There’s no time like the present to start thinking about the changes you would like to see happen at your creative agency. As we have all learned from experience with our failed resolutions, a goal needs to be simple, measurable, and must generate the results we are looking for in a reasonable amount of time, or else it is unlikely to take hold.
A few small changes can make a world of a difference to your creative agency’s profitability. Your business is quite likely structured around the work you do for your clients, and your revenue is based on resources such as your time, your talents, and your ideas. Often times it is difficult to put a price on this type of work, and thus creative agencies tend to miss out by underestimating or under-valuing their work. One of our top tips for profitability in a creative agency is simple: stop leaving money on the table. Adopt a few simple changes in your agency, and you will be shocked to discover how much you’ve been missing out on for so long.
Making a Case for Tracking Time
Tracking time in your creative agency might seem like an insignificant or redundant task. You would be surprised to know that it could actually be the answer to your problems, and the secret to profitability. No matter how you run your agency, adopting solid time tracking habits in all departments of your company is sure to bring about a positive and significant change. Here are a few examples of how introducing time tracking habits to your agency can help you keep on top of your client projects from beginning to end, and stop missing out on earned revenue.
Billing Using Time Tracking Software
Selecting an appropriate billing method for your clients based on the services you offer is key. It is important to find a balance between keeping your prices competitive and ensuring you’re making a profit, all whilst keeping your clients happy and satisfied with your work. Regardless of the method of billing your agency selects, tracking your agency’s time will be highly beneficial and serve your agency’s profits well.
Select this billing option means that you will always be compensated for any overtime hours you spend on a project. It also allows you more flexibility within the scope of work to ensure a job is done properly. Hourly billing requires accurate and consistent time tracking for each person and each task associated with a job. This ensures that everyone is paid appropriately, that clients have clear visibility into a project, and that complete job reports can be generated for record keeping and for future reference.
Billing clients at a flat rate means that your agency is not directly tied to time tracking. You will be paid up front for the work ahead, which means that if you get the work done quickly, you will improve your profit margin. In order to bill at a flat rate, you need to have an accurate perception of how much the job will actually cost you, along with a good idea of the number of hours that need to go into the job, and who at your agency needs to be involved. Tracking time allows you visibility into jobs, and keeps an accurate record of how much time and effort has gone into specific tasks. You can then use this historical information to more accurately predict the amount of time required for the next job.
Retainers can be a great option for both your agency and for your clients; the expense is always consistent, and there is always a steady stream of revenue coming in. Naturally, a retainer requires that every single hour of time put into a project is tracked with accuracy. This way you can produce a detailed report for your clients to show them what they’re getting from their retainer. Being upfront and honest with clients about how much work you’re putting into their retainer is key – it is important to keep your client happy and in the loop, whilst also making sure they don’t take advantage of you.
It’s Starts with Tracking Time
Accurate and consistent time tracking by everyone in your agency is invaluable. It can help you stay on budget, keep clients happy and informed, better predict your estimates, and ensure that everyone is paid for the work that they complete. You never want to downplay how much work a project will take and miss out on any opportunities to bill for work you’ve done. Implementing a time tracking culture is the best way to keep your creative agency team on top of their projects. It allows visibility into jobs to see the profitability of different types of work, and enables you to better prepare for future jobs, and create more accurate estimates to reflect future work.
Making it a Habit
Developing great time tracking habits will open up new opportunities at your agency, and find you that extra money that was previously slipping through the cracks. A project management software like Function Point can also help your agency to manage profits by keeping accurate track of your project expenses and the amount of time tracked against all of the jobs you have on your plate in one easy-to-use system. To learn more, we welcome you to book a demo of our software experts, and let us help you achieve your agency’s goals.
As an Account Executive, Marc knows the deepest nooks and crannies of Function Point like the back of his hand. He's a happily transplanted Torontonian who claims to be able to snowboard and play hockey at the same time.