Definition
Time tracking is the practice of recording how long you spend on each client, project, and task, so hourly work can be billed accurately and project costs can be measured. Records come from timers, manual entries, or timesheets and feed directly into the billable hours on an invoice.
Also called: Time logging, Time recording
Time tracking in practice
Track time as you work, not at the end of the week. Time reconstructed from memory is almost always underestimated, which means unbilled work and lower effective rates.
Even on fixed-price projects, tracking time shows whether your quotes are realistic. Comparing tracked hours to the fixed fee reveals your actual hourly rate and helps you price the next project.
Record a short description with each entry. It turns raw hours into invoice line descriptions and gives you evidence if a client questions the time billed.
Example
A bookkeeper tracks 3 hours 20 minutes on reconciliation and 1 hour 10 minutes on payroll for a client. At month end, her invoice lists both tasks, totaling 4.5 hours at $70 per hour.
Frequently Asked Questions
Should I track non-billable time?
Yes. Knowing how much time goes to admin, sales, and revisions helps you set rates that cover it and spot clients who take more time than they pay for.
What increment should I track time in?
Many professionals bill in 6- or 15-minute increments. Track actual time, then round consistently according to the rule in your contract.
Related terms
- Timesheet A timesheet is a record of the hours a person worked, broken down by date, client, project, or task.
- Billable hours Billable hours are the hours of work that can be charged to a client under the terms of an engagement, as opposed to non-billable time spent on administration, marketing, or internal tasks.
- Hourly rate An hourly rate is the price charged for one hour of work.
- Time and materials Time and materials (T&M) is a pricing arrangement in which the client pays for the actual hours worked at agreed rates plus the actual cost of materials, often with a markup.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.