Why recording time against projects is the key to success

21 August 2025

If you run a consultancy chances are you have felt the same frustrations as many firms in your sector.

Endless admin. Spreadsheets that never quite match up. Tools that do not talk to each other. Uncertainty about whether a project is actually making money.

One of the simplest but most powerful practices to solve these issues is recording time properly against projects. It may sound obvious, but without accurate time data, it is almost impossible to understand recovery rates, distinguish billable from non-billable work, or get clear insight into project profitability.

This article explores why time recording matters, how it helps consultancies protect margins, and how to overcome staff resistance by using systems that make it simple and effective.

The importance of knowing your recovery rate

Consultancies live and die by recovery rates. In simple terms, your recovery rate is the percentage of your staff costs that you recover through billable work to clients. If you pay one of your consultants £200 per hour but only bill out 60 per cent of their time, your effective recovery rate is much lower than you think.

Without tracking time, recovery rates become guesswork. You might assume a project is profitable because the invoice looks healthy, but unless you can match it against actual staff hours, you have no way of knowing the true margin. Timesheets give you the evidence to measure recovery rate at a project, team, and business level.

This is particularly important for consultancies juggling multiple clients and project types. Some projects will naturally have higher margins, while others may soak up more non-billable time. Recording time helps you spot patterns, so you can prioritise the most profitable work and negotiate fees more confidently in the future.

Billable and non-billable time: seeing the full picture

A common mistake is to only track billable hours. While this may feel easier, it misses the bigger picture. Every business has essential non-billable work such as business development, training, admin, compliance tasks, and internal meetings.

If you do not record this non-billable time, you cannot see how much of the working week it consumes. Many consultancies are shocked when they first track it properly. It is not unusual for 20 to 30 per cent of staff time to disappear into activities that never appear on an invoice.

This is not necessarily a bad thing. Some non-billable tasks are vital for long-term success. The problem is when the balance tips too far. By recording all time, you can make informed decisions:

• Is admin work consuming too much capacity that should be automated or delegated?
• Are consultants spending too long chasing clients instead of delivering fee-earning work?
• Do recovery rates differ across project types once you factor in the hidden non-billable overhead?

These insights are only possible when you capture both sides of the equation.

Overcoming staff resistance to time recording

Most business consultants did not go into their field because they love filling in timesheets. It is common to hear staff say things like:

• “I don’t have time to fill this in.”
• “It feels like micromanagement.”
• “I will do it later when I remember.”

Left unchecked, this resistance leads to patchy, inaccurate data. People guess their hours at the end of the week, or worse, leave gaps entirely.

The first step to overcoming this is communication. Staff need to understand why time recording matters not just for the business, but for them personally. Clear, accurate data allows directors to set realistic targets, ensure fair workloads, and win projects that are properly resourced. It also strengthens the case for hiring extra support when people are stretched too thin.

The second step is making it easy. The more clicks, logins, or manual entry involved, the less likely staff are to engage. A system that lets consultants log time quickly on their phone, or directly within their project management tool, removes the friction. Ideally it should prompt them to record time as they go, rather than relying on memory days later.

Finally, it helps to build good habits. Encourage staff to enter time daily, even if it is just five minutes at the end of the working day. Managers should lead by example and use the data constructively, not punitively. If consultants see timesheets being used to improve resourcing and reduce late nights, they are far more likely to engage.

Why the right system makes all the difference

Many consultancies are still relying on spreadsheets, email reminders, or basic CRM tools to manage timesheets. While this may work for a handful of staff, it quickly becomes unmanageable as projects multiply. Data gets duplicated, formulas break, and nobody trusts the numbers.

The key is to use a system that is both effective and simple to use. For SMEs in consulting, that usually means a cloud-based tool that integrates time recording directly with project management, billing, and reporting. The benefits of a well-chosen system include:

• Ease of use: Consultants can log hours in seconds, whether they are on-site, in the office, or working remotely
• Accuracy: Time is captured in real time, reducing reliance on memory and improving data quality
• Integration: Hours flow directly into project budgets, invoices, and profitability reports. No more double entry or copy-pasting between systems
• Insight: Directors can see recovery rates, billable versus non-billable ratios, and project margins in real time
• Scalability: As your consultancy grows, the system grows with you, avoiding another disruptive system change down the line

Crucially, a good system removes the admin burden from both staff and managers. Instead of chasing missing timesheets at the end of the month, directors can trust that the information is already there and accurate.

From data to decisions

Recording time is not an end in itself. The real value comes from what you do with the data. Once you have reliable information, you can:

• Compare actual project costs to estimates, improving future bids
• Identify which clients and project types deliver the best margins
• Monitor workload balance across teams and prevent burnout.
• Spot bottlenecks where too much time is lost to non-billable tasks.
• Strengthen negotiations with clients by showing clear evidence of time spent.
• This turns timesheets from an admin chore into a strategic tool for growth.

Building a culture of accountability and improvement

Ultimately, recording time is about building a culture of accountability. Not in a heavy-handed sense, but in a way that makes people more aware of how they spend their day.

When consultants log their time, they are more likely to stay focused and less likely to lose hours to distractions. For managers, it provides visibility to support and develop their teams. For directors, it gives confidence that the business is running profitably and sustainably.

The key is to link time recording to positive outcomes: better project management, fairer resourcing, improved recovery rates, and more time for consultants to focus on what they do best.

Conclusion

For SME consultancies, recording time against projects is not just a back-office task. It is the foundation for understanding profitability, managing resources, and making informed decisions about growth.

By tracking both billable and non-billable hours, you gain a true picture of recovery rates and where time is really going. By addressing staff resistance through communication and easy-to-use systems, you build a culture where timesheets are seen as helpful, not a hindrance. And by choosing the right system, you ensure that time recording is not another admin headache, but a seamless part of how your consultancy operates.

In short, timesheets done properly are not about monitoring people. They are about giving your business the clarity to thrive.

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