‘Time slippage’ refers to the amount of revenue lost as a result of work carried out that goes unbilled. In an ideal world, an agency could bill all hours worked by staff and dramatically increase profit levels, but unfortunately, clients would have none of that! However, tackling the issue of the slippage at your agency can be the next best thing.
Clients of ours often think they have a clear idea of which of their clients are profitable, only to later find out they were wrong, meaning that they’ve been over-servicing certain clients by working beyond agreed budgets and scope and not giving enough attention to the more profitable accounts, which is ultimately how you become more profitable. The question posed is how many of these holes does your agency fall into? The answer for most agencies should be none but the experience at Tempora suggests otherwise.
Agencies need to be able to identify the areas where time slippage is occurring to be able to stop it. There are four ways to do this:
Budget Progress Visualisation
Allow your team to see easily how their work is impacting on an individual or project budget – this focuses attention on working efficiently throughout the life of a project to avoid overrun.
Record which team members are absent and for how long – this sounds obvious, but it’s easy to commit to a client deadline with only a rough idea of staff availability. This can cause project overrun or result in over qualified team members having to complete more straightforward tasks, which is an efficiency drag.
Real Billable Analysis
Compare forecasted billable time against what was actually billed the client – this will help you understand your true hourly rates and help you quote more accurately in future pitches.
Holistic Time Tracking
Often the excitement of a potentially big win can lead an agency to over-resource a pitch at the expense of nurturing existing clients and expanding retainers by up-selling services. Your time tracking tool should allow you to easy capture and analyse time spent on billable and non-billable work to ensure you are not neglecting existing accounts.
Charlotte Hanham is director of agency software provider, Tempora.