Why Time Tracking is Critical for Contractors

As a business owner, you’ve got a constant list of things to do, keeping you busy late into the nights and weekends.

So who wants yet another thing like time tracking added to their to-do list?

No one.

Why is tracking time so critical for contractors anyway?

And why have we at SynkedUP invested many months of our development resources into building a new time tracking app?

Because we believe tracking time truly is mission critical to your success as a contractor.

Without it… you’re blind. (Whether you realize it or not.)

When you ask an entrepreneur what KPIs they watch in their business to determine whether they are doing well or not, net profit is at the top of the list.

But net profit is a lagging indicator.

Meaning by the time you know what the net profit is, it’s in the past.

Too late to do anything about it.

You need a leading indicator.

Something to warn you, or confirm to you, that you’re on/off track, before the story is completely written.

Before it’s too late to do something about it.

Leading indicators are critical to running a successful business.

Ignore them, and you’re essentially left with a strategy of relying on luck.

So, if we’re in agreement that leading indicators are critical to be successful, that raises the question of what leading indicators should you be watching and keeping a pulse check on?

Let’s start with the most expensive resource that a contractor has: labor.

Time.

When you send a crew out to do a job – you are immediately incurring a large expense.

And you need to have priced that job correctly, so it not only covers your expenses, but also leaves a profit margin for you.

You incorrectly estimate how much labor that job takes to complete, and poof, there goes your margin.

So what is a leading indicator KPI that every contractor needs to watch?

Estimated hours vs actual hours on every job.

Ok cool, seems simple enough, right?

But that means you need buy in from your team to track time.

The crew texting you their hours, scribbling it on paper, and so on isn’t going to cut it.

Sure, you can run payroll that way.

But you can’t get clear visibility into a leading indicator of your success that way: estimated vs actual hours on a job.

E.g. I estimated the job would take 100 hours, but it actually took 120 hours.

If your man hour rate is $100/hr, that 20 hour overrun costs you $2,000.

We have to stop that bleeding.

We have to know if we are on/off track on the job in real time. Before it’s even complete.

When you know in real time, it gives you power.

Power to do something about it to minimize the blow.

Or at the very minimum, learn a hard lesson about how to not repeat the mistake.