Accurately Recording Billable Hours: Best Practices for QB Time Tracking

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For professional services firms and agencies, tracking billable time is crucial for getting paid accurately and managing profitability. QuickBooks provides powerful time tracking tools – but ineffective use can lead to missed revenue.

In this guide, we’ll cover best practices to configure QuickBooks time tracking to capture all billable activities. Follow these recommendations to keep billing and revenue optimization on track.

Review Time Tracking Musts for Billable Work

To properly track billable time with QuickBooks, make sure these basics are covered:

  • Track in real-time – Enter time as you work to avoid forgetting activities. This alone improves billable capture immensely.
  • Categorize clients and projects – Log time against specific clients and their projects for detailed reporting.
  • Add task details – Include descriptions of deliverables completed to justify billed time.
  • Enforce compliance – Make time tracking mandatory. Enable reminders if entries are missed.

With the right foundations, optimizing processes further can really maximize revenue capture.

Leverage Automated Timers to Eliminate Activity Gaps

A key challenge with manual time tracking is remembering to start and stop timers frequently. This leads to missed billable hours.

The fix is enabling automatic timers that run in the background:

  • Browser extensions track time on websites automatically
  • Apps track time based on GPS location
  • Timers prompt employees when idle after starting

Automatic timers effortlessly close time tracking gaps as you move between tasks. Billable hours are more fully captured with far less effort.

Configure Approval Workflows for Time Entries

Before sending customer invoices, have a manager review and approve time logs for accuracy.

Configure QuickBooks approval workflows to:

  • Flag unusually long durations for review
  • Identify vague or missing task descriptions
  • Verify client and project details

Approvals act as a quality check to ensure time data is fully fleshed out before billing customers.

Set Up Project Billing Rate Rules

To properly calculate billable amounts, configure project billing rates within QuickBooks:

  • Enter employee role billing rates
  • Set up project-specific rates based on agreements
  • Attach rates to specific tasks and services

Billing rate rules will automatically calculate invoice totals as time is captured. This prevents errors calculating billable amounts manually.

Use Audit Logs to Verify Accurate Billing

QuickBooks records detailed activity logs whenever time and billing actions occur.

Regularly run audit log reports to verify:

  • Time was logged accurately against correct clients/projects/tasks
  • All recorded time shows properly on customer invoices
  • No duplicate invoice line items exist

Audit reports create accountability and identify discrepancies early before billing mistakes impact revenue.

Send Automated Timesheet Reminders

Employees forget to enter time despite the best intentions.

Set up automatic timesheet reminder notifications in QuickBooks Online to:

  • Notify when scheduled timesheet is open
  • Remind to submit pending timesheet
  • Warn when timesheet is past due

Friendly reminders ensure timesheets remain top of mind and are completed on time before details get fuzzy.

Review Metrics on Billable Percentages

Leverage data analytics to optimize billing.

QuickBooks can report key metrics like:

  • Billable percentage per employee
  • Billable percentage per project
  • Percent billable for top clients

Analyzing percentages will reveal areas needing improvement such as projects with low billable hours.

Enable Location-Based Mobile Time Tracking

Employees working remotely or on client sites can leverage mobile location tracking:

  • Apps detect when arriving and leaving client locations
  • Automatically log time to correct clients based on GPS
  • Attach photos of work orders or site work

Location-based time tracking takes the guesswork out of tracking mobile or off-site work. Time is perfectly logged at each client stop.

Categorize Clients to Review Billing Habits

Clients have different standards for time tracking and billing scrutiny.

Set up client categories to streamline review based on billing sensitivity:

  • Fixed fee clients for minimal reviews
  • Enterprise clients for detailed reviews
  • Government clients for strict compliance and approvals

Segment clients appropriately to focus billable validation where needed most.

Build Buffer Time Into Estimates for Projects

Project estimates should factor in a buffer percentage for non-billable administrative tasks related to project delivery.

Examples include:

  • Team meetings and planning
  • Administrative paperwork
  • Client communications and questions

By accounting for non-billable hours in estimates, target billable percentages are still achievable.

Train Employees on Time Tracking Etiquette

Educate team members on common time tracking etiquette such as:

  • Never over-inflate hours
  • Round down timesheets to the nearest 15-min increment
  • Exclude breaks from time logs
  • Write clear task descriptions

Consistency and ethics in time data is critical. Set proper standards upfront.

Conclusion & Next Steps

Accurately capturing and validating billable time is essential to getting paid fully for work performed. QuickBooks provides the tools – but optimized processes are critical.

Follow the tips in this guide to configure QuickBooks to maximize billable time capture through automation, approvals, analytics and more. Every billable hour counts.

To learn more best practices, explore QuickBooks training resources available online and discuss with an accounting advisor. Investing in expertise will help refine time tracking and prevent revenue leakage.

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