Most audit and accounting firms in the region charge each client a fixed annual fee. The price is set in the first year based on the size of the company and the partner's estimate, then renewed as is or with a small increase. A few years later the client may have opened new branches, their transactions have grown, the team spends twice the time on them, and the fee hasn't moved. Nobody notices, because the time was never recorded.
Why should an audit firm track hours per client?
Because time is the firm's main cost, and without recording it you can't know what any client costs you. Salaries and rent are known figures, but how they split across clients remains a guess.
Once every team member logs their hours against the client and the task, you can answer questions that were out of reach before. Which clients take more time than they pay for? Which kind of task always runs late? Who on the team is carrying more than they can handle?
How does time tracking change pricing and profitability?
You get a real number to compare against the fee. A client's cost is roughly the team's hours on them multiplied by each person's hourly cost, and the gap between that and the fee is what the firm earns from them.
That number helps in at least three situations. When you quote a new client who looks like an existing one, you know how many hours it takes instead of estimating. When you renew with a long-standing client, you have a clear reason to ask for a fee adjustment. And at the year-end review, you can see which clients deserve more attention and which need a frank conversation. Renewals themselves are covered in tracking client contract renewals.
| Question | Without time tracking | With time tracking |
|---|---|---|
| What does this client cost us? | The partner's estimate | Actual hours times hourly cost |
| Is the fee right? | Renewed as is | Compared with cost before renewal |
| What do we quote a new client? | Gut feeling | Based on similar clients |
| Who on the team is overloaded? | Shows up when someone complains | Shows up in the weekly hours |
What should staff record in a timesheet?
The client, the task, the number of hours and the date, plus a short note if needed. Ask for more detail than that and the team will put logging off until the end of the week and forget.
- Link hours to tasks that already exist in the system rather than free text, so the numbers add up automatically per engagement.
- Keep internal time (training, meetings, admin) separate from client time, or every file will look more expensive than it is.
- Make logging at least weekly, and daily is better. Memory after two weeks can't be trusted.
- Link the timesheet to attendance, so you can check that total client hours make sense against working hours.
After two or three months of steady logging, you can split hours by stage of work: planning, fieldwork, review and reporting. That split shows where the time really goes. You might find, for example, that a large share of some clients' hours goes into waiting for documents and chasing them. You can fix that with a clear list of required documents sent to the client at the start of each year, and an agreed date for handing them over.
How do you get the team to log their hours?
Explain why, and use the numbers in front of them. Most resistance comes from feeling watched, and it fades when the team sees the numbers going into client pricing and work allocation.
Make logging quick: one screen, tasks ready to pick, and it opens on a phone. If someone notices they are carrying two difficult clients while colleagues aren't, their logged hours are the evidence when they ask for the work to be shared out. It also helps a lot when the partner logs their hours like everyone else.
Don't use the first month's numbers for pricing decisions. The team needs a few weeks before logging becomes accurate.
Is Excel enough for timesheets, or do you need a system?
Excel is fine for a first trial with a small team, as long as there is one shared file with fixed columns for client, task and hours. Once the team grows and the client list outgrows a single file, pulling it all together at month end becomes a job of its own.
A system totals hours per client and engagement automatically, shows them on the dashboard next to overdue tasks, and produces profitability reports without copy and paste. It also avoids the usual problem with shared spreadsheets, where one person types a client's name one way and another types it differently, so the same client's hours end up split across two rows. In 360 Audit, the system Visual Innovate built for audit firms, the weekly timesheet and clock-in sit on the same dashboard, linked to projects, tasks and clients. You'll find it among our products, and for the wider picture see what an audit firm management system should bring together.
How do you start tracking hours at your firm?
- Week oneClient list and current tasks set up in the system
- Month oneEveryone logs, and the numbers are for learning only
- Month twoFirst review of how time spreads across clients
- First renewalThe fee is compared with actual cost
If your firm has its own pricing method, or accounting software you want connected to the hours, that is part of custom software development. Tell us how you set fees today and how many people are on the team through the contact page, and we'll suggest a way of logging time that fits.
Questions our partners ask
Do staff need to log time to the minute?
Usually not. Quarter-hour or half-hour units are enough to see how time spreads across clients, and they make logging easier for the team.
Does time tracking mean the firm is watching its staff?
The aim is to know what each client costs. When that is explained to the team and the numbers are used for pricing and spreading the workload, most staff accept it.
What if our fees are fixed rather than hourly?
Then time tracking is even more useful, because it tells you whether a fixed fee covers the actual time or whether the client takes more than they pay for.
Written by the Visual Innovate team, the people who build, host and follow up systems, websites and apps for our clients in Jordan, Saudi Arabia, Oman and Egypt.
