Groans echo throughout the agency; this is the frustrated sound and common response to "Have you filled in your timesheet yet?" Timesheets have long been a staple in the agency world, serving as a means to track time spent on projects and determine how much to charge clients. However, some might say it's actually easier to get blood out of a stone than getting your team to consistently fill in their timesheets.
Many argue that timesheets feel a little like Big Brother, tracking every moment of every working day, including every cup of tea, every trip to the toilet, and the extra-long chats with colleagues, all of which gets placed under "Admin." How can you put a time limit on creativity? Surely, it's about the quality of work you deliver to your client rather than the time that was spent on it. These are some of the reasons why agencies are turning their backs on timesheets and opting for a new approach when it comes to pricing their services and measuring productivity.
What is the relevance and effectiveness of timesheets? Can value pricing truly eliminate the need for timesheets? We pose the question: Are timesheets dead?
A World Without Timesheets
I can already hear the sound of project managers and accountants, breathing into a paper bag at the very prospect of not having timesheets. "How can we measure productivity?" "How will we know how much to charge for projects?" "How can we provide clients with realistic timelines?"
To be fair, these are really good points. Timesheets are not there as a dominant force, keeping a close eye on you; they are there to help agencies have a better understanding of their performance. It's not about individual valuation but the overall valuation of an agency. Having timesheets provides insights into how long projects take to deliver and how much to charge so that your agency can become profitable. It also lets you know which clients take up the most time with their endless questions. This information provides a detailed record of how time is allocated across different projects and helps agencies have a better understanding of resource utilization and client billing. Timesheets enable accurate invoicing and provide a foundation for data-driven decision-making and performance analysis.
Have Timesheets Had Their Time?
Since the dawn of timesheets, people have complained about filling them in. Critics argue that timesheets can be burdensome, time-consuming, and may inadvertently encourage a focus on billable hours rather than delivering exceptional client work. David Trott, the creative director, copywriter, author, and all-round advertising guru, has said in a tweet:
"So, I work on the client's problem for 3 days and can't come up with anything great. But they're paying by the day. So, I stop work and charge them for 3 days and we run average ads. Is that how timesheets work? Is that why the client came to me?"
David makes the point of prioritizing creativity over time and the value of work being more important than the time spent on it. Perhaps, agencies should shift their mindset to value creation and outcomes-based pricing. By eliminating timesheets, agencies can foster a more collaborative and flexible environment, allowing teams to focus on delivering exceptional work rather than tracking every minute.
Putting A Time Limit on Creativity
Creativity is not bound by time; ideas come thick and fast when you least expect them, and it flourishes when given the space to explore, experiment, and iterate. Agencies that rely on timesheets will allocate designated time for brainstorming sessions, and the best idea to emerge will be put forward to the client. However, is this the best idea? With more time, could this idea be developed further into something truly unique? But who pays for this additional time, the client or the agency?
Putting a price or time limit on creativity risks stifling innovation and compromising the quality of work produced. It is crucial to find a balance between acknowledging the value of creativity and ensuring fair compensation for the agency's efforts.
Value Pricing and the Changing Landscape
Value pricing, an alternative approach to billing, has gained traction in recent years. Instead of basing fees solely on hours worked, value pricing focuses on the perceived value delivered to the client. It takes into account factors like expertise, results achieved, and the impact on the client's business. Value pricing recognizes that the value of creative work cannot be measured solely by the time invested. However, this model relies on your agency's reputation, the quality of work, and the creative ideas being produced. Additionally, you need to know how much to charge in order to cover the costs of running an agency and, more importantly, make a profit.
Finding The Balance
While timesheets may not be the sole indicator of value, they can still provide valuable insights when used alongside other metrics. Agencies can explore hybrid models that combine elements of value pricing with selective time tracking for specific purposes, such as resource planning, project costing, or internal performance analysis. This approach allows for the benefits of value-based pricing while retaining the advantages of time tracking for certain aspects of agency operations. Ironically, this takes time to achieve if there isn't any previous data to work from.
There's Still Life in Timesheets
Love them or hate them, timesheets aren't going anywhere anytime soon. The debate surrounding the relevance of timesheets in the agency world is far from settled. While value pricing offers a compelling alternative, it is essential to consider the unique dynamics of each agency and client engagement. The challenge lies in striking a balance between the need for fair compensation, the recognition of the value of creativity, and the practical requirements of agency operations. Ultimately, agencies must adopt a pricing and time-tracking approach that aligns with their values, business model, and the needs of their clients to ensure sustainable success in an ever-evolving industry. So, with that in mind, don't forget to fill in your timesheet.
We Are Paprika
Paprika is more than a project management tool; it's more than accountancy software; it's more than a timesheet system, and it offers more than job costing. Paprika is an all-in-one, all-purpose agency management system that has been built to keep up with the demands of creative businesses. It's not just another off-the-shelf solution. It allows you to ditch the multiple tools and bring together all the functionalities your team needs into one centralized hub, ensuring everyone in the agency is on the same page and heading in the right direction.