Tracking time keeps me on track

I’m always amazed when I talk to freelancers who tell me that they just estimate how much time they spent on a project, or have a time sheet that they fill in at the end of the day or end of the week. Or worse yet, who say, “I bill by the project, so I don’t have to track my time.” Yeesh! As a freelancer, all I have to sell is my time, so I make sure I know how I’m spending it. I use my time tracking in several ways.

1. To bill projects by the hour. Obvious, yes? If I’m charging someone by the hour, I want to be darn sure that I am not cheating them by overcharging, or me by undercharging.

2. To keep track of my time versus pay for projects that are billed by a set fee. If I’ve given a client a set price that includes up to two revisions, and they ask for revision number three, I can use my time tracking to decide if I want to include the extra revision for free or if I’ll bill for it. (Either way, it will show up on the invoice, with “no charge” next to it if I’ve been able to generously offer that extra value at no additional charge.)

3. To refer to when creating price quotes for future jobs. How long does a banner ad take to create? I can look back at previous banner ad projects in my time tracking archive and get a good idea.

4. To track my non-billable time. How much time do I spend invoicing and bookkeeping and social networking and learning and doing other business-related-but-non-billable tasks? How many hours in a day are available for billable work instead of non-billable work? I started keeping track last year, and found that I spend about 25% of my time on non-billable work. My non-billable time tracking wasn’t great, though, so I’m pledging to do better this year. I’ve also made categories so I can track time spent marketing my design business versus time spent on other activities.

How do you use your time tracking data?