What is a timesheet: time tracking by project.

A timesheet is the sheet where each person records how much time they spent on each project or client. This guide is about hours per project: what you use to bill a client by the hour, pay a contractor by the hour and find out whether a job was profitable. It is not a time clock or working-hours control for employment-law purposes. A time clock says when a person came in and left; a timesheet says what they spent their time on.

The two can exist in the same company and don't replace each other. Anyone who needs working-hours records for labor-law purposes needs a time-and-attendance system, which Tasskee is not. Anyone who needs to know what a client's project cost, how much to charge and how much was left over needs a timesheet. That's what we're talking about from here on.

What a timesheet is

Each row has who worked, on which project, on which task, on what day, for how long and, ideally, a note on what was done. By adding up the rows, you answer questions that without the record become guesses: how many hours did we spend on this client in September? How much should we charge? Who worked the most? Was the estimate right?

It's the habit of agencies, software houses, architecture firms, consultancies, law and accounting firms, and any company that sells expertise. In all of them, the product is people's time, and what isn't measured is neither billed nor improved.

Why track hours

To price

Without history, the price of a project is a guess. With a timesheet, you know the last corporate website took 120 hours, and you use that to quote the next one. The gap between quoted and actual is the cheapest and most useful information a services company can have.

To know the margin

Revenue per project says nothing without the cost of the time spent. An R$ 18,000 contract that consumed 160 hours of a team that costs R$ 90 per hour yielded a R$ 3,600 margin. Another, for R$ 12,000, that consumed 60 hours, yielded R$ 6,600. The first looks better on revenue and is worse on results.

To estimate better

Estimates and actuals side by side teach the team to estimate. If integration tasks always take double what was forecast, the next estimate is born already corrected. That's why time tracking connects with the points of an agile estimate: comparing how many hours each point really cost shows where the team over- or underestimates.

To bill without arguments

A client who pays by the hour wants to see what was done. The timesheet, with date, task and note, is the proof. The conversation shifts from "why this amount?" to "I understand what was done."

To balance workload

The same record shows who is overloaded and who has slack, and whether the team is logging enough hours to be billable.

Billable and non-billable hours

Not every hour worked turns into a charge. Separating the two is what lets you talk about real productivity.

The classic indicator is the utilization rate: billable hours divided by the person's available hours. If someone has 160 hours in the month and 112 are billable, utilization is 70%. There's no right percentage for every role: the partner who sells and administers uses less than the analyst who only executes. What matters is tracking the trend and comparing it with what the hourly price assumes.

Even work you won't bill deserves tracking. If warranty work consumes 15% of a project's hours, that's a real cost, and the next proposal needs to build it in.

Hourly rate and margin

There are two values per hour, and mixing them up is the source of a lot of wrong math.

• Billing rate: what the client pays per hour for each type of work.
• Cost: what the hour costs the company, including salary, payroll charges and benefits, or the amount agreed with the contractor.

Margin is the difference between the two, multiplied by the hours. An example with numbers in reais:

The numbers are illustrative. The math is what matters: the month's margin is the amount to bill minus the cost, and the percentage is the margin divided by the amount to bill. A 50% margin on the hour doesn't become 50% profit, because there's still rent, tools, taxes and non-billable time. That's why the hourly price must also cover the hours that aren't billed.

How to arrive at the hourly price

A practical way: add up the person's monthly cost, divide by the hours they can really bill (never all 160, because there are meetings, vacations and idle time) and add the margin you want. If someone costs R$ 9,000 a month and bills 100 hours, the cost per billable hour is R$ 90. With a 100% margin over cost, the starting price is R$ 180.

The rate also varies by type of work. A bug within warranty can be "do not bill." Consulting can cost more than execution. An older client's rate can differ from a new one's, with a start date for the effective period of agreed increases.

Closing with the client

Closing is the moment when hours turn into a charge. A good process has five steps.

1. Define the cutoff date. For example, the 30th of each month. Hours up to that date are included; the rest go to the next cycle.
2. Review what has no rate. An hour with no defined price can't go to billing at zero, because that hides the error.
3. Generate the document. With the total per task and, if the contract requires it, each entry with date and note. The cost and the internal name of the rate never appear to the client.
4. Lock what was billed. Once closed, nobody can edit the hour, or the document the client received no longer matches the system.
5. Record the invoice and the payment. That way you know what was issued and hasn't come in yet.

What you can't do is correct an hour after it's been billed without leaving a trace. If there's an error, cancel the closing, with a reason, fix it and generate another.

Paying contractors by the hour

Many businesses have freelancers and contractors who are paid by the hour. The process mirrors client closing: a statement per person, up to a cutoff date, with hours per task and the amount to be paid.

A few precautions avoid friction. The contractor's hourly rate is agreed and recorded, with an effective date. The statement is sent and checked before payment. The contractor's receipt or invoice is attached to the statement. And the contractor sees what they're owed, without seeing what the client pays for the same hour.

The payables queue and the receivables queue are independent. An hour can be billed to the client and not yet paid to the contractor, or the other way around. Controlling the two separately avoids the mistake of thinking that money on one side settles the other.

Points and hours

Agile teams estimate in points, which are a relative measure of effort, not of time. Timesheets and points seem like enemies, and in fact they complement each other. By comparing how many hours each point cost, you find out how much time the team actually spends on a size-3 or size-5 task. That calibrates the next estimate and lets you quote in reais a job that was estimated in points.

Two precautions when doing this. Consider only completed tasks, with all of their hours: a half-finished task distorts the math. And when a task has several people, split the points in proportion to each person's hours. To understand the other side, the Scrum guide explains how points are used in the sprint.

Common mistakes in time tracking

• Logging at the end of the month. Memory makes things up. Log the same day, or at most at the end of the week.
• Logging without saying what was done. An hour without a note can't be defended in front of the client.
• Using the timesheet as surveillance. If the team feels the record is there to control them, they log what looks good and not what happened. The goal is to understand the work, not to punish.
• Mixing time clock and timesheet. Wanting the sum of hours to show the full workday produces forced records. They're two controls with different purposes.
• Keeping the hourly rate in another spreadsheet. When price and hours live in different files, someone has to cross-reference by hand every month.
• Not logging what isn't billable. Without that number there's no utilization rate and no real margin.
• Raising prices without a date. Changing the hourly rate without an effective date alters the past and messes up what was already billed.
• Showing cost to people who shouldn't see it. Cost is largely salary. Control who sees billing rates, who sees cost and who can change them.

How to roll out time tracking without the team complaining

The biggest obstacle to timesheets isn't technical: it's getting the team to log. Few people like recording hours, and the habit only sticks when the effort is small and the benefit shows. Five decisions help.

1. Explain what it's for. Say the record is for billing correctly, estimating better and distributing workload, not for measuring who works the most. Show the first report to the team and use what it revealed.
2. Log on the task itself. The closer to the work, the lower the cost. If the person has to open another system or another spreadsheet, logging gets delayed and turns into reconstructing from memory.
3. Define the granularity. 15-minute entries are overkill for most; whole-day entries hide what matters. Half an hour or an hour is usually a good floor.
4. Create a short ritual. Ten minutes at the end of the day or week, always at the same time. Monday morning is too late to remember Thursday.
5. Follow up on the ritual lightly. A report showing who logged little during the week, before Friday turns into Monday, lets you remind people without embarrassing them.

What if the contract is fixed-scope?

Many people think only those who bill by the hour need to log hours. It's the opposite: those who set a fixed price for the scope are the ones who most need to know how much the project consumed, because the loss falls on the company. In that case, the timesheet stops being a basis for billing and becomes a learning tool: after three or four projects, you know what it really costs to deliver each type of service and start quoting with data, not hope.

What to do with the first reading

After a month of tracking, look at three things. First, the percentage of billable hours: if it's much lower than the hourly price assumes, the problem is in the amount of internal work or in sales. Second, the lowest-margin projects: see whether the problem is a low price, scope that grew or rework. Third, the tasks that took more than double the estimate: that's the list that teaches the most when quoting the next project.

Spreadsheet or tool

A spreadsheet is a good start. With two or three people and few clients, a tab with date, person, project, hours and note does the job, and you can sum by project with a pivot table. There's a ready-made template at project hours spreadsheet, with a filled-in example.

The limit comes when three symptoms appear: someone has to export, paste and check every month; the hourly rate varies by client and type of work; and the client questions a line and nobody can prove where it came from. At that point, the spreadsheet costs more than the tool. The post how to bill by the hour without a spreadsheet details that tipping point.

How to do it in Tasskee

In Tasskee, hours are logged on the task itself, and everything that comes after flows from that record. The cycle has four steps: log, price, close and collect or pay.

• Log: each person enters hours on the task, with a note on what they did. The My hours screen shows only the person's own hours, with no rates at all. Logging hours and My hours are on the Start plan.
• Price: there's a billing rate table, by project and task type, and another for the rate paid per person. The most specific rule applies, with an effective date and a preview of the effect before saving. A bug can be "do not bill," due to warranty.
• Analyze: the analysis groups hours by up to three levels (project, workstream, collaborator, type, sprint, task) and shows hours, amount to bill, cost or margin. Each number opens the hours that make it up. There's also a comparison of points with hours.
• Close the client: the To bill screen shows what was done and not yet billed, and generates the closing up to a cutoff date, in PDF or CSV, with the invoice number recorded. Tasskee doesn't issue the invoice: it stores the number of the one you issued. What was closed gets locked.
• Pay those paid by the hour: the To pay screen generates the statement per person, with a receipt, and the person sees what they're owed in My statements, never the client's rate.
• Permissions: seeing the billing rate, seeing the cost, setting rates and closing are separate permissions in the profile.

The analysis, rates, To bill and To pay are on the Pro and Max plans. The reports complement the picture with other project dashboards.