To track or not to track? This is the new debate among professional service organizations. According to Value Billing experts, it is irrelevant how much time you spend on something. The pricing is determined by what it is worth to your customer, so why bother to use time tracking software? In addition, many of our clients bill by fixed (flat) fee, so they do not track time, either. The perception is that time is only tracked to determine billing.
Regardless of how you determine your pricing for billing, you lose valuable information by not tracking your labor investment in your product, whether it is a tangible product or a service. You would not think of manufacturing something and setting a price without knowing what it cost you to produce that product.
By comparing your costs (including time) to your sales, you can determine your profitability and productivity. Time tracking will help you identify areas taking too long to complete. Perhaps a process change or re-training is in order. Certain tasks might now be performed by higher paid staff which could be re-assigned to other less expensive staff, making them both more productive and more profitable.