Time Tracking Best Practices for an MSP

Effective time tracking is an important part of running a successful MSP. By tracking your time accurately, you can better understand how you are spending your time and make informed decisions about how to allocate your resources. Here are some best practices to follow when it comes to time tracking in an MSP.

Why Tracking Time is Critical

There is sometimes a debate on the merits of time tracking in an MSP. The question posed is “if I am billing a fixed rate to my customer, why do I need to track time?” In other words, why do I have to do this clerical work if the customer will never see it?

There are a few reasons to track time in an MSP. First, tracking time helps you understand which customers consume the most of your time. This can be useful for identifying which customers may be more profitable or less profitable. Second, tracking time allows you to see which applications and issues consume the most time. This can help you prioritize your work and allocate resources more efficiently. Third, tracking time can help you identify problem end users or equipment issues that may be causing inefficiencies.

Finally, tracking time can help you know when to increase your rates. By understanding how much time you are spending on each customer, you can make informed decisions about whether you need to adjust your rates to ensure that you are compensated fairly for your time.

Time Tracking Best Practices

Time tracking is crucial for MSPs to allocate resources and make informed decisions. Here are some best practices for tracking time effectively:

1. Use time blocks: Instead of tracking time in small increments, try using blocks of time (e.g. half-hour or hour blocks) to make the process more efficient.
2. Make notes: Include detailed notes about the work you are doing so that you have a record of what was completed. This can be helpful for billing purposes and for understanding how you are spending your time.
3. Track time consistently: Make time tracking a habit by doing it consistently, whether that means tracking your time daily, weekly, or at some other regular interval.
4. Use a time tracking tool: There are many time tracking tools available that can make the process of tracking time easier and more efficient. Look for a tool that works well for your needs and is easy to use.
5. Use it for more than billing: Time tracking can be used for more than just billing purposes. It can also be used to improve efficiency, identify areas for improvement, and make better use of your time.

Let’s tackle two of those in more detail since they are the big stumbling block for many MSPs: “use time blocks” and “use a time tracking tool.”

More on Time Blocks

Using time blocks can be a more efficient way to track time, particularly in an MSP where you may be working on a variety of tasks and projects. Instead of tracking time in small increments (e.g. 2 minutes here, 3 minutes there), try using blocks of time (e.g. half-hour or hour blocks). This can help you avoid the hassle of tracking lots of small increments of time and can make the process of time tracking more streamlined. [read our blog on why “interrupt-driven work” in an MSP is a bad idea]

How do you use longer “blocks of time” in reality though? You ensure you block out enough time to actually work the ticket or project task. One of the biggest hurdles for an MSP is the high transactional cost of a technician jumping from ticket to ticket instead of focusing attention on a single ticket until it is resolved or set waiting (e.g., waiting on parts).

It’s important to track all time spent on work-related tasks, even if those tasks don’t result in a resolution. However, you may decide that it is not necessary to track time on every single task, especially if those tasks are relatively small and don’t consume a significant amount of your time. In general, it’s a good idea to track time on tasks that are important or that are part of a larger project, and to use your discretion when it comes to tracking smaller, less significant tasks. That said, when to, and not to, track time on “small task” should be an organizational decision, not a personal one.

More on Use a Time Tracking Tool

Using a time tracking tool can be a helpful way to track time and make the process more efficient. In the case of an MSP, it’s often a good idea to use a professional services automation (PSA) tool like Autotask or ConnectWise Manage to track time. These tools are specifically designed for MSPs and can help you manage your projects, track time, and bill your customers.

If you are using a tool like Rocketship to schedule time to work for your customers, you may also be able to automate some of the time tracking process. Automating time tracking can help reduce the labor intensity of tracking time and can help ensure that you are accurately tracking all of your time. By automating certain aspects of the time tracking process, you can free up more time to focus on other tasks.

Final Notes

In conclusion, time tracking is an important part of running a successful MSP. It helps you understand how you are spending your time, identify areas for improvement, and make informed decisions about how to allocate your resources. There are a few best practices to follow when it comes to time tracking, including using time blocks, making detailed notes, tracking time consistently, and using a time tracking tool. By following these best practices and using a PSA, you can make the process of time tracking more efficient and effective. Automating certain aspects of the time tracking process can also help reduce the labor intensity and ensure that you are accurately tracking all of your time. By tracking your time effectively, you can better manage your projects and ensure that you are compensated fairly for your time, even when you use fixed billing.

Edit/Update

In responding to a reddit/r/msp thread that involved some conversation around time-tracking, I realized I neglected another key value of time tracking: separating truth from fiction. People, even you, will generally under-estimate how much time they spend on things they like, and over-estimate how much time they spend on things they dislike. By tracking time, you can better fine-tune how productive you are on a daily basis by adjusting “time spent on activity,” whether that’s working a ticket, managing a project, or making sales calls.