From Micromanagement to Strategic Insight: Transforming Time Tracking in MSPs [free ebook inside]

Time and time again, I address what I consider to be one of the toughest processes to implement and culture to build - Real-Time Time Tracking. A tale as old as time. This is a hot-button issue for technicians within the MSP/ITSP Industry. When done poorly, your team WILL feel micromanaged and untrusted, resulting in dissatisfaction and high turnover.

Accurate time tracking is a valuable culture to build for your company, but if implemented poorly it can be more detrimental than beneficial.

The Why: Importance of Time Tracking

Time tracking plays a key role in understanding both profitability and capacity within the business, as well as delivering several other benefits critical to an MSP's success:

Profitability

Financial Forecasting: Accurate time tracking enables forecasting, helping you plan for year-end raises, potential bonuses, marketing efforts, and hiring decisions.

Identifying Unprofitable Agreements and Projects: It also helps pinpoint unprofitable agreements and projects, allowing adjustments to be made for better financial health.

Resource Management

Capacity Planning: By tracking time, you can get a clear picture of how much work your team can realistically handle. This data helps you better plan for future projects, ensuring you have the right number of technicians available and minimizing the risk of over-committing to client demands.

Efficient Workload Distribution: Time entries give leadership visibility into how much time each technician spends on tasks, helping identify bottlenecks and resource shortages. This allows for more balanced workload distribution, ensuring no one is overloaded while others are underutilized, improving overall team efficiency.

Project Management and Delivery

Streamline Project Scoping and Estimates: By tracking time effectively, you can review past projects and improve your ability to estimate how long future projects will take, leading to more accurate timelines and expectations for clients.

Service Level Agreements (SLA) Compliance

Tracking SLA Adherence: Time tracking helps ensure technicians are meeting SLAs, providing the data needed to assess response and resolution times. This allows you to identify areas where improvements are needed.

Transparency with Clients: Having accurate time logs allows you to present clients with clear, verifiable records of the time spent resolving issues, reinforcing accountability and trust.

The Process: Preparing to Introduce Time Tracking

To prepare for the conversation about time tracking, establish a clear process that supports accurate and consistent time entry. The process should include verifying the agreement, selecting the correct work role, work type, and billable rate. You will need to tailor the time entry process to the PSA you are using. Here's a sample of what the process should look like.

Agreement Verification: While this is the primary responsibility of the dispatcher, it’s everyone’s responsibility to ensure the correct agreement or contract is assigned to each ticket. The Dispatcher (if you have one) may incorrectly assign an agreement that may or may not cover the work being performed or the scope of the work may change resulting in the need to update the agreement on the ticket.

When to Enter a Time Entry: Time must be logged either during the task or immediately after. Change the ticket status to “In Progress” to initiate timers, which many PSAs automatically support. Entering time and notes on any ticket must include the time it takes to write said notes. This also encourages note taking on tickets. Good ticket notes help establish historical trends of problems, are a log to help resolve customer disagreements, and could even be useful evidence in a legal defense.

Notes and Status Updates: As the task is completed, notes should be entered and the timer stopped. Work roles, work types, and billable flags must be properly set. Finally, the ticket should be updated to reflect its next status (Resolved, Waiting Client, or Needs Scheduling).

Daily Time Entry Expectations: Team members should ensure their calendars reflect X hours each day. Any gaps should be accounted for using “payroll wrap” entries.

Once this process is complete, you're ready to have the conversation.

The Conversation: Communicating the Process

It’s crucial for every team member to understand how their time tracking impacts the business. I see the delivery of this conversation fail more often than I'd like to admit. This conversation should be pre-planned and a process should be written and reviewed with each team member. Start with the why, include the impact, explain how with the written process, and explain how you will be following up. Here’s an example of how the conversation should be structured.

Why It’s Necessary: "We need to track time to understand the profitability of our agreements and projects. Not only does this help us forecast finances and plan for staffing needs, it also allows us to gauge capacity and help avoid burnout."

Impact on the Business: "Accurate time tracking allows us to make informed decisions that affect raises, bonuses, and potential hiring. Entering your time has a direct impact on this because…"

The Process: "Let’s review the process together so everyone is clear on what’s expected."

Follow-up Expectations: "I’ll be reviewing time entries daily and addressing any issues. Here’s what I’ll be looking for…I’ll be addressing concerns as I see them and will expect this process to be followed each day moving forward.”

Encourage open discussion and address any questions or concerns your team may have. By approaching this way, you are giving your team the why, what happens if not, and how to succeed.

The Follow-Up: Maintaining Accountability

This is the most critical part. Your actions can make or break this process. It's important to know what to address and when to address it. Hopefully, you've already set these expectations with your team and provided them with the process to follow. Understand that building a culture of time entry takes time. Like with all processes, this will not be an overnight success. You will inevitably need to remind your team to enter their time while you build the culture. You should review time entries and calendar entries daily. Best practice is to review all calendars and time entries at the end of the day.

Best Practices

Daily Time Entry and Calendar Review: Review time entries and calendars at the end of each day to ensure compliance. Avoid mid-day check-ins that could come off as micromanagement.

Seek To Understand, Go In Curious, and Assume Positive Intent: You should approach the situation by asking what happened with the assumption they simply forgot or got caught up with other tasks. Seek to understand gaps of 45 minutes or greater to start.

“Hey ___, can you help me? I see there were X minutes/hours of time that were unaccounted for today. What ticket/project were you working on? I just want to make sure we can track the time to the correct client and agreement as we discussed.”

This assumes they were busy working on a ticket or project and simply forgot. Maybe they were helping another team member solve a complex issue. It happens. Ask that they account for that time on the correct ticket or project to ensure we have up-to-date and accurate data to track the agreement's profitability. Refine your time entry process to help clarify what to do for any scenarios that may arise.

Pitfalls to Avoid

Now that we know what vision of good looks like, let’s take a look at common pitfalls.

Avoid using Time entries as a measure of productivity: Time tracking should not be used to reprimand employees for “working fewer hours” than expected. This approach can harm trust and morale.

Making Assumptions: Avoid accusatory language when addressing time gaps. This will cause anyone to immediately become defensive. Rather than asking, "Why is there a gap on your calendar?" consider a more open, non-confrontational approach.

Overemphasizing Small Gaps: It takes time to pivot from one ticket to another, and the small gap could be for a multitude of other legitimate reasons. Someone may have asked them a question, and they may have needed a quick break to get a drink, go to the restroom, or grab something to eat. It's also possible they answered a phone call that didn't require a time entry on a ticket. Addressing these gaps does more harm than good.

Conclusion

Implementing a time-tracking process within an MSP or ITSP is a delicate but necessary task. It plays a vital role in understanding profitability, managing capacity, and forecasting future growth. However, the key to its success lies not just in the process itself, but in how it is communicated and enforced. Leaders must approach this with clarity, empathy, and patience, ensuring that their teams understand the "why" behind the process and feel trusted rather than micromanaged. Building a culture of consistent time entry takes time, and it requires follow-up that is supportive rather than punitive. By fostering open communication, addressing concerns thoughtfully, and seeking to understand rather than assume, leaders can set the stage for long-term success without eroding trust or morale within their team.