Running a home service business means you often have team members in the field. Whether your technicians are in transit, on a job, or doing other tasks, keeping track of their time and hours can be hard.
To make things more complicated, not all work hours are billable to your customers. So, it’s essential for your business’s financial health that you accurately track and invoice billable hours.
In this article, we’ll explore some of the best practices for managing billable hours in field services. We’ll discuss how efficiently tracking hours can benefit your business and how you can maximize job efficiency.
The Importance of Efficient Management of Billable Hours
Billable hours are the hours spent performing a service or job for a specific customer. If your home service company operates on hourly rates, keeping track of billable hours is a must. With any business, there are many tasks in a day that aren’t billable. Tracking hours can help you maximize your time and ensure you’re compensated correctly.
Home and field service providers often face a mix of tasks. From scheduling to site visits, client communication, and the actual project, a lot goes into each job.
Here’s how managing billable hours can help improve your home service business:
Profitability and Client Satisfaction
Tracking your billable hours will allow you to have organized and efficient billing. This can increase your revenue by revealing your profits and losses on each project. Maximizing resources and time saves both you and your client’s money.
An accurate report of time spent on each project can help improve client satisfaction. This shows how and where their money was spent and that you’re doing everything possible to optimize every hour and task. It also promotes transparency and trust with your customers.
Accurate Time Tracking and Operational Success
With efficient billable hour tracking, you can be more accurate in evaluating each project. This can show you how much time was spent where and on what. This will show you the efficiency of each team member and project.
Knowing what tasks take longer can help you improve your operations altogether. You can plan accordingly, quote more accurately, and evaluate which projects are cost-effective for your business.
Employee Value and Productivity
Your employees work hard. They should be recognized and valued for their time and investment in each project. Accurate hour tracking can help prevent employees from feeling overworked and underpaid.
This can also help with task management and productivity. It can show your team the value of what they put into each client and job.
Common Hurdles with Managing Hours
It can be confusing to differentiate between billable and non-billable tasks. Your company should have clearly defined parameters for what is billable and what is not. Additionally, keeping track of each employee while they are on the job isn’t always possible. This can make accurate hour tracking somewhat complicated.
Having a clear, defined system and training in place can help reduce the risk of disputes or misuse of time. This way, each task is accurately reported and tracked.
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Managing Billable Hours in Field Service: 6 Best Practices
Setting up a system for managing billable hours can be difficult. You have to define your tasks, train your employees, and evaluate the scope of your services. So, how do you stop things from slipping between the cracks?
Let’s look at some of the best practices for managing billable hours in the field:
Realistic Billable Hour Targets
Setting a realistic target can help ensure that billable hours aren’t way over or under what they should be. This gives your team an idea of what each project should entail and can help you evaluate productivity and efficiency on each project.
Having realistic targets also gives your business a framework for quoting clients.
Implementing Time-Tracking Tools
Unfortunately, most individuals can’t be relied on to track time accurately. We’re all susceptible to human error, especially after a long day. Time-tracking tools like field management software can help you track hours in real-time.
Most field service management software offers mobile access. This allows technicians to access time sheets and project profiles on the go. This way, every technician can report while in the field.
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Differentiating Billable and Non-Billable Work
What is billable, and what isn’t? Your business should clearly define what tasks are internal responsibilities and what you can charge your clients for.
Once these are defined, your team can track how their time is spent. This allows your home service business to prioritize and even automate some less profitable tasks.
Ensuring Accurate Data Entry
The information should be accurate regardless of what system you use to track hours. These details help you manage and keep track of travel expenses, inventory, employee labor, and profit margin. Ensure your team knows how to correctly use and input data into your system.
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Tracking Non-Billable Hours
Most internal tasks, such as company meetings, reports, and administrative work, should still be logged. While these tasks are vital to the workflow, they aren’t directly bringing in revenue. Tracking these tasks can help you reduce time spent on them, thus giving your team more time to spend on billable efforts.
Complete Billing Descriptions
Having complete and detailed billing descriptions benefits your business in many ways. Internally, you’ll be able to see how time was spent and ensure there aren’t any non-billable tasks on the list. This can help you keep track of project optimization and employee management.
Also, detailed billing descriptions will reduce the risk of client disputes. With a complete and thorough report, there is no room to argue about the hours spent on the job.
Strategies for Optimizing Billable Hours
Once you have a system for tracking billable hours, you can focus on maximizing each hour spent on the job. Let’s look at some of the ways to boost productivity and optimize your time:
Specialized Field Service Management Software
Some field service software is designed specifically for home service providers. These interfaces help you track employees on the job, allow for real-time hour input, and can even create itemized invoices.
Categorizing Tasks to Increase Efficiency
Tasks can be organized and categorized based on their revenue and resource needs. This can help you prioritize tasks for each job. Task categorization can increase efficiency and boost profitability.
Utilizing Training Initiatives for Productivity
Keeping your team trained in best practices and company protocols will improve productivity. Your team is what drives revenue to your business. They’re the ones in the field handling customers and providing top-tier services.
Get your team familiar with the concept of billable and non-billable tasks and keep them trained on whatever your system will be. This can increase their efficiency and productivity on the job.
Strategic Scheduling and Resource Allocation
You can strategically schedule your team to maximize their time using your field management software. Optimizing routes can ensure your workers will reduce travel time and have more time to work on billable tasks.
Your team members and resources should be allocated where they are most needed and efficient.
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Automate Non-Billable Administrative Tasks
Non-billable tasks such as invoicing, scheduling, and payroll can all be automated. This relieves business owners of some responsibility and frees employees and management to focus on revenue-driven tasks.
Top Takeaway Tips for Managing Billable Hours
Are you ready to start tracking and managing your billable hours? Whether you adjust your system or start a new one, it doesn’t take much to get organized.
Here are some steps you can take to improve your billable hours management system:
Get Organized
Begin to create a system. How have you been tracking hours? What has been working and what hasn’t? Getting organized and assessing how your team has been operating will help you know where to start.
Define Your Tasks
Walking through your services from start to finish can help you categorize your tasks. You can also organize it based on the priorities for each project. This will help you create a template for any software and define training for your employees.
Research Field Service Management Software
There are many different field service management software options on the market. Do some research, read some reviews, and find a system that will work best for your company. Most field service software specializes in repairs, maintenance, installation, and consultation.