Time Tracking Tips for Interior Designers
Whether you price your interior design services hourly or based on a flat fee, I am a strong proponent of tracking your time. And if you don't track your hours or find yourself saying “you aren’t good” at tracking your hours, then you cannot, under any circumstances, bill hourly for your interior design services.
You may have heard the saying, “In God we trust, all others bring data,” and I’m here to tell you: the data is in the numbers, and the numbers don’t lie.
As a business owner, it is your job to know your numbers, and part of that is knowing how long things take.
Tracking your time and reviewing the numbers will empower you to make critical decisions for the long-term success of your company.
Here are a few benefits of tracking your hours for interior designers:
Tracking your hours gives you insight into how long things actually take so you can properly schedule your project start dates so you aren’t overloaded with too much work at one time.
Tracking your hours gives you confidence in letting prospects know that the price is the price because you know it will take 100 hours. If they want you to do the work for less money, then you’ll have to remove parts of the scope — easy enough.
You'll be able to determine if your services, projects, and company are profitable. Tip: these are three different data points to review, and you should run numbers after every project, monthly, and quarterly to review profitability.
You'll be able to evaluate when you need to raise your price (or decrease your scope, shorten your timeline, fix your process, bring in help, etc.).
You can…wait for it…schedule a vacation for yourself because you know what your workload looks like now and projecting into the future.
Once hours are tracked, invoicing clients for hourly services will be seamless and take only a few seconds — not a nightmare process that leaves you guessing and digging through 37 notebooks and then shaving five hours off the top because you can’t remember what you did that day.
You'll get insight into when a team member may need additional training (example: you know [this thing] takes you 1 hour to complete, so why is it taking Susie Q 12 hours?)
You can see where you spend your time — are you buried in admin tasks that a part-time virtual assistant could handle at a fraction of your price, or are you spending your time on high-level, high-value work that will have the greatest impact on the growth of your company?
Tracking your hours doesn't have to be difficult. In fact, if you're using a product management software like Houzz Pro, Design Files, Mydoma, Studio Designer, etc., there are native time trackers within these software programs (a few of them even have apps for tracking time, so the minute you get in your car, you hit the tracker in the app and the tracking begins).
If you aren't using a product management software (HINT: interior designers need to be!!), you can also use a general time tracking software (Toggl is what our team uses, and we love it).
When tracking your hours for client billing, you'll want to track by client (obviously), then by project/room, and then by type of work. Some interior designers we’ve worked with really break this down to the nitty gritty; however, I recommend keeping your time billing categories simple and in line with the design process so you don’t have to spend a lot of time figuring out “Which category does this go into?" if you’re billing clients hourly.
Read this post to see what those six categories are specific to client billing.
Another good rule of thumb is to require your team to log all their time in your product management software so you or your payroll person can easily run reports and remit numbers for payroll.
In addition to the client billing categories, you’ll also want to keep tabs on the time you spend marketing, in meetings, etc. Again, we all know there are days when we’re like, “What did I do today? I was head down all day, but not sure what I actually got done.” Days like this are key to seeing where your time is spent and showing ways to be more productive or profitable with your time.
If you're an hourly designer and you’re considering making the switch to flat fee, be sure to check out the Pricing & Proposals Workshop in The Workroom to learn what designers across the US and Canada are charging, how to set minimums, how to mark up your products, how to time your payment schedules, and so much more.
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