Running a successful project comes down to how good you are with project time management. Knowing how long a project will take, tracking the progress on the project to ensure the work gets completed in the allotted time, and then billing for that work are all components of project time management. Successful firms know this and have systems in place that facilitate the process.

Prior to starting a project, project time management means you have some idea of how long the project will take. In cases where you are not sure, you can somewhat protect yourself by entering into a time and expense type contract where you bill the customer based on the time you work on the project. While this can be an effective way to ensure you get paid for your work, be aware that there is a limit to how much a customer will allow you to charge them. Sometimes that limit is stated in the contract. Other times you only find out after you are deep into the project, way past your original estimate, with much more work to do to complete the project. Knowing how long the project will take is even more important on fixed price contracts where you know from the start how much money you will receive. Since the customer knows from the start what their cost will be, this can be an attractive arrangement for the customer. If you know what you are doing, fixed price contracts can also be very profitable for you, creating a win-win for you and your customer. However, if you underestimate the project or don’t practice good project time management, this can be very disastrous.

How do you ensure you know how long a project will take? Find a good project time management system that will allow you and your employees to track their time against projects and use the system to create a process for tracking time. If the project is big enough, typically 40 hours or more, you may want to ensure the system can track time within the project by task as well. Tracking time by project allows you to do two things – follow the project as it progresses and gives you history to use in future estimates. To do this, the project time management system should have the ability to easily set up your projects, enter budgets, and start tracking time against them. It must also be an easy way for employees to charge their time to the project, down to the task level, if that is what you want. If there are several employees working on the project or it is large, you may want to consider having the project manager or someone else approve time prior to it being posted to the project. This keeps management in the loop as well as stops error early in the process, where the effort to correct them is nominal. Once you start tracking time, use the reporting capabilities of the project time management system to track the progress on the job. On larger projects, budgets are a key piece to this. Entering budgets and tracking actual time against the project allow you to see how the project has progressed at any time. This is a big part of being successful. Catching overages as they are happening is very powerful. This allows you to correct the issues before they become too big. Additionally, this comparison helps you identify when the project’s scope has increased so you can ask the customer for a change order proactively, when you have more leverage, instead of waiting until the project is done. Once your project is complete, budget to actual comparisons allow you to review how the project went and what needs to be changed on the next estimate.

The next component of project time management is billing for your work. Ideally your system allows time to flow seamlessly into invoicing, avoiding double data entry and potential mistakes. The software should allow billings to be created and edited in an easy way, such as changing the hours to bill or the rate to use, right on the screen. It should also have the ability to track time that was charged to a job but not invoiced. On the invoice, you also want the option to include the level of detail the customer requires.

Once the billing has been completed, the information from the project time management system should flow automatically into the financial modules. This will allow you to track the balances due from customers, tying the amount back to projects. With this knowledge you can stay on top of your accounts receivables. This integration also makes your financial processes more efficient.

Finally, the project time management system should have good reporting capabilities. As I noted earlier, you will want to see actual time versus budgeted time. Additionally you will want to look at other metrics such as amount of time written off on each client or project, utilization by employee, realization rates by employee, customer, or project, and profitability by customer.

Remember, good project time management is all about having the right knowledge about a project and using it. Having good processes and a system to facilitate your process go a long way in helping you understand your business and being successful in the project world.

Author Bio: Joe Young is President of Beyond Software, publisher of project management software for small firms. Beyond Software brings project functionality, such as project time management, to companies that allows you to run your business more efficiently. For more information go to beyondsoftware.com.

Category: Business Management
Keywords: project time management