number of their daily goals. Most commonly, this happens when our focus is distorted on a large number of smaller or low-value activities, so people waste their time being busy instead of productive. What needs to be done is to direct our efforts to a smaller number of activities that make a greater impact.

Start with creating a list of pending activities for the next workday. Out of the listed activities, pick 20 percent of those you consider to be your top priority. Use the impact criteria to prioritize, and devote your daily efforts to the most impactful assignments.

When choosing your daily priorities, giving the answers to the following questions can be helpful:

  • Is this task urgent to resolve or of vital importance for my business?
  • Does it bring profit or put us closer to achieving our goals?
  • Can it be delegated or outsourced?

If you are an investment manager, closing investment deals and managing the portfolios of your clients can be your top 20 percent activities. But, you also need to know about available investment grants, incentives, and subsidies. You also need to have all the documentation prepared and data sorted. These tasks can be delegated to other members of the team, giving you the chance to block off your time for the activities that make the most impact.

Read more about how you can measure employee productivity in your team.

  • Be more efficient in resolving issues with the 80/20 rule 

Problem-solving is a daily task for every manager or entrepreneur.

Whether you face customer complaints, product malfunction, or human resource issues, the 80/20 rule can be applied to every problem-solving process. As the problem might stem from several causes, what you need to do is follow these steps to determine the best solution:

  • Pinpoint the issues your company is facing  
  • Trace problems with methods such as Root cause analysis
  • Assign a value to the issues identified depending on the impact they have on business
  • Batch similar problems into categories based on their cause
  • Calculate scores for every group
  • The group with the highest score makes the top 20 percent of problems 
  • Create a problem-solving strategy 

This way, by resolving the top 20 percent of problems, you can mitigate 80 percent of the damage. 

  • Choose your decisions wisely

You make thousands of decisions every day, but not all of them have an impact on your life.

However, the 20% of irrelevant decisions each day can take up 80% of our energy, leaving too little focus for decisions that actually matter.

If you track the time you spend on making different decisions every day, you will see that you can save a few hours every day by eliminating small, trivial decisions.

Establishing habits and patterns and decreasing the number of choices can help you remove the trivial decisions from your plate so you have time to devote to important business decisions.

For example, if you opt for a capsule wardrobe, you will spend less time choosing what to wear for work each morning.

Or, if you schedule your team meetings for the same time every week or month, you don’t need to decide what time slot works best for your team the current week.

Optimize your business growth with the 80/20 principle

We hope this article was both interesting and helpful in understanding the 80/20 principle and what it can do for your business.

In case you need professional support in making most of your resources and maximizing your business impact, do not hesitate to write to our consultants.

 

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How to Minimize Operation Risks in Services?

How to Minimize Operation Risks in Services?

June 30, 2022

Today, more than ever, companies are facing numerous risks.

This is why operational risk management (ORM for short) is crucial to maintaining company stability. It is also a great factor in healthy business growth and development.

The key phases in operational risk management when it comes to providing services to clients are:

  • Identifying risk factors
  • Identifying operational risks
  • Measuring
  • Action related to the risks

Facing a smaller operational risk is not the same compared to a larger one. Also, potential negative occurrences causing great damage is different from causing smaller one.

Hence, the time and resources should be rationally directed towards significant risks.

Firstly, let’s observe the usual operational risk significance matrix.

Operational Risk Assessment Matrix

Operational Risk Assessment Matrix

Low Operational Risk

Low operational risk means there is a low probability of a potentially negative occurrence.

Additionally, the financial damage is also low, even with a negative outcome.

However, it’s important to be careful when making sure the risk is indeed low.

Here are some suggestions on what to do when facing low risk.

  • Assess the potential fines or detriments accurately
  • Low priority of focus and less time spent managing these types of risks
  • Request assurance that the client won’t react poorly if a small detriment occurs. For example, the detriment we create for the client may seem small to us. This doesn’t mean the client will see it as such.
  • Additional caution – can these cases go to court

High Client Risk

High client risk means the total potential detriment is small, but the client may react severely.

This is especially important if the detriment comes from your company’s mistake or oversight. This risk can also cause reputational liability.

The assessed detriment to the client could be small. However, damaging the relationship with the client can reflect very negatively on your business.

High client risk characteristics

  • A situation where the client can take a small mistake very badly
  • You may not be suffering great damage. Yet, you can still lose the client
  • When assessing the risk it’s important to know the characteristics of the person who decides on compensation claims

High Financial Risk

This risk refers to the occurrences that can cause high financial damages to the client. Yet, more importantly, there is still a slim chance for the client to submit a compensation claim.

  • Demands constant improvements in the relationship with the client
  • High priority for focus and time spent on risk management
  • Needs additional assurance that the client won’t react badly in the case of small damages
  • Assess the person making the decisions on compensation claims

Alarming Risk

Alarming operational risk is the risk of occurrences that can cause the client high financial damage.

Additionally, there is a high probability for them to make a compensational claim.

Alarming operational risk suggestions:

  • Determine the risk before signing the contract. Consider whether you should accept the job at all
  • Do you have the resources to cover a high maximum exposure amount? Does a couple of thousands you can make mean more than the 100.000 you could lose?
  • Do you have the resources to provide the service that undoubtedly eliminates all client and legislator dilemmas?
  • Consider terminating contracts for current engagements if necessary

Examples – Think What You Would Do in These Situations

Consulting firm X has a yearly income of 1m EUR and an annual salary of 380.000, coming from 120 clients.

Situation 1:

One of the clients has revenue participation of 25k and a 25% margin. The client sends a new inquiry for an assessment on the previous VAT of 190.000. There are opposing opinions of tax experts on this question.

Due to the fact that your opinion when providing the service isn’t based on practice, and the total loss can be half of your income if the client is sensitive, we suggest avoiding jobs like this.

Situation 2:

The company does VAT returns to a client similar in size and share in the revenue. Due to the increased volume of transactions, the client’s previous VAT amounts to 750.000 per month.

You have a high financial risk in this case. Namely, we need to process a monthly VAT of 750.000, which is double the profit of our company. There could be problems if we make a mistake.

Financial risk

Communicate identified risks timely

Communicate operational risk to your manager

These are the events that should be communicated within your team immediately upon their occurrence or discovery:

  • All business risks – changes in client’s liquidity or profitability indicators
  • Unpleasant or unusual behavior of the client’s staff
  • Disputed transactions and law non-compliances
  • Announcements of changes in management and persons our engagement depends on
  • Service competition appearance
  • Client requests for ’’risky’’ advice or risky services the competition provides
  • Extremely urgent customer inquiries can be especially risky

Communicate the risks to the client

  • Assess whether the client is aware of the risks
  • Inform them about the potential negative effects
  • Transfer the responsibility to the client (draft a disclaimer)

Examples of operational risks and indicators of their causes

Performance of Services

  • Accepting a larger or non-contracted scope of work you are not sure you can execute in the required time and at the desired quality
  • Taking on a job for which there are no resources
  • Oversight of deadlines for service delivery. In other words, poor deadline management
  • Report delay
  • You understand the regulation less than the job requires
  • The client doesn’t submit data on time or fails to provide information important for providing the service
  • The client operates with an offshore zone
  • Finding undocumented services provided to clients
  • Lack of time to fully commit to the client and engagement
  • Errors in reports given to clients
  • Errors in the interpretation of tax regulations
  • Tax control’s negative report regarding risky transactions (fuel, daily wages, representations, benefits, VAT)
  • The risk of the client being surprised by the result of our service

 

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10 Most efficient time management chart

10 Most efficient time management chart

June 30, 2022

Having unlimited flexibility to plan our day requires us to have an added level of discipline in order to organize our work.

Ever since adopting work from home, the desire to multitask has been even greater.

We think we can do the housework while answering our e-mail or watching the children while we are in an online meeting.

There is another story in the office. According to HumanResources, the average employee spends 2 hours 11 minutes procrastinating every day.

When you notice that you are losing focus and postponing all your obligations you may find time management charts to be helpful tools.

What is a time management chart?

A time management chart is an excellent tool and one of the most effective ways of planning your time.

Looking at effective time management charts can help you see things from a different perspective which might help you see any problems with your scheduling.

While many people use planners and to-do lists and these are all great tools, only a time management chart can help you allocate time to all areas of your life.

The right chart will help you allocate time to specific activity types in your day like work, study, family, exercise, etc.

Benefits of using a time management chart

It has been scientifically proven that human brains react better to text and images than text and lists.

That’s why visual methods are some of the best ways to manage time.

Using a time chart allows your brain to think divergently. You will be able to plan more for your week than a simple to-do list for this reason.

Time management charts also eliminate the need to check multiple planners and meeting makers. They also allow you to color activity areas to make it easier for you to look at the information.

Visual time management tools to boost productivity

The size and complexity of charts range from small scheduling charts used to plan daily tasks to very complicated charts used for large projects.

There are many types of time and activity charts, but the following chart types are best suited to user needs.

1. Bar Chart

Time management charts usually have the form of a bar chart.

The main purpose of such a chart is to represent the relationship of events, activities, or actions to time using combinations of words and numbers.

The bar chart is ideal for visualizing recorded hours over time, and you can adjust the chart scale by day, week, month, or year and add a median line to visualize the average. The time is shown on the horizontal axis. Activities are displayed on the vertical axis.

2. Gantt Chart


A Gantt chart is a type of bar chart and it’s the most common time graphical format for visualizing project timing. These Timetables give a visual presentation of the relative timing of the separate tasks that make up a unified project.

With just a look at the schedule, a reader can ascertain the variety of tasks involved in a project and how the tasks are related chronologically.

They are also useful for managing dependencies between tasks.

In a Gantt chart, each major activity involved in completing an entire project or program is represented by a horizontal bar.

You can download here free template chart.

Click to download a Gantt Chart template in Excel

3. Pie Chart

Pie Charts are widely used in statistics and business to explain data and work results, in mass media for comparison (i.e. to visualize the percentage for the parts of one total), and in many other areas.

Also, it is a useful visual tool for personal time management. You can see how you use your time in general throughout the day or week for getting things done.

Click to download a Pie Chart template in Excel

4. Line Chart

A line chart is a type of chart that shows how data changes over time.

You can use this chart for any timeframe, but they are most commonly used in finance, to display day-to-day price changes.

As a manager, you will find line charts extremely helpful to measure the progress of tasks and make adjustments to your project for an effective result.

5. Burn-up chart

 

A burn-up chart is a graph that shows project progress over time.

The chart shows two main lines: one for the overall planned work on the project, and the other for monitoring the work completed so far.

By comparing the work your team has done so far with the total amount of work planned, you can understand how efficiently they are working and better estimate how long it will take to complete the remaining work.

It also helps everyone keep track of how much work is left and investigate if a bottleneck is slowing your team.

6. Flowcharts

Flowcharts are a  type of diagram that describe the process to manage your time and tasks visually. It is a picture of the separate steps of a process in sequential order.

Creating a flow chart diagram of your workday can increase your efficiency and help make your self-directed workday more productive.

This gives you a clear starting point, so you waste less time trying to decide what you should work on.

7. PERTchart

A PERT chart, sometimes called a PERT diagram, is a project management tool used to schedule, organize and coordinate tasks within a project.

The PERT chart template uses nodes drawn as rectangles or circles to represent events and milestones throughout the project. The nodes are connected by vectors, drawn as lines, which represent different tasks to be completed.

It is a great tool when you need to understand the expected time frame during the initial phase of project planning.

8. The Eisenhower Matrix

The Eisenhower Matrix is productivity, prioritization, and a time-management tool designed to help you prioritize a list of tasks by first categorizing those items according to their urgency and importance.

Using the tool, you’ll divide your tasks into four boxes based on the tasks you will perform first the tasks you will schedule later, the tasks you will delegate, and the tasks you will delete.

Making a to-do list is the first step toward getting work done. Then you go through these tasks one by one and separate them by quadrant.

Quadrant  1

These tasks are urgent, so they should command your immediate attention.

When you see a task on your to-do list that you need to do now that has clear consequences and affects your long-term goals, put it in this quadrant.

Quadrant 2

It contains everything that’s important but isn’t as time-sensitive. Since these tasks affect your long-term goals but do not have to be done immediately, you can schedule these tasks for later.

Quadrant 3

This quadrant covers all tasks that are urgent but not important and that can be delegated to others. These tasks need to be completed now, but they do not affect your long-term goals.

Quadrant 4

The remaining tasks are tasks that were not urgent or important. Quadrant 4 covers unnecessary tasks, but also the unrewarding time-wasters contributing to your time crunch in the first place.

9. Pyramid Diagram

Pyramid Diagram

The Project Management Triangle Diagram depicts three main constraints of any project: scope, time, and cost.

These charts are best used when your data is organized in some kind of hierarchical way. The levels indicate some kind of progressive order, like: More “important” to least important.

Projects have to comply with the specified scope, projects should be finished in time and projects need to consume the budget

 Each of the constraints represents one side of the triangle, and any change in budget or timing, or scope affects the entire diagram.

10. Pareto chart

Pareto chart

It is used to analyze problems or causes by time, cost, or frequency of occurrence.

Pareto charts are widely used in the areas of quality improvement and time management.

For a Pareto chart, the bars are ordered by frequency counts from highest to lowest. The length of the bars is shown in units at the left vertical axis,

The right vertical axis can represent the cumulative percentage of the grand total number of occurrences or other totals with a maximum of 100%. The line graph shows the running total as it adds the value of each bar and compares it to the cumulative percentage at the right vertical axis.

The Pareto principle (or 80-20 rule) is a generalization and does not distribute at an exact 80:20 ratio. However, it provides an accurate direction or trend that can be quickly shown in a Pareto chart.

Conclusion

Excellent time management starts by having and writing down a clear plan.

But after that necessarily follows the formation of effective time management charts that can help you see things from a different perspective which might help you see any problems with your scheduling.

Time management applications are always a good idea if you don’t know how to deal with the situation differently. Try Time Analytics to view your completed tasks and track how you’re progressing against your bigger goals.

With a Productivity view, you diagnose the gap between planned and actual results and which projects you’re spending most of your time on.

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What do you need to do before accepting a new client?

What do you need to do before accepting a new client?

June 29, 2022

Accepting new clients is always a big challenge. We never know how much trouble and risk a potential collaboration can bring.

Creating an internal procedure for accepting new clients is crucial. Above all, it should contain a checklist a client needs to pass to qualify as a customer you can work with. Additionally, you should determine the approval process. In other words, you need to select the team members who can approve new clients.

Each mistake in a new client assessment can be very costly.

The following are the key phases in accepting a new client. We have compiled them to help you avoid all potential risks.

accepting a new client

Phase 1 in Accepting the Client

Qualified (Potential) Clients

Ese are the characteristics qualified clients should have

  • An awareness of their problem. Hence, you should see whether they have tried to solve the problem. If they have, research their methods.
  • A firm intention to solve the problem. This is also known as the „no pain no sales“ principle.
  • A need for the services we provide to solve the issue
  • An awareness of the importance of a good consultant
  • The awareness that they need to pay for such consultant’s help

Indicators that the clients don’t have the qualifying characteristics:

  • Sending the inquiry from a personal versus a business email. This can be an indicator that the client isn’t professional enough. Moreover, it can mean that they don’t have a company, which makes their budget questionable.
  • Sending an inquiry as a request for information without asking about your service prices. This can indicate they don’t intend to pay for the service.
  • Asking for a service without showing clear intent to purchase.
  • The service isn’t urgent for them
  • They are using inadequate wording in the communication
  • Inquirer’s position. It is very different to get an inquiry from a CFO versus a production worker.
  • The inquiry isn’t personalized. This can mean receiving an email not addressed to you. In other words, this is a generic email sent to many companies. Clearly, this means the chance of getting the job is reduced.

Based on these indicators, it is clear you can assess client qualifications quickly. This requires very little effort. Hence, there is no need to waste time on unqualified clients.

Phase 2 in Accepting the Client

Risk Assessment of the Client’s Profile

So, you’ve qualified the client as potentially acceptable in the previous phase. This doesn’t mean you can accept collaborating with them without checking other factors.

Thus, it is important to create another procedure in this phase. The procedure should answer the following questions:

  • Does the client understand what they can expect from us?
  • Do we understand the client’s needs?
  • Do we have the capacity for the job? Can we meet the deadline?
  • What are the client’s plans?
  • Is the client liquid? There are many free tools and bases that check whether the client’s bank account is blocked. You should also check their balances and other relevant factors.
  • Is the client ready to deliver anti-money laundering documentation? This is important if your company is obliged to have it.
  • Does the client perform specific or unusual transactions?
  • Do we have external recommendations for the client?
  • Does the client have ethical and corporate standards?
  • Are they ready to accept unfavorable conclusions?

If the answers to the previous questions are positive, you are very close to accepting the client as an adequate customer we can collaborate with. Yet, we suggest going through another phase. This will prevent additional risks during the project.

Phase 3 in Accepting the Client – Negotiation

Is the Client Ready to Accept Your Contract?

  • You can send a generic contract or terms of business to the client. In the case of more important clients, we suggest creating a contract with them in mind. You should consider the specific risks the client brings in said contract
  • Determine work scope limitations. In other words, define what is and isn’t entailed by the contract
  • Limiting responsibilities, financial and time-related, is mandatory
  • Define the terms that make your services completed
  • If you offer consulting services, the client should be aware that you are advisors. The client is responsible for applying your service’s results
  • Risk remarks – you should make the client aware of accepting risks

Conclusion

There is no doubt that sales are extremely important. Yet, sometimes even a large profit isn’t important if you create a relationship with a problematic client. Sometimes, the risks can be a result of working with a single client that can exceed the total profit of the operating profit or sales.

So, before starting a relationship with a client, you need to have a checklist of characteristics the client needs to have to be accepted. You also have to establish procedures and determine responsibility within your company. To put it simply, you need to know who can approve the new clients based on the checklists.

 

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10 Types of Consulting fees: Maximize your revenues

10 Types of Consulting fees: Maximize your revenues

June 29, 2022

In the service business, in the bottom line, it is all about fees.

Knowing your clients is the most important factor when it comes to determining the type of fees. There are some key questions you should ask yourself. How big of a problem are you solving for them? How did they pay for the service you provide until now? And, most importantly –  how much do they trust you?

Your end goal should be to maximize the percentage of accepted propositions you send. Yet, it should be accompanied by an adequate profitability level.

That is why it’s important to predict the client’s reaction to the suggested fee type. Only then can you choose the right one.

1. Hourly-based consulting fees

Whichever way of forming prices you use with your clients, at the end of the day it all comes down to time. Each service company is really selling its time. Everyone in business knows how important that resource is.

That is why hourly billing is the most direct way to determine fees from the consultant’s perspective.

Pros of hourly-based fees

  • They enable better profit management on projects. In other words, the price of a working hour is clearly defined, as well as how much you charge for it.
  • If transparent, this is the most honest method, as you are selling your time
  • They allow you to weigh each team member’s work. You can track how profitable each team member is, as they all have their labor and billing rates

Cons of hourly-based fees

  • Clients can be sensitive to this method of determining fees
  • The lack of trust on the client’s side. They may question if you are tracking your hours fairly
  • The clients can’t determine how much work you can do in an hour. Hence, they can wonder whether you’re working efficiently or not
  • The client doesn’t have a fixed project budget. Simply put, they have a lack of control over their expenses
  • You may be able to fix a client’s important and large problem in 5 hours. In such cases, they are prepared to pay more than your hourly fees
  • In the long run, hourly-based rates can be costly. That’s why they’re unsustainable for the client

Tips for maximizing revenues based on hourly billing

This way of determining fees isn’t something some clients are used to. In this case, you will have to conduct a client analysis. You should check whether specific clients are ready to accept the fee you determine this way. A client can indicate that they don’t prefer hourly billing.

In this case, it’s best to avoid this method of determining fees. You can increase the probability of getting the job by using a fixed fee, for example.

The key aspect of determining this type of fee is building trust with the client.

It is simpler to introduce this billing method with the clients you have been working with for a long time. They will have proof you are fair and transparent.

Transparency is one of the main trust factors. Thus, it is important to use time tracking software.

This way, you’ll be able to show the client who has worked for them. They’ll be able to see which tasks they had to do too. Finally, the number of billable hours invested in the project will be clearly defined.

Time tracking has a lot of advantages. One of them is reducing the drawbacks of this type of fee determination. For example, you can always track hours per project, billable, and non-billable. Then you can show the client what you’ve been working on. Time tracking systems increase the transparency of your work.

Additionally, you can create special accounts for your clients. This way they can track project hours as well.

Our final suggestion is to use this type of fee for ad-hoc projects. Those are the projects you don’t expect to repeat. Ongoing payment based on hourly rates can be expensive for the client in the long run.

The Knowledge Paradox

’’When I started my consulting business one inquiry on tax optimization took me 10 hours to complete. I used to charge those jobs $100 per hour. Hence, my total fee would be $1000. After 5 years of experience in the field, I’ve obtained a lot of knowledge.

Now I can do the same job in two hours. Does that mean I should charge $200 for it? It is a total paradox that I should charge less due to the fact that with time I managed to learn and work faster.

That is why I always account for the scope of the problem I’m solving for the client. That is the primary factor in determining my fees.’’

Specific vs. Blended hourly rates

Your rates can be structured on the account of your consultants’ different positions. Are the clients hiring a partner or a manager, a senior or a junior? On the other hand, you can simply offer a blended rate as the expected weighted average hourly fee.

If you’re determining fees based on employee seniority, you’ll be able to accurately allocate the income of each team member. This will allow you to assess each employee’s performance more efficiently.

2. Hourly billing with cup

This method is the same as the previous, with one difference. Namely, in this case, the client receives an assessment of the hours of engagement. Hence, they’re able to project their expenses. For example, we will state that an engagement will take 30 to 40 hours.

This way, the cup fee with the hourly rate of $100 is $4000 at maximum.

This way we are keeping control over our profitability. Yet, er are also giving the client the chance to have a sense of control over their expenses.

However, this method of determining fees can lead to project profitability disturbance.

Namely, we have limited our time. However, the client can always have additional questions and go over our expected number of work hours. If we ask for an additional fee, in this case, the client can be discontented, or, in other words, disloyal. Hence, we may have to terminate collaboration with them. Otherwise, our accomplished hourly rate can go below the expected limit.

Due to all of this, this type of fee is very similar to fixed rates.

3. Consulting daily rates

This type of fee is typical for large projects. This includes multiple consultants included in a long-term project.

To determine this fee it is important to keep in mind how much a day of your consultant costs.

Then you can create a daily rate for each one based on the cost-plus method. That is why it’s important to accurately calculate the price of an hourly billing rate. Don’t forget that you need to include the overhead rate besides the pay rate into the daily cost rate.

All suggestions given for hourly-based billing are also applicable for daily rates.

4. Fixed project fee

This is the most common method of determining prices in the service and consulting industries. The clients show the least amount of resistance toward this type of price negotiation. However, this method is very risky for consultants. Especially so if they don’t have a profitability planning and control mechanism for each project.

Usually, these projects can reduce the company’s profit.

This is true due to the fact that things often „come up“ on a project. These things require additional time and resources you cannot charge for.

Pros of fixed consulting fees

  • Greater probability of getting the job
  • The client has control over their budget
  • As a consultant, you can also improve the quality of your budget

Cons of fixed consulting fees

  • The client can be demanding. They may ask for more detailed analyses of your claims
  • Usually, it happens that many aspects remain unpaid for
  • Non-billable hours
  • You can never assess the time needed for a project accurately when forming the offer
  • You need a good tracking tool. Otherwise, you won’t have the insight into a specific project’s profit

Tips for maximizing revenues based on hourly billing –  fixed project fees?

Before determining the fixed fee you need to get an insight into the time you’ve spent on similar projects in the past. This should be done whether the job was for that specific client or someone else. This can give you a good indication of how much time you can expect to spend on the planned project.

Talk to the different members of your team. Ask them for an assessment of the time they’ll need. This is how you’ll increase the quality of the total assessment.

Assess the issues that can crop up during the project. These are the factors that require an unusual expenditure of time and other resources.

Limit the time of the engagement (note the next fee determination type).

You can create a procedure or a checklist of all factors that come into determining a fixed project fee.

5. Fixed project fee with limitation

Some engagements can allow you to limit the time or the number of services available for a fixed fee. For example, a fixed fee can be $5.000. This sum can include a maximum of 40 working hours and two meetings with the client.

You need to clearly define what goes into your engagement. More importantly, define what does not.

This way you’ll be preventing potential new questions after the project is finished. Be careful, as those additional questions can deteriorate the project’s profitability.

As you can imagine, this method requires accurate tracking of the time spent on a client.

6. Fixed project fee + hourly fee for exceeding hours

This method represents an upgrade to the previous one. For us, as consultants, it is important to charge for all the hours we spend. On the other hand, the client needs to have control over their budget. Hence, this method of determining fees can be a good compromise.

Realistically, you are estimating the number of hours needed for the project. At the same time, you are informing the client about hour consumption. This addition – an hourly fee for exceeding hours – represents a certain shield for new client questions.

So, the client will subconsciously bother you less. They want to be sure they won’t exceed the number of hours you’ve agreed upon and get additional expenses.

This way you’ll have the say over your profit. At the same time, the client has the possibility to control their expenses.

This method isn’t very common and widespread. Hence, its negative aspect is that it can seem strange to the clients.

7. Range fixed fees

This type is the same as the previous, with one difference. With this method, we give the client the range of hours within which we’ll operate. When the client sees the range they subconsciously ask themselves whether the consultant will charge for more hours.

They may also wonder why would the consultant invoice for a lower number of hours. After all, the client has already accepted the highest possible number.

We believe this method is extremely fair. It also requires a lot of trust from the client.

That is why we suggest you use this method with the clients you’ve already formed a collaboration with.

8. Retainers

A retainer is a fixed fee for ongoing work usually paid on a monthly basis.

Pros of retainers

  • Providing certain income security
  • Providing better resource and budget control
  • Gret basis for up-selling and cross-selling
  • Enabling you to get to know your clients. This way you can create better relationships with them

Cons of retainers

  • Once you set the price the clients can object to increases in prices due to the increase in the volume of work
  • You need to keep track of time to calculate true profitability on the client basis

Tips for maximizing revenues based on retainers

  • Include the possibility of a fee increase in your offers and contracts
  • Specify that you will be tracking project time. Add that if the number of hours exceeds X the price will increase
  • Include the possibility of price correction due to a potential increase in retail prices
  • Increase transparency. Add an appendix that shows hours per project to the invoices
  • Discover your client’s other problems. Then give them an offer for other services
  • Track client satisfaction through questionnaires

Retainer means long-term cooperation. Thus, it is especially important to understand

  • Client risks (business and financial)
  • Key management characteristics
  • Client transactions
  • Client’s business ethics
  • Plans and intentions

9. Success fees

A success fee is applicable if you need to make a complex transaction that has a measurable worth. Some examples include advising with property sales, mergers and acquisitions, providing funds, etc.

Pros of success consulting fees

  • The fees are usually very high. Sectors within large consulting companies are multiple times as profitable as sectors with fixed fees – EY, McKinsey, etc.
  • Clients usually consider this a fair payment method. To put it simply, they will rather pay more after the problem is solved than pay less for an attempt at solving it

Cons od success consulting fees

  • High risk when charging
  • If a client makes a mistake the deal can fall through. Consequently, so can your fee. In other words, there is a lack of control problem

Tips for maximizing revenues based on retainers – Success fees?

Is the probability of solving the client’s problem or transaction relatively high? In that case, you should use a success fee as a payment method.

We recommend combining success fees with other fee types. That is, it is too risky to make the success fee the primary or only way to realize the fees. For example, you can use the historic trends and make the ratio of fixed and success fees 60/40

Pay attention to the resources and expenses you use in the projects where you charge the success fee. We suggest using this fee in cases when there aren’t large resource expenses. Otherwise, a great amount of effort and funds can be spent in vain, and losses irreparable.

To avoid any misunderstandings, it is important to accurately define what is considered a success. In other words, define when the conditions have been fulfilled.

10. Variable fees (fixed fee + success fee)

Practically, this is a combination of fixed fees and success fees.

The advantage of this way of determining fees is that you can make sure you’re never at loss. Your fixed fee will make sure you can cover the expenses (and a part of the profit). Additionally, in the case you succeed, you can get great benefits.

On the other hand, once a client pays for something, they subconsciously give themself the right to ask questions and waste your time. Hence, many consultants, even though it may seem like a paradox, avoid fixed fees with projects like this.

Basic factors to keep in mind

Whichever fee type you prefer, we suggest looking at the following questions before determining the fee.

  • What are the scopes of the problem you are solving? What is the risk you are reducing? How big is the optimization we are making through our services?
  • What are the client’s pain indicators?
  • How complex are the client transactions that represent your engagement?
  • How complex is the client’s work? Does that affect your engagement?
  • Do we know the decision-makers? What is your relationship with them?
  • Does the service bring the client added value and how important is it for them?
  • Do they need the service urgently?
  • What are their alternatives if they don’t hire you? Who is their other option?
  • What is the minimum price you wouldn’t accept?
  • What would the competitors’ price be? Check in with your contacts.
  • How many hours will we need? What is your standard hourly billing rate?
  • How suitable is the client to create long-term collaboration and cross-selling?

Internal analyses before determining fees

Most consulting firms don’t have mechanisms to track key performance indicators. These KPIs can be an important basis for fee determination. They are:

  • Time utilization (total billable hours divided by total hours)
  • Historical billing rate (total fees divided by total billable hours)
  • Competitors’ billable hourly rates
  • The percentage of concluded contracts compared to the number of sent offers by the type of fee

If you have goal performances, the fee determination policy should be defined in a way that helps you achieve said performances.

Final suggestions

In the end, before you determine the type of fee and the fee itself, you will need to:

  • Make sure that the client understands the specific service they are receiving. They need to know what falls in the scope of our work and what doesn’t. Inform them when your work is done, and what could be the objective of an additional engagement
  • Make sure that you understand the scope of your work. Inform your team of the specific service you will be providing, and understand whether you have the internal capacities to provide high-quality services in due time
  • Make sure that you keep records of time across multiple clients, projects, and tasks
  • Make sure to provide the client with a list of tasks you’ve performed. The tasks themselves should also contain the time they took to complete

The better your relationship with your client is, the more you’ll be able to use the advantages of these types of fees. Since you are working in the time of digitalization, keep in mind that the quality and transparency can be significantly increased by using different consultant tools related to project and productivity management, time tracking, and others.

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15+ Time Tracking Software with Invoicing

15+ Time Tracking Software with Invoicing

June 28, 2022

Invoicing is one of the most important functions a time tracking platform can offer. Simply put, you will want the hours logged in the software to be accounted for in your invoices and detail the effort and resources invested in a specific project. this way your bills will be accurate and all tasks and resources accounted for.

This is why many time tracking solutions also offer billing and invoices features. However, finding the one that suits your business and practices the most isn’t an easy task. That is why we want to present you with a choice of time tracking solutions with invoicing.

Hopefully, some of them will pique your interest.

1. Time Analytics

Time Analytics is a software solution that offers the possibility of exporting data in Excel and creating invoices from that. Managers can set hourly billing rates for their teams, and users can adjust those rates additionally when needed. The system allocates these billing rates according to the project and client the person has been spending their time on.

The time tracking component of the program has two modules. The first one allows users to enter their time logs manually into the timesheets. That is to say, the employee can finish a task, see how much time they’ve spent on it, and make a time entry. The second option relies on using an automatic time clock. The clocks are connected to tasks and projects, so all the user has to do is start the timer once they start working and turn it off when they’ve finished. The information is then transferred to the timesheet.

The software has a very intuitive and clean interface, designed to be used by anyone, no matter their computer skills. The employees can create timesheets in mere minutes each day. In other words, Time Analytics won’t take away previous working time, but will still be able to take notes about everything happening at the office on any given day.

If you want to make sure all employees fill in all necessary data, Time Analytics gives you the option to set up time tracking forms with mandatory fields. The employees will get a notification if they haven’t submitted their timesheets for a week.

The software offers a large variety of reports even though it’s that easy and quick to fill. The reports go deep into the inner workings of your business and you can use them to identify both prominent and underlying issues. You will receive graphic reports that will show your top-performing clients and employees.

Features

  • Time tracking – track the time your team spends on different tasks and activities. Make sure you’re delegating tasks justly and according to each team member’s capabilities. When you track the time in your organization for a while you will be able to recognize how much time a future project will take.
  • Billing and invoicing – export your timesheets in Excel and add them to your invoices. This will give your clients information about all the different tasks and resources that went into their project. Thus, you will be able to account for any questions or misunderstandings.
  • Time off tracking – your employees can make time off requests and the management can see, review and approve them through the app. There are eight different types of paid time off to choose from, that cover all reasons for employee absence.
  • Reporting – Time Analytics takes all the data your team puts in and turns it into beautiful visual graphs. This will help business owners and managers understand their organization’s strengths and weaknesses, helping them make plans for the future.
  • Intuitive interface – it doesn’t matter whether your employees are computer mavericks or not – they will be able to use the program. The interface is extremely user-friendly and allows anyone to track their working hours with ease.

Pricing

  • Free
  • Starter – $4.99 per user per month
  • Optimum – $6.99 per user per month
  • Premium – $12.99 per user per month

You can give Time Analytics a try for free with our 14-day free trial.

2. TimeCamp

TimeCamp is a time tracking solution with an invoicing feature. It allows managers to set up billing rates per employee, client, and project. this means you can customize the rates according to the contracts.

The time tracking feature allows the management to compare the realized work to their predictions and assessments. The same applies to budget notifications, which make sure you know when you’re overstepping your predicted budget.

The platform scans the apps and web pages the users interact with during their working hours and automatically groups them into specific projects and allocates the time to clients. This is a completely automatic process, and the app won’t take away any productive time.

Features

  • Time tracking – a completely automatic time tracking system
  • Billable hours management – make sure all billable hours are accounted for and billed properly
  • Productivity tracking – receive reports on employee productivity based on their activity

Pricing

  • Free
  • Basic – $7 per user per month
  • Pro – $10 per user per month
  • Enterprise – custom plan

Trial period

14 days

3. Teamwork projects

Teamwork Projects employee timesheet software solution

Teamwork is a time tracking platform that has a decently strong invoicing feature. It may not be the best on the list, but the platform offers integrations with billing tools like Xero and QuickBooks, which makes charging your clients very easy.

The platform has a project management aspect, which compares the time a project takes to your predictions. This means you will get more and more accurate with assessments, which will help you build a reputation with your clients.

Teamwork has a real-time tracking option, as well as a communication feature. These make sure you can fix any issues on the go as soon as they happen and before they grow into larger problems.

Features

  • Chat – let your team communicate instantly without long email threads
  • Collaboration – share important files instantly
  • Invoicing – make sure to never forget to charge for billable time again

Pricing

  • Free
  • Deliver – $12.50 per user per month
  • Grow – $22.50 per user per month
  • Scale – custom plan

Trial period

30 days

4. Harvest

Harvest is one of the most popular time tracking solutions currently available. When it comes to invoicing, the platform uses the data received through tracking. It takes the time and expenses related to a specific project and allocates them to the corresponding client.

This solution is very convenient for organizations that opt to receive their payments online, as it integrates with Stripe and PayPal. The accounting aspect of billing is also solved through integrations with QuickBooks and Xero.

The software is available on desktop and mobile, as well as a browser add-on, which makes it a great solution for teams on the go.

Features

  • Time tracking – capture employee time across all devices
  • Billing – allocate expenses to clients and get paid online
  • Reports – receive reports based on captured time and activities

Pricing

  • Free
  • Pro – $12 per user per month

Trial period

30 days

5. Toggl

Toggl is one of the most beautifully designed time tracking software solutions on the market. It gives its users the possibility to track billable time with multiple clients, tasks, and projects through a single click. f

Trial period

No information

9. Hubstaff

Hubstaff is one of the most popular time tracking solutions at the moment. The app is available for desktop, mobile, web, and Chrome. Besides tracking time, the platform measures employee productivity. This is done by monitoring the apps and URLs the employees use during work hours. you can also opt to take screenshots of their devices.

You can pay your employees and charge your clients through the app. The invoices are created from the time log data. All activity is added to employee timesheets, so there can be no confusion about the salaries. The same is applied to invoices, as you will deliver data on all the details of the project to the client.

Features

  • Time tracking – track time accurately through a few simple clicks
  • Billing and invoicing – account for all time needed to bring a project to fruition
  • Monitoring – make sure you are paying your employees for their work

Pricing

  • Time Free
  • Time Starter – $7 per user per month
  • Time Pro – $10 per user per month
  • Enterprise – custom plan

Trial Period

14 days

10. FreshBooks

FreshBooks online timesheets for managing time

FreshBooks is one of the most popular accounting software solutions on the market. It is geared toward different business models – freelancers, organizations with employees, and businesses that hire contractors.

Besides the purely accountancy-related features, the software also offers time tracking. This feature is automatic and allows easy use with only one click. The data is then transferred into time logs used to create invoices.

The software gives a lot of attention both to the functionality and the aesthetic of its invoices. You will be able to add your company’s logo and personalize the document in mere seconds.

Features

  • Time tracking – use automatic timers for accurate time logging
  • Billing – send professional and accurate invoices
  • Accounting – all you need to keep your business running smoothly

Pricing

  • Lite – $15 per month
  • Plus – $25 per month
  • Premium – $50 per month
  • Select – custom plan

Trial Period

30 days

11. Active Collab

This solution combines time management, project management, and billing. It allows users to plan their projects and track their progress. The application offers a good deal of personalization, so every employee can choose a theme they enjoy and make their experience using the app more fun.

Transparency is one of the platform’s biggest priorities. In other words, you’ll be able to create a plan, add deadlines for different milestones, and see whether you’re staying on track.

Time tracking and invoicing are tightly connected in Active Collab. This ensures the invoices you send your clients will be detailed and accurate to avoid any confusion.

Features

  • Time tracking and invoicing – track employee time and turn that data into accurate invoices
  • Time and project management – make sure all the phases of your project are done in time
  • Collaboration – share a common calendar for more convenient planning

Pricing

  • Free
  • Pro – $7 per user per month
  • Plus – $9 per month for 3 members

Trial period

14 days

12. Scoro

scoro time tracking apps for IT firms

Scoro is a time tracking solution that also has billing and work management features. Its goal is to be the only tool a company will need to manage its business successfully.

The billing feature accounts for both billable and non-billable hours, so you can track your utilization rate with ease. You will receive reminders and can set up automated recurring billing.

Other features include client, project, and task management, which enables you to manage your business and make accurate estimates. The platform also delivers accurate and visual reports you can use to plan your future steps.

Features

  • Time tracking – a built-in timer that tracks time spent on tasks
  • Project management – assign tasks and track the progress of different projects
  • Invoicing – generate itemized invoices that show all the work that goes into a project

Pricing

  • Essential – $28 per user per month
  • Standard – $42 per user per month
  • Pro – $71 per user per month
  • Ultimate – custom pricing

Trial period

14 days

13. Zoho Invoice

Zoho Office Suite offers Zoho Invoice, a tool that allows employees to track the time they spend on different tasks. This time is then allocated to different clients, and transformed into accurate invoices. We recommend using this invoicing software if you think Zoho’s other features are a good choice for you.

The platform creates professional invoices and allows you to choose from a multitude of templates you can further customize with your company’s logo. You can issue invoices in multiple languages and the platform supports multiple currencies as well.

Finally, there is the option of setting up recurring invoices if you bill monthly.

Features

  • Time tracking – collect the data you’ll need to create accurate invoices
  • Customization – make the invoices reflect your company with templates
  • Languages – you can issue invoices in multiple languages

Pricing

  • Free
  • Standard – $15 per month
  • Professional – $30 per month

The prices reflect only the Invoice feature

Trial period

No information

14. Paymo

Paymo plan and schedule your team's projects

Paymo is a lightweight time tracking solution that offers multiple features – project management, time tracking, and billing and invoicing. You can create boards, assign taasks and create workflows that predict important milestones. This way you’ll be able to track whether you’re on time and within budget.

Paymo allows users to get paid fairly for the work they put in. Time tracking allows for this, as the expenses and working hours are allocated to corresponding clients. The data from employees’ timesheets is automatically turned into invoices.

The software also offers an element of collaboration, as employees can start discussions related to specific tasks.

Features

  • Time tracking – track time through web timers, desktop widgets, etc.
  • Billing – create and send invoices according to the time worked
  • Project management – create workflows and track project progress

Pricing

  • Free
  • Starter – $5.95 per user per month
  • Small office – $11.95 per user per month
  • Business – $24.95 per user per month

Trial period

15 days

15. Clicktime

Clicktime easy online timesheets

 

Clicktime is a time tracking software with invoicing functions. It tracks billable and non-billable time, so you’ll be able to both deliver accurate invoices and calculate employee utilization. The solution relies on timesheets for easy budget management and project planning.

The platform prides itself on accurate and insightful reports. The software collects data that is turned into accurate and specific data that will answer your specific questions with ease. This information is crucial if you want to improve productivity and budget more accurately.

As you can set billable and non-billable hours within the platform, you will be able to calculate and bill your employees’ billable work with ease.

Features

  • Timesheets – get information on your employees’ activities
  • Reports – accurate and useful reports that answer your questions
  • Project management – plan and oversee your project’s progress

Pricing

  • Starter – $13 per user per month
  • Team – $17 per user per month
  • Premier – $28 per user per month
  • Enterprise – custom plan

Trial period

14 days

16. Bill4time

If you are looking for a time billing software for your law firm, bill4time could be just the solution for you. The software was designed specifically with law firms in mind and focuses its tools on managing cases, administration, and making the most out of billable hours.

The platform makes sure you are able to create pre-bills, statements, and invoices in only a couple of clicks. It gives your firm the ability to set rates and late fees, and even choose the currency you want to be paid in, which is a great option for firms with international clients.

The biggest advantage of this software solution is the fact that it has a client portal. In other words, you can deliver invoices and receive payments through the app itself.

Features

  • Time tracking – one-click automatic timers that prevent any billable hours from being uncharged for
  • Invoices – create attractive and detailed invoices with multiple currency choices
  • Case management – plan, organize, and track the progress of your cases

Pricing

  • Time & billing – $29 per user per month
  • Legal pro – $49 per user per month
  • Legal enterprise – $89 per user per month

Trial Period

14 days

17. Beebole

 

Beebole’s is a streamlined time tracking and billing software that aims to make the entire process as simple as possible. It allows its users to set budgets and monitor both the expenses and progress of the projects in real-time. This way you’ll be able to stay on track and notice potential issues as soon as they occur.

The system relies on automatic time clocks you can start with a single click from any device or location. The system delivers detailed and accurate time reports for all employees, including their billable and non-billable hours.

As time tracking requires selecting the client and task the employee is working on, it is incredibly simple to allocate time and expenses to specific clients.

Features

  • Time tracking – track the time you spend on tasks and clients
  • Budgeting – set a budget for all projects and monitor whether you’re staying on track
  • Project management – keep an eye on all your projects

Pricing

€ 6.99 per user per month

Trial period

30 days

Conclusion

Time billing is a crucial part of any business. understanding how much you are making and which employees are bringing in the most profit keeps all organizations afloat. That is why having reliable time tracking software with invoicing makes all the difference.

This type of software can help you save time and energy needed to create invoices and makes sure you are charging fairly without losing any billable hours in the process. we have selected 17 of the best time tracking software solutions that offer billing and invoicing services. We hope you’ll find just the right one for you.

 

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When Is The Right Time To Augment Your Staff To Grow Your Business

When Is The Right Time To Augment Your Staff To Grow Your Business

June 28, 2022

Every company needs to be flexible to churn out quality solutions constantly. In addition, as the market changes, it requires quick product releases and specialized skills.

Using in-house staff to meet these demands is usually not a good option since it can be costly and tasking to perform recruitment. So, most companies opt for staff augmentation, which will give them the capacity boost, control, and expertise.

Let’s find out below the right time a company can augment its staff.

staff augmentation- business meeting

When In Need Of Talents

When you have an on-going project and your in-house staff are occupied with other duties, you might need the access of people with certain skills. With Staff Augmentation Companies you get access to professionals who can seamlessly fill in for your in-house team for a particular period and for little cost.

With this, you get to scale your project and also transfer the project to the staff augmentation team.

When In Need Cost-Efficient Service

At some point in your business, you might be low on funds, so opting for staff augmentation might be cost-effective. In addition, staff augmentation has a transparent cost structure. So there is no worry about organization or administrative expenses like workstations, office space, or other facilities.

Instead, you need to pay the fee while the company arranges other things, then you place your focus on your principal business undertaking.

When Launching Quickly

Sometimes, you might need to launch some product or service quickly, and your in-house staff cannot meet the demands. So as an effective business strategy, most businesses usually choose staff augmentation to develop a good product within a time limit, find customer-oriented solutions and reduce the time to market period.

Flexible Workforce

With staff augmentation, you have a flexible workforce that helps scale up or down based on the business workload. For example, your business might have positions that need to be filled, or it might be experiencing an increase in sales. As a result, you might need contractors or temporary workers to help meet your business demand without spending much on hiring full-time staff.

When In Need Of Better Control

As against full outsourcing, staff augmentation would allow you to control all business projects and monitoring. You might not be able to fully track your business if you outsource your project since the quality and progress are hugely based on the outsourced team.

But, with staff augmentation, you get to place the staff in any position where you need efficiency. Additionally, it helps reduce security risks and privacy, which is quite common with outsourcing.

Conclusion

Using the services of a staff augmentation company is essential for most companies. With staff augmentation, you get to scale and adapt. Staff augmentation is also a good solution if you want to take the workload off your in-house team or even when you have a side project that might be taxing to your team.

Close communication and team integration, economic costs, and flexibility are some benefits you get to enjoy when you use the services of staff augmentation companies. Staff augmentation is currently in demand since businesses are now searching for ways to save money and other options that would increase team productivity.

 

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How to cut down non-billable hours?

How to cut down non-billable hours?

June 27, 2022

According to DocuSign, Companies, on average, spend as much as 16 days a year looking for paper documents. Also, at least 23 hours per week senior managers spend in meetings.

This proves that non-billable hours are a necessary evil. If you know time is money, you will try to minimize those hours as much as possible while still being sure the work you do is still up to standards. So, how to reduce such non-billable time? We will learn in detail.

What are non-billable hours?

First,  let’s clarify what non-billable tasks are in general. Common examples of non-billable time include:

  • Prospecting, marketing, and other activities related to business development
  • Invoicing, processing payments, and other administrative tasks
  • Employee recruiting and training
  • Internal marketing
  • Proposal writing
  • Client communication
  • Pitching to new clients
  • Taking training courses to improve your skills
  • Networking and Conference appearances
  • Any work that is beyond the scope of the project

Thus, we can see that non-billable hours aren’t directly connected to the projects, and as such can’t be billed. On the other hand, billable hours can be directly invoiced and billed to the client.

All the abovementioned tasks take up a huge part of your time, which makes them an expense to the business. If you haven’t optimized them well, they can cost you more than you expect. That’s why tracking non-billable hours is crucial to keep your business efficient.

Another question arises – How can you use your time as efficiently as possible, spending as much of it on billable and not non-billable hours? Before answering that, we will observe why tracking non-billable hours is important.

Why track non-billable hours?

Knowing the percentage of billable time within the total hours is crucial in the process of reducing the number of non-billable hours. This percentage, also known as the utilization rate, directly affects the result.

To improve the utilization rate, the company must focus on tracking billable as well as non-billable hours accurately. Each wrong measure will reduce the total billable hours and create mistakes in assessing the billing rate.

Here are just some of the reasons to track non-billable hours:

  1. Determining fees: Some clients can cost your business more if you spend more non-billable hours on them. Identifying the clients that make your employees have more non-billable hours can solve the issue proactively. One of the solutions can be adjusting the prices for future projects, as well as any other solution that will increase your profitability and billable hours on the project.
  2. Development and new knowledge: Expanding knowledge and obtaining new skills are very important for the professional development of the employees. Tracking the non-billable hours shows exactly how much time the company dedicates to the employees’ development.
  3. Deciding whether you’ll accept the project or not: Analyzing the ratio of billable and non-billable hours – that is, how much time your employees spend on a project – will let you know whether the project is profitable.
  4. Time evaluation: Tracking non-billable time will show that it is equally important as the time spent on billable work. Tracking non-billable hours can give you a more precise impression of the real value of your time, and let you know how to get more quality from it.

5 tips to reduce non-billable hours

1. Identify what is a non-billable task and what’s not and set rules on billable activities

The most important issue, now that you know the difference between billable and non-billable hours, is determining activities that represent non-billable tasks for you.

It is important to understand there is no universal answer to this question, and that you’ll have to determine what’s billable on your own. Investigate how your competitors charge and think about what your clients will tolerate, as well as what is ethical and correct to invoice.

Above all, make sure that your client is aware of all expenses, so they aren’t surprised when they get an invoice with unexpected expenses.

2. Automate repetitive work

According to a study, almost 70% of employees believe 40% of their time is spent performing routine tasks. You can imagine the effect on company profitability if that 40% were to be spent on more significant work. Automating these tasks by implementing new technologies would make efficiency and productivity reach their maximum.

Hence, the reason for automation is to delegate repetitive menial tasks, so the employees can dedicate their time to the tasks that will be counted as billable. The automation itself can reduce administrative task time by 10+ hours a month.

You will face a problem if your employees resist learning something new. Old and manual processes seem easier to them while relying on technology to simplify basic processes can create frustration and a feeling of wasting time and effort on the change.

Only when you create a collective understanding of the importance of losing a great amount of time when using manual labor, the company can become more cost-effective and successful.

An example of automation is using time tracking software, explained below.

3. Use automatic time tracking software

Tracking time wrong and project overrun reduce total billable hours. Tracking tasks such as administrative manually can significantly impact your workflow and profitability.

The best way to determine the number of hours spent on each task is using time tracking software. The data you will receive will help you identify exactly what takes your employees’ time. You will be able to find ways for them to manage their time efficiently.

Using time tracking tools like Time Analytics offers real-time tracking, which enables all work hours to be recorded accurately. If you still haven’t implemented a system like this one, mistakes are bound to happen. The result of not using an automated system can lead to a timesheet not reflecting accurate time spent on the project, which can result in a lower number of billable hours.

Reports these software solutions deliver can significantly simplify decisions like redistributing tasks to the employees to more efficiently in completing them.

4. Outsource the non-billable tasks

If a high number of non-billable hours affects your productivity, the best option may be to outsource certain activities.

If you redirect these tasks to the people specialized for them, and there are a lot of them on the market, starting with freelancers, there will be a lot more time for billable tasks. In a lot of areas, outsourcing services might prove worthwhile.

Hence, it is important to understand all the possibilities and advantages and use them in the best possible way.

5. Use the phone on special occasions

Many jobs require employees to not be in front of their computers at all times. Occasional field work won’t allow you to automatically log your tasks in the program. This can lead to wrong time logging or forgetting to make the logs.

To avoid untimely data, the best solution is to use a time tracking software solution that also has a mobile version.

Once you understand that texting and calls, meetings, and other non-computer-related activities represent spent time that needs to be accounted for in the work hours logs, you will have a realistic perception of your time and accurate reports.

Thus, it is important to log each task’s details on your mobile phone as well.

Conclusion

Non-billable hours are inevitable for any company to succeed. Those hours include important administration, business development, as well as employee training and development. In other words, you will never be able to completely eliminate non-billable work. However, it is important to reduce it as much as possible to make sure you’re making more profit and you’re being adequately paid for your work.

Using the tips we have mentioned above will enable you to bill your clients accurately and receive adequate compensation.

 

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50+ Funny Working From Home Memes

50+ Funny Working From Home Memes

June 22, 2022

There is no place like home … unless you work there. Then, it’s just a workplace. Still, remote working brings a lot of new things, like experience and a wealth of new comedy content.

Memes you can totally relate to!

Everyone sees working from home differently. While your friends think you are enjoying staying home, eating, and working from the comfort of your bed, the reality is probably very different.

A decade ago, most employers would have balked at the idea of employees regularly working from home. That is why most organizations that have adopted remote work rapidly ran into plenty of issues.

Some problems relate to the inability to keep meetings productive, as well as difficulties when it comes to keeping in contact with the employees. These problems became the target of memes with time. These memes show the reality of working at home in a funny and interesting way.

Two years into the pandemic, each time we sign in to our social media we are greeted by a new collection of memes. After all, memes related to working from home are something most people can relate to.

The most common memes are related to:

  • Zoom meetings
  • Working from Home – Expectations vs Reality
  • Distractions
  • Working from home with kids

We all know we can only stay productive if we rest our brains and take a break from time to time. So before you head straight back to work (from home), scroll to laugh and share these with your remote work colleagues.

 

Zoom meeting distraction

zoom meeting meme
 

 

Ready for zoom calling

zoom call meme
 

 

The list of reasons why I want to go back to the office

office meme
 

 

When you working from home and your boss messages about an online meeting

working from home meme
 

 

Every kid in quarantine

zoom call meme
 

 

Everytime when someone asks who will give a presentation

zoom call meme
 

 

Me reading the announcement from a company about allowing to work from home permanently


 

 

When you are distracted by your co-workers while having an online meeting


 

 

The best combination


 

 

Dressing well is overrated


 

 

How do I feel when my wife while working from home asks me to setup her computer


 

 

After 2 months of working from home


 

 

Such an ordinary day

 

 

Time tracking: 0
Me: 1


 

 

My face on zoom when my c-worker asks for the 100th if you can hear them


 

 

Remote work: what social distancing feels like


 

 

Me waiting for everyone to join the zoom call so I can say and mute


 

 

Me hearing my name on the zoom call and having absolutely


 

 

Me leaving the zoom meeting after being on mute, and contributing only with by


 

 

After 1 year of remote work


 

 

Me work from home


 

 

When you try to find the screen share, but the camera is still on


 

 

My life is a mess


 

 

When I’m not sure exactly what I’m listening to

 

 

I can’t do it anymore

 

 

Zoom meeting reality


 

 

Resourcefulness matters

 

 

 

 

Seize the day

 

 

When you literally work from home


 

 

When someone asks me how I feel working from home

 

 

Consequences of working from home


 

 

What is your worst distraction?


 

When you accidentally share the wrong screen


 

 

Every mom knows


 

 


 

 

When they asked me how I am still late when I work from home


 

 

Going back to the office after one month of remote work


 

 

When family members and roommates become your coworkers


 

 

How I look while eating:

 

 

Work from home = Casual Fridays


 

 

Zoom meeting reality 2


 

 

After one month of remote working


 

 

When co-workers start talking about their children at the Zoom meeting


 

 

It is important to remain professional


 

 

Just to remember

 

 

When Friday doesn’t feel as funny anymore, because you don’t leave the office


 

 

Start managing your time

FREE 14-day trial – no credit card required

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WTS
Finexepertiza
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