No matter if your agency is big or small, it is essential to monitor the job health of how you deliver client outcomes. Why is job health so important? Because job health links directly to profitability.
Every client job takes time to deliver. And time costs money. When an agency has a good understanding of job health, it means they understand how much time is needed to perform different job types, and how much that effort costs. Understanding the costs of meeting client needs gives an agency the basis to calculate margin, which drives profitability.
To effectively manage a healthy agency, managers need a combination of high-level and detailed insights to understand job health and – by extension – team utilization, margin and profitability. The most successful agencies have the ability to quickly and easily switch between high-level and detailed insights, to better inform understanding around job health.
Through insights to job health, they know when their team is over-servicing clients. They understand where teams are spending their time, and they clearly understand which types of projects are the most profitable. There are no unpleasant surprises at month end when unaccounted costs need to be written off or the client needs to be charged more to cover additional execution time.
With over two decades of agency experience under our belt, here are our three surefire tips to make sure you have excellent understanding of your job health, and that the only surprises you uncover each month are the good kind.
Tracking time is table stakes for any agency. Whether tracking billable or non-billable time, agencies need to track the cost of everyone’s time associated with every aspect of a job. But there is a lot more value to be gained from using timesheets beyond making sure they’re completed and submitted daily. When set up thoughtfully, timesheets can deliver rich insights around whether you are making or losing money on each job.
Healthy agencies use timesheets to deliver a detailed view of how employees deliver tasks, jobs and projects. These perspectives help agencies calculate capacity utilization, the cost of delivering work and optimizing time management. Data from timesheets is also essential to improve the accuracy of client billing and payroll management.
A powerful timesheet-driven insight to assess job health is analyzing the cost of time against one, or more, jobs to assess true margin. For most agencies the number of jobs, and multiple types of jobs, make mapping time and cost to jobs simply impossible to achieve manually. Technology-based solutions are the answer.
Function Point agency management software enables timesheets to be quickly and easily mapped to comprehensive, standardized job types and staff costs. As jobs evolve, changes are captured in real-time and cascade through the entire system to deliver a true, accurate view of cost, time and margin at any moment. The platform also offers three simple built-in methods for time capture: a timer, a flat number able to be entered by staff manually or a default fifteen-minute increment.
When timesheets are used to the fullest extent and incorporate time, job types, cost and margin, agencies have excellent insights to monitor, and improve, job health.
Tracking administrative costs
It is no secret that, in the agency world, time costs money. Living with that reality, agencies need a means to track every cost that relates to a particular job. There are obvious costs, such as purchasing stock photography on behalf of a client. And there are less obvious costs, such as the time taken by a Designer to print those stock photography samples to review with the client.
Every day, across every agency, seconds of time spent on small “quick” jobs turn into minutes. Minutes roll into hours. Before you know it, month end arrives and you’re writing off cost to cover a long list of small, quick administrative jobs necessary to delivering client outcomes.
While you don’t want to over-charge clients for every small job the team performs, you also don’t want to erode revenues by writing off too many costs from your agency model. There is a balance to strike between delivering client outcomes, charging for time fairly and ensuring your agency makes a profit.
Achieving that balance is possible with technology. Function Point gives agencies quick ability to understand where money is being left on the table. Through automation of project briefs, comprehensive time tracking, dynamic task management, robust workload forecasting and collaborative GANTT charts, agencies have the information they need to be sure every team action is captured and accounted for financially. Function Point also delivers the ability to easily factor in allowances to capture the smaller costs of doing business in job categories such as Project or Account Management.
Realistic accounting to cover all costs of delivering client needs is a core factor of optimizing job health.
Real-time, data-based reporting
Only when all true costs are linked to the time needed to deliver a job, can agency managers accurately assess overall job health. Essential to assessing job health is having the right information at your fingertips, when you need it. Business intelligence (BI) gathers data from multiple sources and delivers that information in centralized, visual formats. Visualizations help decision-makers quickly absorb large amounts of information, identify trends and glean useful business insights.
Business intelligence delivers real-time reporting on team efficiency, utilization, job status and much more. Function Point’s Premium BI solution delivers customizable reporting, out-of-the-box, which allows agency managers to design the views they need to improve job health and returns on investment (ROI). The solution also provides real-time alerts allowing agencies to track the status of jobs with up-to-the-minute accuracy.
Granular, detailed reporting lets managers view specific information on teams, tasks, time, jobs and dependencies to make operational improvements. Higher level reporting gives stakeholders quick perspectives on which jobs, projects and services have the greatest and lowest margins, where teams may be over-servicing clients and what decisions need to be made to improve profitability or job health.
Understanding time, cost and margins is critical for agencies to monitor and improve job health. The secret to success? Easily customizable, real-time BI-based reporting grounded in live data.
Get started with improving job health
Oftentimes agency owners are lulled into thinking they understand job health, revenues, costs and margin because they’ve run the business for lengthy periods of time. But there is a stark difference between thinking you know the answers and actually knowing the answers because you have data-based insights.
Explore more about how Function Point removes the guesswork from understanding job health to improve profitability by booking a demo.