Billable Hours Tracker: How To Maximize Team Performance And Cut Operational Costs

Billable Hours Tracker: How To Maximize Team Performance And Cut Operational Costs
Summary: Can a billable hours tracker reduce spending and maximize human resources? This ultimate guide covers the basics, benefits, and features to look for.

The Ultimate Billable Hours Tracker Buying Guide

A billable hours tracker gives staffers the power to monitor their workday and maximize performance. But you can also use it to improve customer relations. All tasks, project milestones, and expenses are accounted for. Which makes it easier to generate client invoices and keep accurate records. In this epic article, I share everything you need to know about tracking billable hours, from unexpected benefits to which industries reap the most rewards from time tracking apps. I'll also highlight must-have features and deep-dive into how this software helps you determine product cost. First, let’s review some of the basic functions and how a billable hours calculator contributes to your bottom line.

Here's A Sneak Preview Of This Ultimate Guide...

  1. What Is A Billable Hours Tracking App And How Does It Improve Your Profit Margins?
  2. 8 Reasons To Invest In A Billable Time Tracking System
  3. Which Industries Benefit From A Time Tracking App?
  4. 8 Billable Time Tracking Software Features That Deliver Maximum ROI
  5. How Does A Billable Hours System Help You Determine Product Cost?
  6. Can A Time Tracking App Improve Customer Relations?
eBook Release: Billable Hours Tracker: How To Maximize Team Performance And Cut Operational Costs?
eBook Release
Billable Hours Tracker: How To Maximize Team Performance And Cut Operational Costs?
The right billable time tracking system can help you reduce spending and make the most of internal talent. This guide can help you determine if hours trackers are a wise investment for your team!

1. What Is A Billable Hours Tracking App And How Does It Improve Your Profit Margins?

Before we explore the many reasons why you should invest in billable time tracking software for your team, let’s cover the basics. For example, the core functions and how the right app can help streamline work processes. Here are some fundamentals that every billable time tracker app buyer should know beforehand.

What Is A Billable Hours App?

This software allows you to track billable hours and streamline client invoicing. Employees can monitor how long they spend on each task and productive versus idle time. They can also differentiate between billable hours versus non-billable hours. For example, they worked on the client’s project for 5 hours today, but the other 3 hours were dedicated to paperwork, team meetings, and other in-house tasks.

What Are The Key Functions?

Every billable tracking system performs key functions that help you improve team collaboration, productivity, and performance. These include hour timers, attendance, expense management, and invoicing. In short, a time tracking and billing app makes it easy for your staffers to evaluate their workday, as well as monitor projects and plan their schedule accordingly. For example, they can only allocate 10 hours to the project this week based on the client’s budget.

How Does A Billable Time Tracking Tool Improve ROI?

A billing and time tracking system improves resource allocation because you have better oversight. You can see how much time you invest in every project and if there are additional expenses involved. Another perk is being able to evaluate employee work capacity to prevent burnout. Thus, employees are more satisfied on the job and complete tasks more efficiently. Clients and customers are also happy that they receive accurate invoices and supporting documentation, such as a detailed breakdown of how much time was spent on their project and upcoming payment milestones.

2. 8 Reasons To Invest In A Billable Time Tracking System

Is it really the right time to purchase tracking billable hours software? The best time tracking app can improve business operations across the board. Whether it’s reducing absenteeism rates or stretching available resources. Below are just a few reasons why you should consider billable time tracking systems for your organization, regardless of your industry or staff size. You can also download our billable hours tracker guide for bonus tips to set a realistic budget. 

Boost Employee Accountability

Employees are able to take charge of their own workday and monitor personal performance. For example, they can see how long it takes to complete a task. Or if they waste time on unnecessary tasks that don’t really contribute to the company, like spending half an hour on social media when they should be completing the next milestone. They’re more accountable because everything is tracked in the system and every minute is accounted for. That said, they can also strike a better work/life balance. For instance, taking frequent breaks to recharge.

Streamline Payroll Processing

Another standout benefit of time tracking and billing apps is to simplify payroll. Employees don’t just monitor individual tasks. They can also clock in and out using the software. Thus, it’s easier to tabulate work hours and generate paychecks during each pay period. Many HR systems also feature direct deposit and employee profiles. For example, every profile includes the pay rate and deductions. Then you automatically submit payments to their bank account and store the digital payslip. Keep in mind that some tools require accounting integrations for payroll processing. However, even the most basic time tracking systems can help you calculate work hours and employee attendance.

Simplify Client Billing

Clients don’t want to jump through hoops when it’s time to pay the bill. Time tracking and billing apps allow you to quickly generate invoices based on billable hours. Many also have integrations for payment gateways. That way, clients can fund the project using a trust payment site directly within the invoice. And you can keep track of how much is left on the bill and overall payment status.

Keep Accurate Records

You need to maintain total transparency. If a client asks for supporting documentation or an explanation of the costs, you must deliver. Billable hours trackers help you keep all the information up to date. You can also include detailed explanations for every task or additional expense. For instance, this is what the task involved and which team members were assigned.

Improve Customer Relations

Streamlined invoicing and total transparency translate into satisfied customers. They’re more likely to bring in repeat business or refer your business because everything was seamless. They didn’t have to wait for the invoice for weeks or dispute unverified charges. You’re also more likely to stick to their budget because you can monitor their max capacity. For example, they’ve only approved X hours this week because they need to secure more funding for the project.

Track Expenses

Billable hours aren’t the only expense to consider. Your projects might involve additional costs. For instance, the software you need for the project or outsourced tasks that fall outside the client agreement. Billable hours tracking software helps you track expenses across the board. This also allows you to generate more accurate estimates for future clients. As an example, a task took much longer to complete than expected. So, you can adjust your pricing to improve profit margins.

Reduce Operational Costs

You no longer have to manually track billable hours or calculate payroll. The same goes for creating client invoices. The system takes care of all these tedious tasks for you, which reduces operational costs and alleviates employee workload. For instance, the HR team spends an hour each week finalizing payroll and verifying work hours instead of devoting an entire day to the process.

Improve Team Productivity

One of the most significant benefits of billable hour tracking systems is boosting team productivity. You reduce idle time, streamline work practices, and reduce task overlap. As an example, time tracking reports show that 3 people work on virtually the same task every week, or that an employee spends half their day wrapping up tasks because they lack the necessary tools or support.

3. Which Industries Benefit From A Time Tracking App?

EVERY business can benefit from billable time tracking tools. However, there are some industries wherein tracking apps are indispensable. As they allow you to keep track of remote workers and boost customer satisfaction stats. If your business falls into any of these niches, tracking tools are a must-have, especially for geographically dispersed teams that need to centralize payroll, client billing, and attendance tracking.


Billable hours tracking apps are ideal for on-the-go industries, such as the transportation sector, wherein drivers must track drop-offs, pick-ups, and reimbursable expenses. For example, long-haul truck drivers start the clock when they depart and upload snapshots of receipts along the way. Then, your logistics department can submit invoices to the client and/or calculate the driver’s wages for this haul.


Whether you are commission or wage-based, insurance companies benefit from billable time tracking tools. For instance, remote sales reps manually input client meetings, paperwork completion, and other essential tasks, while your call center team can clock in and out using the software. Likewise, you’re able to use the app to track individual sales and calculate external partner commissions.

Service Providers

Service providers in every sector should consider time tracking and billing apps, including the healthcare sector. This is due to the fact that services are more difficult to quantify. Unlike products, you must consider all the time and costs involved in each service. As an example, what should you charge based on your expertise, time commitment, and outsourced tasks? Aside from estimates and price analysis, you can also use the system to quickly bill clients and get paid faster.


You need to know how to price your products and add-on services, such as extended warranties or service plans. Billable hours tracking apps don’t just help you tabulate payroll and bill clients with ease. You can also use these tools to evaluate your costs and adjust your price point, as well as track external partner performance. For example, how many hours your remote sales team puts in every week versus the revenue they bring in.

Legal Teams

Lawyers, paralegals, and other legal teams can use these apps to accurately bill clients. For instance, how many hours did you devote to their case this week? Do you need to bill them for additional fees, such as filing court documents? Are certain clients on retainer? Are there payment plans involved? If you use an accounting integration, like QuickBooks, you can even view the status of client payments.

4. 8 Billable Time Tracking Software Features That Deliver Maximum ROI

Once you’ve established that time tracking software is best for your bottom line, you’re ready to create a shopping list. These are the must-have features that deliver maximum value for money. Business reports, employee feedback, and current objectives help you determine which functions offer the best ROI. However, there are 8 features that every billable time tracking app should include.

Client Invoicing

One of the most value-added features is client invoicing. This enables you to rapidly generate bills for hours worked and include a description of the tasks involved. The system automatically compiles an invoice for every project. However, your team can also add expenses manually. For example, there may be client meetings or other processes that are more difficult to track in the system. Another feature to look for is branding. Does the system allow you to add your logo to invoices? Are there templates for different types of transactions?

Time Tracking

Employees and external partners should be able to start the clock when it’s time for the next task and record breaks. Some systems even allow them to request days off or vacation time to avoid short-staffed shifts. A tie-in feature is break timers. The system automatically lets them know when it’s time to take a breather. The best time tracking tools must be easy to use for every member of the team. Otherwise, organization-wide adoption will be time-consuming and costly because you have to provide one-on-one support.

Expense Tracking

Staffers are able to include expenses that fall outside the project purview. As an example, they had to purchase additional supplies or software to complete the task. But this isn’t just for unexpected fees. You can also use this feature to re-evaluate your profit margins and work practices. For instance, you currently spend 25% of your budget on outsourcing. Can you possibly handle these tasks internally to reduce spending and improve your bottom line? Is it time to purchase replacement software that’s more cost-effective?

Employee Profiles

Every billable time tracking app should include employee profiles with all the essentials. From contact info to work capacity, as well as which projects staffers are currently working on and time-off requests. In most cases, employees can access their profiles to make necessary changes, which lightens the workload for your HR team.

Payment And Accounting Integrations

Many time tracking tools have integrations that allow you to accept payments and update your accounting records. For example, clients can pay invoices immediately using PayPal. Then your QuickBooks integration automatically updates the total balance due and adds the payment to their profile. Verify which integrations are available with the time tracking software vendor beforehand.


The system gathers all the time tracking data from this pay period to generate a timesheet. Employees are able to see how many hours they’ve worked and if they’ve gone over their max capacity. The system should also have an archive of past timesheets so they can evaluate their performance at a glance.

PM Tools

Most project management tools include a centralized dashboard where you can assess all on-going projects. Which team members are involved? How much work have they accomplished? What are their upcoming tasks? There should also be a progress bar for the overall project and employee work capacity. For instance, this person is about to reach their limit. So, you may have to re-assign tasks or plan on overtime.


Big Data is crucial when it comes to team performance and expense management. Thus, every time tracking and billing app must include analytics. Preferably, customizable reports so that you can monitor KPIs and identify areas for improvement. As an example, charts and graphs that help you identify top performers versus staffers who do the bare minimum.

5. How Does A Billable Hours System Help You Determine Product Cost?

One of the standout benefits of billable hours tracking apps is that they help you re-evaluate your price point. Are you charging enough for your services? Is there a way to increase your profit margin? Are your prices competitive enough to ensure long-term success? Let’s review 4 crucial ways that time tracking apps influence your pricing model.

Evaluate Past Projects

How much did you spend on similar projects in recent months? Were there tasks that dug into your profit margin? What about unexpected fees that you need to consider in your price point? A great way to determine product cost is to look at historical data. Billing apps let you evaluate past contracts or service agreements and identify all the costs involved. To illustrate, you calculate billable hours, third-party resources, and tools you need for this service. Only to realize that you’re actually losing money or barely breaking even. Billing apps give you a detailed overview of everything you put into the organization so that you can set prices that are competitive and fair to hard-working staffers.

Track Billable Hours

One of the most significant pricing factors is time. How much time does it take to complete individual tasks? For example, manufacturing your product, marketing, and customer care. These are all intangible processes that you need to account for in your pricing. Not to mention, the payroll for your sales team. One of the core functions of billing and time tracking software is calculating "behind the scenes" work hours.

Identify Financial Risks

There are certain tasks that are problematic or time-consuming. Maybe it requires more than one team member or niche expertise. Billable hours tracking software helps you spot these risks ahead of time and re-think your pricing strategy. For instance, you may need to remove certain services from your menu because they’re simply not profitable. Then again, there may be some products that are no longer viable because they have too many back-end processes.

Account For External Expenses

You might need to outsource certain aspects of the project or product development. In which case, billable hour tracking tools help you account for these external costs. Then factor them into the price tag. Let’s say that you need to curate content for this design project. Or, maybe there are several rounds of market research and product testing involved. These tasks negatively impact your profits if you don’t pass them on to the customer.

6. Can A Time Tracking App Improve Customer Relations?

Many organizations invest in billable time trackers to improve customer satisfaction rates and retain loyal clients. But how exactly does this software impact your customer relations and sales? Below are some CX benefits you can use to make a stronger business case for time tracking systems.

Generate Accurate Estimates

Most of us have experienced this before. We receive a bill that catches us off guard. It’s higher than expected and there are "hidden" fees we’ve never even heard of. However, if we know about these costs upfront, we can budget accordingly. Billable hour trackers generate spot-on client estimates so that they can make the best buying decision. No unwanted surprises when it’s time to fund the first milestone since all the costs were outlined in the initial estimate.

Provide Supporting Documentation

Everything is stored in the system. You know how much you spent on extra content, services, or equipment. Plus, you have supporting documents in case customers want to verify costs. For instance, they need to know why their invoice is slightly higher than expected. Maybe they forget that they approved the additional funding, or they simply need receipts to update their own accounts.

Stay Within The Client’s Budget

Clients generally expect you to stay within budget. They’ve given their stamp of approval for certain tasks, and they’ve signed the contract. Billable hours tracking software helps you keep spending in check to avoid payment delays. As an example, they don’t have enough to cover this upcoming milestone because their accounting department needs to approve extra funding. Thus, you have to wait longer to get paid since you went over their max capacity.

Monitor Employee And Project Capacity

Speaking of capacity, most systems feature a progress bar or percentage to track billable hours. This applies to employee work hours and the overall project. For instance, you can only allocate 25 hours to the project this week due to funding issues. Or, your team is working on another project wherein the deadline is fast approaching. Billing and time tracking systems let you plan ahead and stick to the delivery schedule or monitor capacity so that employees strike a balance, which leads to higher customer/client satisfaction scores.

Maintain Transparency

Customers want to do business with organizations that respect the professional relationship and maintain open communication. They also expect transparency in all your business practices. Time tracking and billing apps help you keep everything above board. Customers can review their invoices and itemized cost breakdowns at any time in the system. They can even follow up with your team right away to clarify expenses.

Simplify Payment Processing

Clients usually want to take care of the bill ASAP and move onto the next phase of the project. Even if it’s a one-off invoice, prompt payment is often a top priority because they want to maintain a good relationship with your business. As I mentioned earlier, many billable hour tracker apps feature payment integrations. You can pair it with your preferred payment gateway to simplify the entire process for your customers instead of requiring them to keep a credit card on file, or spend half an hour figuring out how to use a third-party payment site.


A billable hours tracker might become the most powerful tool in your software arsenal because it’s multifunctional. Employees can use it to monitor projects, work capacity, and individual tasks. Some systems even feature attendance tracking and expense management all in one. The key is to find the best app for your business. Our exclusive directory has all the leading vendors in one place. You can evaluate pricing options, support services, and selling points, then visit their website to learn more about their standout features.

Download your copy of our eBook Billable Hours Tracker: How To Maximize Team Performance And Cut Operational Costs for all the insider info. It even features a bonus section to help you set a realistic budget for billing time tracking software so that you get top value for money and avoid overspending.

eBook Release: Homebase
Make work easier. Running a small business has never been harder. Homebase helps with free tools to track time and manage your team.