Why is time recording so important?

Time recording as the basis of company management should be an absolute standard in the agency landscape. Yet in real life, it is more common than one might think to find agencies which either don’t record any times at all, or only record rudimentary times for certain customers who explicitly request it.

That was a good enough reason for me to examine this issue in more detail in my blog.

Agencies, advertising departments and other service-providing companies actually “only” sell their time. This means time is the critical mass, constituting the most valuable, precious asset.

For this reason alone, customer/job-based time recording is an absolute must at service-providing companies. But there are also important reasons for administrative time recording – i.e. agency-based hours – which I will address later on.

Today, there is (unfortunately) still a widespread opinion among agency workers that the aim of time recording is to check whether the respective staff members are working enough – i.e. another form of checking attendance, similar to time clocking. But this is certainly not the case here: Time recording enables issues such as job and customer controlling, capacity planning and reliable delivery deadlines to be established within the company. It even allows the added value of a product or service to be measured.

These findings create clear competitive advantages in the increasingly tough agency business.

But let’s look at the individual arguments below in a bit more detail:

Time recording serves as the basis for planning work processes at agencies. Job expense information can be found at any time using the statistical data generated by the time recording. This data can also be used to work out reliable delivery deadlines and efficiently plan resources. Ensuring reliable deadlines when resources are right is an ongoing issue.

If jobs are charged on expense, or the customer requests verifications for accounts or flat-rate jobs, it is impossible to avoid performance-based time recording.

Price lists can be easily verified by calculating average hourly rates earned.

Time recording forms the basis for efficient customer, job and division controlling. It allows staffing expenses to be shown as direct costs in cost unit accounting. Overhead costs can be suitably split over the cost units – based on their resource consumption – using an own work code.

“Unproductive” times can be assessed through administrative time recording. This means times for internal meetings are no longer a mystery, and the overheads (external and staffing costs) can even be reviewed for internal projects, such as a summer party.

Complete recording of customer and agency-based hours facilitates full cost accounting up to the DB II contribution margin.

Staff and agency capacity utilisation, and therefore productivity information, can be calculated based on the ratio of agency and customer-based times.

Given the increasingly tough competition on the agency market, an agency which does not have a time-recording facility cannot, in my opinion, survive over the long-term.

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