Learn how to set up a time logging system and efficiently track your billable hours with our expert guide. Identify your billable activities, choose theright time-tracking method, and establish a routine to maximize productivity. Accurately tracking billable hours is vital for freelancers and small businesses. Whether you manage your own system or utilize online tools, this guide provides comprehensive insights into initiating time tracking for billable hours. From establishing a log to managing invoicing, discover everything you need to know and more to streamline your process effectively. If you are interested in this topic, see link to blogpost - https://managry.com/how-to-track-billable-hours/

1. How to track
billable hours:
a step-by-step guide

2. Accurately tracking billable hours is
essential for freelancers and small
businesses.
This guide covers everything
you need to know about getting
started with time tracking
for billable hours.

3. Set up a Time Logging System
Before you start tracking billable hours,
you should prepare well.
Following section will guide you
through the essential steps to take
before you start tracking your time.
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4. Define billable activities
To track your billable hours accurately,
you need to differentiate billable and
non-billable activities.
Typical billable activities include:
1. Client meetings
2. Project work
3. Project management
4. Business travel
5. Administrative tasks
1 Set up a Time Logging System

5. Identify billable hours’ capacity
It’s essential to set a goal for the
number of billable hours you aim to
achieve within a specific period.
This will help you stay on track and
measure your progress. Consider
factors like your workload and the
number of clients you have.
1 Set up a Time Logging System

6. Choose a time-tracking method
There are various time-tracking
methods to choose from, and the
method you choose will depend on
your personal preference.
The most popular methods are:
1. Time-tracking apps/software
2. Manual timesheets
3. Timers
4. Activity trackers
5. Project management software
1 Set up a Time Logging System

7. Set up the time-tracking system
Once you’ve chosen a time-tracking
method, set up the system you will use
to record your billable hours.
Elements that should be included are:
1. Purpose of time tracking
2. Time tracking system
3. Time tracking policies
4. Billable and non-billable activities
5. Time tracking for remote work
6. Training and support
7. Privacy and confidentiality
1 Set up a Time Logging System

8. Enter All Billable Hours
Once the time-tracking system is in
place and employees are trained on
how to use it, the next step is to start
logging billable hours.
This will help keep everything precise
and prevent inaccurate hours, and also
help you better evaluate time needed
to finish tasks.
2

9. Establish a routine
It's important to establish a routine
for logging time.
By establishing a routine, employees
can help to ensure that they don't
forget to log hours or miss any billable
activities.
2 Enter All Billable Hours

10. Start the timer
When beginning a billable activity,
employees should start the timer
in the time tracking system.
This can help to ensure that all billable
hours are accurately recorded and that
no time is missed.
2 Enter All Billable Hours

11. Note billable activities
As employees work on billable
activities, they should take notes on
what they are working on, any
milestones achieved, and any issues
or challenges encountered.
This can help to provide additional
context for billable hours and make it
easier to categorize time entries
accurately.
2 Enter All Billable Hours

12. Stop the timer when activities change
When moving from one billable activity
to another, employees should stop
the timer for the first activity and start
a new timer for the next activity.
This can help to ensure that time
is accurately allocated to each activity
and that there are no overlaps or gaps
in time logs.
2 Enter All Billable Hours

13. Review time entries regularly
It's important to review time entries
regularly to ensure that they are
accurate and consistent.
Regular review can help to identify
areas for improvement in terms of time
management and project efficiency.
2 Enter All Billable Hours

14. Track Non-Billable Hours for Efficiency
Keeping a record of how many
non-billable hours each client
consumes will provide helpful insights.
Common non-billable activities are:
1. Internal meetings
2. Administrative tasks
3. Business development
4. Recruiting
5. Training and development
6. Sick or vacation time
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15. Tracking Costs and Expenses
for Comprehensive Profits
It’s important to also track associated
costs and expenses.
If a project involves travel, materials,
meals, and other related expenses,
be sure to include those in your billing
process.
4

16. Identifying billable and non-billable
expenses
Before you start tracking expenses, it's
important to identify which expenses
are billable and which are not.
Billable expenses include travel
expenses for client meetings,
equipment rental for a specific project,
or materials purchased for a specific
project.
Non-billable expenses might include
general office supplies, employee
salaries, or rent.
4 Tracking Costs and Expenses
for Comprehensive Profits

17. How to track expenses
There are many methods for tracking
expenses, including manual methods
like using a spreadsheet or notebook
and digital methods like using
accounting software or expense
tracking apps.
4 Tracking Costs and Expenses
for Comprehensive Profits

18. Invoicing for Billable Hours
After all your event details are collected
and project information entered into
the software, it’s time to generate an
invoice.
Following section will introduce you to
the most important steps.
5

19. Review time entries against
the client’s contract
Before creating an invoice, it's
important to review the client's
contract to ensure that all billable hours
are accounted for.
This can help avoid any confusion
or disputes.
5 Invoicing for Billable Hours

20. Check billable hours and billing rate
Once the client's contract has been
reviewed, it's time to determine
the billable hours and billing rate.
This should be based on the agreed-
upon terms in the contract, including
any hourly rates, project fees, or other
billing arrangements.
5 Invoicing for Billable Hours

21. Create and send a professional invoice
Once the hours and billing rate have
been determined, it's time to create
and send the invoice.
The invoice should be clear, easy to
understand, and include any payment
instructions or terms.
5 Invoicing for Billable Hours

22. Follow up on unpaid invoices
This can include sending reminders
or notices to clients, as well as working
with them to resolve any issues or
disputes.
By following up on unpaid invoices,
businesses can ensure that they are
paid for their work and maintain
positive relationships with their clients.
5 Invoicing for Billable Hours

23. Tracking billable hours is an essential
part of managing a successful
business.
The key to successful time tracking is
to establish clear goals, understand
employee capacity, set up a time-
tracking system, and regularly review
and adjust the process as needed.
By following this guide, businesses
can ensure that their time-tracking
process is accurate, efficient, and
effective.

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