How to avoid timesheets

You used to work for a big, bureaucratic business. Now you're your own boss. You want to spare your people the needless admin. You won't make them fill in pointless timesheets. To make this utopia a reality, here's what you need to overcome (and how you might do it):

1. Record keeping in case of client disputes: agencies should have accurate records of what was done and when, along with written confirmation that a client accepts the work that was done as the right use of budget. Timesheets allow us to prove that time was spent; if we only track tasks, (bad) clients can dispute whether we have actually spent the allocated budget because what we did "shouldn't have taken that long". Timesheets can help us to solve this problem...we can avoid this problem with good agendas and contact reports before and after meetings ("we said we would discuss this work; we did discuss this work; this work was approved and the next steps are X, Y and Z...next month we are going to do A, B and C"), which are shared with clients. A roadmap (again, accessible to all) also helps.
2. Quantifying consultancy: part of the job of the Strategist - or anyone performing a Strategy function, like a [Insert Specialist Discipline] Account Manager - is to answer ad hoc questions. Your people might know the answer and just need to type it out or tell a client on a call...or they might need to research it first...but this takes time, which must be accounted for. Timesheets literally account for time, so the problem basically solves itself, but you can avoid timesheets with good comms. Go into the monthly client meeting prepared with a recap of the questions your people have answered and ask "we know this is on your mind because you asked [Person] about it - can be talk about it in a bit more detail now?" or "did you need anything else on [thing]?" or "person told me you wanted some advice on [thing] - we actually did this recently for [client], would it be helpful if we talk you through this case study of how it went?" - and then, again, keep good contact reports. Make sure the client knows how much they ask for your advice and therefore how much they must value it - that'll help you with renegotiations and upselling.
3. Estimating resource requirements accurately: when you start your agency, it's just you (and maybe a co-founder or two). You're doing the work and you know how long it'll take you. You're probably in a rush, because you also need to do *gestures* all this other crap, so you underestimate everything and don't record the actuals. Then you hire some staff. You give them the same time that you'd give yourself (which was not enough), forgetting that the first few hires you can afford to make are typically less experienced people than yourself and they're going to take longer. These new (junior) staff are way too scared to tell you that they can't do things in the allotted time so they just pretend they did and work into the evenings to cover it up. The cycle continues. If you have timesheets (and a culture that encourages people to record things accurately, even if that means "over-servicing" - more on this later), then you can adjust quotes over time. If you want to avoid proper time sheeting, you can just get a "working group" together for a period of time to assess what's required, on average, for the most common tasks (let's say you have 20 similar jobs booked in the next month; just ask the staff who are working on 10 of them to record those specific jobs).
4. Similarly, identifying wasted time: an individual or team might claim to be extremely busy, even though we know there should be capacity, based on the amount of revenue they're handling. This is often due to a demanding client, so we need a way to learn about what time is being spent on so we can help: staff will sometimes blame a client being demanding when in fact the client requires a normal level of service and the staff member is wasting time on things they aren't even realising that they're doing. You can mitigate the use of timesheets by adding something like "scope creep" to the weekly RAG status report that your client services team complete: rather than tracking all the time of each individual contributor, ask your client services and/or project management staff to mark a client red, amber or green, based on how much stuff they're asking for (that may or may not be within the scope of work)...then cross-referencing with the various staff who claim to be doing a lot, if that doesn't add up...and, obviously, having a conversation about it before trying to make changes! A second reason that a lot of time is being wasted is that there just is a lot of time: carrying more people than you actually need results in people just doing stuff to fill out the hours (more on agency headcount in last week's piece). This often looks like overservicing, so you need to change your culture to reallocate "stuff hours" to productive tasks: like setting your own agency up as a client and resourcing it in the same way, which means you get productive output, which helps you to grow, which finds work for the people who are wasting time*.
5. Recovery of slippage: you've quoted for a thing; timings are estimated; tasks are completed; then launch day arrives and...nothing. Website launches are particular offenders here. More testing is required. Redirects have to be redone. You need written sign off from the client when each step is completed if you're not able to explain that we're spending more time through the use of timesheets. If you break down the output into stages - and get agreement from the client that you can move onto the next stage - you can at least attempt to charge for redoing a stage that was considered "done". You can also try working in sprints: it takes as many sprints as it takes.
6. Procurement: sometimes a client's organisation won't work with an agency that doesn't track time; these contracts might be weighted disproportionately towards price when this is the case. You can avoid timesheets by walking away and not doing this work...or you can build a business that's meaningfully different to a degree that the client won't work with anyone else...then boot your rates up to the roof; timesheet only for that client; and bill them in 6 minute increments like you're a lawyer. Only one Rise at Seven client was aware of our day rates during my tenure (our rates being used to estimate capacity internally, rather than anything to do with billing) - this was because procurement demanded it and we conceded this in order to get more favourable terms elsewhere.
7. Recovery of hours and recognition of revenue: if you want to sell your agency, an acquirer will want to know that you did all the work you charged a client for and nobody is going to ask for the time (meaning money) that they are "owed". This means you need a clear policy on rolling over tasks and time each month: when time (effort) is "banked" and when it's lost. This is also a consideration in your accounting more generally. Arguably you need that policy even if you don't have timesheets!
8. You sold based on time and materials: if you told a client you would spend X amount of time servicing them then you're obligated to track how much time you spend servicing them, so you can justify your costs (and potentially justify an increase in rates, when you need to). You can overcome this by pricing based on the value you create (or at least on the outputs you produce, as a good first step). I can help you to make that happen.

* It's worth noting that staff generally aren't trying to waste time. Paraphrasing Peter Drucker, since he said it better than I could: "good teachers have always known that students generally want to be challenged. Good leaders assume that people from all backgrounds can perform at high standards and generally want to. Good leaders don't demand high standards: demanding implies that people are basically lazy and withhold their best efforts, like it must be extracted like pulling teeth."

Timesheets are avoidable, depending on how we want to run the business. If you run around, pulling staff up on "overservicing" then you're not going to solve that problem without timesheets. Your staff blame you (or the new business and client services teams, who might be in need of commercial training) for mis selling; they'd rather just hide the truth of what they are doing than sit through another meeting with you complaining about them giving away the farm (you gave it away). They need a mechanism to give you honest feedback on how things are run around here and timesheets are the easiest way...but, get everything under control and there's no reason you can't drop them again.