How can financial service firms benefit from time tracking software?
Time tracking has become a crucial workflow element in many fields. The financial service industry is no exception, as this practice enables tracking company progress and making informed decisions about the next business steps.
Our platform assesses the progress of your company by collecting data on key performance indicators. KPIs are a way to quantify both the current state and historic trends within any business. Analyzing them can help managers, directors, and other higher-ups resolve problems, bring positive changes, and get an insight into the profit and loss account.
The changes you can implement include task redistribution, adding productivity tools to the daily routine, identifying top and low performers among your staff and clients, and many other solutions as well.
Time tracking software solutions also improve the transparency of your business. This means that you will know both the progress of your projects on every level and avoid unfair work distribution.
Business aspects you should track
Tracking time per employee
From the higher-ups and management down to tellers and other staff, tracking employee time can bring you many useful insights and point you to the ways you can improve your establishment’s profitability.
- Here are some of the opportunities time tracking per employee brings:
- Knowing whether your employees are using the entirety of their work hours
- Understanding how effective your teams are
- Identifying unproductive practices and distractors
- Finding out who your top performers are and who needs some help or guidance
- Tracking overtime, vacations, and sick time
- Monitoring time utilization
Tracking time per task
Task time tracking allows you to have an accurate insight into the current state of your company and the options for future improvements. Understanding how much time a certain type of task takes will help you with future time assessments as well.
Task time tracking also helps you identify oversights in organization and errors in task delegation. Finally, it can help you determine whether to outsource certain activities to be able to utilize time more efficiently.
Tracking time per client
No one can deny the importance of knowing all about your own company’s inner workings. However, this knowledge alone isn’t enough to run a successful business. Your profit and success don’t only depend on your work since the business itself is a collaboration between you and your clients. Hence, understanding your clients and their demands, but also tracking the time you invest in those collaborations. The benefits of tracking time per client include:
- Tracking profit per client, as you cannot make profit assessments or allocate costs to individual clients without the time data
- Identifying top and low performing clients
- The opportunity to redefine contractual terms, suggest changes to the current cooperation model, and change your fees according to the previous insights
- Recognizing the need to terminate contracts
- Understanding the changes you need to make in the future offers
Tracking time per project
This type of time tracking gives you an accurate insight into both efficiency and profitability on a service line level. When it comes to financial services, it is important to differentiate between the profit margin coming from receiving deposits and loans and the profit from other services like currency exchange, safe deposit boxes, wealth management, and others. Equally important, you will be able to account for the time going into all these activities.
The basics of the time tracking process
The advantages of simple time tracking
Companies that strive to measure their productivity should focus on making the time tracking process as simple as possible while still receiving a sufficient amount of data to make improvements. Many time tracking solutions offer different options.
Tracking methods can range from using a simple automatic tracker that allows employees to clock in and clock out. Timesheets are another option, and digitalization has brought many advantages to them. Finally, there are some extremely sophisticated and complex financial tracking systems that allow you to track numerous categories and customize your tracking experience.
A simple timer is a great option for some businesses, but it doesn’t account for the activities that take up the tracked time. if there are multiple trackers, your employees will have to switch between them whenever they take up another task. Similarly, super-sophisticated systems can take up a lot of time to set up initially and use daily. In other words, finding a happy middle is what you should be aiming for.
What you shouldn’t track
Different software solutions also offer different ways to track time. As we previously mentioned, some simply log time with little to no additional information. Others, on the other hand, track mouse and keyboard activity, apps, and websites the employees use during their workdays or even take screenshots.
While the first option doesn’t offer enough data, the second implies distrust and an extreme level of micromanagement. It also raises the question of privacy and safety. On the other hand, going through the screenshots regularly, especially in a large organization, is a cumbersome task. Finally, taking screenshots of employee computers can be against the GDPR.
Classifying the tasks
As we have previously mentioned, it is important to be able to find a specific piece of information quickly and effortlessly when revising time logs. The same is applicable when it comes to users navigating the program while using it.
Creating a separate entry for each task is a hassle to get used to in the beginning. Yet, your employees will need to do it daily. You should make the platform easier to use and navigate by creating types of tasks as well as recurring tasks. This way, your staff will be able to log their time in only a couple of clicks.
Billable rates – what to track
Billable rates are an important part of any business dealing with clients. There are two main rates to look for – the planned (expected) rate and the realistic (achieved) rate for each client and employee. The ratio of these two values shows you whether you are making a profit and if that profit matches your short and long-term plans.
The expected billable rate is determined before you start collaborating with a client, and the realistic rate can only be calculated after the project is completed or invoiced (or a budgeting period is over). Calculating the realistic billable rate is done by dividing the total profit by real billable hours invested per employee.
When your employees track their time while they perform services for your clients, the software should automatically account for their default billable rates. Another option is to use a billable hours chart, which is a useful tool that saves time. finally, you can permit the employees to adjust their rates on their own.
Realistic billable rate calculation and setting the default rates are some of the most important options time tracking software offers.
Cost rates
This is another important aspect of time tracking software. Time Analytics automatically accounts for cost rates – the employee hourly rate, which is based on direct expenses by the employee and their salaries, and the hourly rate based on general expenses. In other words, it can calculate cost rates per project and client on its own.
Timesheet reviews
Time tracking tools for financial services should allow you to see a comprehensible timesheet report. Reviewing these reports is important for the confirmation of logged hours and tasks, tracking overtime, breaks, vacations, and sick leaves, etc. Timesheets are a mandatory document in some countries, and employers can’t pay their employees without issuing them.
You can use a timesheet template that suits your needs, but each full-time equivalent timesheet should contain the following categories
- Activities performed per client
- Details of said activities
- Total hours invested in work
- The structure of billable and non-billable hours
- The hourly billing rate
Insights time tracking brings
Time Analytics offers a comprehensive report list regarding real-time data and historic trends. The importance of these reports lies in the potential changes you will be able to implement to improve your overall business. In other words, if you aren’t utilizing the data you will not be using all the potential time tracking offers.
It is important to receive high-quality reports that lead to positive business decisions, and our platform pays special attention to giving you detailed and accurate statements.
Time tracking and billing
Time tracking gives you the ability to create transparent and detailed invoices for your clients, as it accounts for all the data from their timesheets. This way, you can include an overview of all tasks your staff has completed for a specific client.
Tracking costs
Tracking costs per work hour is crucial for any business, as it makes the calculation of efficiency and profitability indicators per client or project possible.
Tracking costs per client and project
A platform that tracks time and expenses can account for the work hour price, automatically including all direct and indirect expenses and allocating them to projects and clients.
The financial tracking system should automatically set up employee cost rates. The total cost rate is equal to the sum of the pay rate and the overhead cost rate. The pay rate is calculated by dividing the gross salary by the average number of working hours on the monthly level. Then, since you want a more accurate expense estimate, you should calculate the overhead expenses. You can do that by dividing the total overhead expenses (office space lease, utilities, phone and internet bills, office supplies, etc.) by the number of employees, and then dividing that number by the average monthly work hour number.
Once you add these two values, you’ll have your total cost rate. You can enter this number into the program, which will then allocate the expenses by client and project. Accurate expense allocation is guaranteed since it is based on time reports.
This is a good way to understand how much each client, project, and activity costs you.
The essential KPIs financial service firms should track
Average company billable rate
This important KPI represents the average amount your company makes by supplying your clients with services. Comparing the average billable rate to the expected billable rate gives you information on company profitability.
Employee billable rate
Tracking this metric is important for finding out who are the top performers in your team. The reason? It shows how much your clients pay by the hour for a specific employee. Additionally, employee billable rate by month and comparing it to the total cost rate and expected billable rate give you the necessary data for accurate employee assessment.
Project and client costs
This indicator shows the company’s expenses allocated to a project or a client. Determining expenses without time data is impossible, so time tracking is a crucial part of calculating and allocating costs.
Having an understanding of your expenses by project and client will make budgeting in the next budgeting cycle simpler and more accurate.
Time utilization
Time utilization represents the time billable and non-billable hours take up in the total hours worked. It gives you an insight into the time your employees invest in making the company profit, and how much is taken up doing administrative and other tasks you can’t charge for. If non-billable hours take up too much time, you should consider either outsourcing certain tasks or changing the structure of the workflow.
Project billable rate
This metric shows whether you are making a profit from your projects or not, which makes it extremely important. It is also useful for defining fees you should implement in the future.
The billable rate per project (or service line) is calculated by dividing the total project profit by the total hours invested in that project.
Billable rate per client
In the same vein, this metric is calculated by dividing the total profit by the time spent on a client. Understanding it means understanding whether you are making a profit from specific clients.
Billing rate utilization
This indicator shows the difference between the realistically achieved billable rate and the expected rate. In other words, the planned versus the projected profit.
The structure of work tasks
Knowing how much time each task type takes and their places within the workflow can help you find ways to reorganize the company procedures and increase efficiency within the organization.
Overtime information
Overtime is becoming more and more prominent in all industries. The reasoning for overtime comes from two sources – job demands and unproductive behaviors. In the first case, you should consider hiring additional team members, outsourcing activities, or adding another employee to especially demanding projects. In the second case, though, you will need to identify distractors and other problems and find satisfactory solutions.
To conclude
Time tracking is an important business practice, and understanding and utilizing all of its benefits is crucial for a financial service company.
However, you may be met with a lot of resistance when you first implement it into your workflow. That is why you should set up some rules for yourself as well. Firstly, choose a tracking solution that is easy to use. That means it should be intuitive and well designed, and take as little time as possible to fill. It also means you shouldn’t use it as a means to micromanage and justify punishments.
Instead, you should adopt positive time tracking practices and use the software’s potential to understand your KPIs and make the necessary changes that will benefit both your employees and the company in the long term.
Time Analytics offers powerful tracking and reporting features that can boost the profitability of any bank, insurance, or brokerage company, and other financial service providers. Identify the underlying problems and find the best solutions for them. increase business transparency and make sure the workload is equally distributed.
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