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February 24, 2012

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Gerri Lynn Martin, CPA, MPM

When I first starting tracking time (many years ago), it was not for billing purposes. At the time, we were writing software programs. All of our jobs were fixed price so I didn't need a billing program. As time went on though and staff grew, I felt like I wasn't making as much money as I thought I should be. So, with a promise not to use the figures against anyone, I required everyone to track all time. I found that I was severly under estimating the time it took for documentation. When I asked people why documentation was taking so long, you will never guess what I found out.... We needed a new photocopier that did a better job of collating. When you need to produce 25 copies of a 200 page document and it keeps jamming, much time was lost by people sitting around and manually collating. Who would have thought!!!

If all you are doing with your billing program is sending out bills, you are wasting your money. Locked inside that program is a wealth of management information. Unlock it and you will be amazed at how much better a business person you become. You can recongize log jams, biggest areas of profitiability, and competitive advantages to name a few.

Clyde McDonald

Another important reason for tracking you time is that in Ontario, and maybe elsewhere, your accounts can be taxed. Taxing is whereby a client can dispute their invoice through an informal court process.

Track all of your time, then give a discount. Or show the total time and total fees on your invoice. Contingency fees are also subject to taxation. By showing all of your time, the taxing officer will be less likely to reduce your invoice.

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