I learned about the importance of tracking time from when I worked for a small, woman-owned manufacturing company.
One of my responsibilities to was to determine the profit / loss on each job we completed. The process flow worked liked this:
- We received the signed PO from a company.
- A job card was then created, along with all the paperwork associated with job (e.g. blueprints, drawings, etc.).
- Once all the materials were received, the people on the shopfloor would get to work. We used time cards that had perforated slips; as people punched in and out of jobs, they would affix these slips of paper to the job card.
- Once the job was completed and shipped, I would then add up all the time and materials and divide these numbers by the dollar amount of the job to arrive at profit / loss.
- Then each week at our staff meeting, we’d go over the jobs to figure out ways to improve our process and troubleshoot why we lost money on a job.
I carried that process into my own business and have been tracking my time now for 19 years!
I’ve used various time tracking tools over the years. When I first started, I noted my time manually on a sheet of paper and then as technology improved, used software applications. For the last seven years I’ve used Harvest time tracking software.
I can’t say enough good things about this application (and I don’t want this to be a post about why you should use it specifically), but suffice to say, Harvest is flexible in that you can set up projects and associated tasks based on how you work.
It’s quite reasonably priced at $12 a month per user (e.g. employees or contractors) with no limit on projects. It also includes invoicing, allows you to track material costs, and syncs with a number of applications you might already use, such as Xero or Basecamp.
If you’re not using a time tracker, be sure to check it out. The link is non-affiliate.
Why tracking your time can improve your cash flow
In the last two years, as I’ve worked to improve my cash flow, I’ve relied on Harvest to help me understand where my time is going. The more I rely on it and the data it gives me, the more efficient and profitable I become.
Here are some of the ways tracking your time can help you with regard to cash flow.