Knowledge is Power

This is the second part of a two-part post. Click here to read the first part.

To be honest — time tracking isn't fun. After the initial joy of feeling organized has faded, it can quickly turn into drudgery. A tedious necessity, like paying the bills every month.

At least, that was how I felt about it. But soon enough, the inconvenience of having to track everything transitioned into being a habit I appreciated. Not so much the actual reporting, but the insights that resulted from it.

When you realize that your most high-maintenance client has just contributed 10% to your overall revenue over the last 12 months; and that the effective hourly rate for that client is 50% lower than for the rest of your clients; what do you do?

Sure, most of you probably have a pretty accurate gut feeling about who is profitable and who is not, but it's always easier to make hard decisions if they are backed by undisputable numbers.

I renegotiated most of my hourly contracts to include a billing increment clause, e.g., I charged time in 15 or 60-minute blocks.

After some initial pushback, this little adjustment transformed the behavior of one of my chattiest clients: he went from calling me 20 times a day to batching his questions for 2–3 calls a day.

My estimates got a lot better as well. And my fear of losing business because I was more expensive than the competition also proved false.

It turned out that many clients prefer to work with a supplier that acknowledges what it takes to produce high-quality software, is transparent about it, and budgets for unforeseen events.

On the bottom line, the few minutes I invest daily in time tracking have brought me increased cost awareness, significantly higher monthly revenue, and more accurate estimates.

All of which contributes to the essential gain — a less stressful life.

By Fredrik Holm, 2018-09-14.

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