Top 8 Billable Hours Tracker Solutions for Professional Service Agencies

For any client-facing business, one of the main questions is: How can I optimize my billable hours output?

When it comes to measuring the success of your workforce planning initiatives, every industry has its own standards. A good rule of thumb is to ensure a healthy balance between billable and non-billable hours. For professional service agencies, the recommended utilization rate ranges from 70 to 80%.

In order to manage these key agency insights, investing in the right billable hours tracker is crucial. But making the best choice can be hard. How comprehensive do you want the tool to be? Which additional features can help your agency succeed?

These are all questions that we’ll be addressing in our list of the top 8 billable hours tracker software solutions. Keep reading to find out their key features and browse what users think about each of the tools.

According to recent data, agencies report the following main challenges during their accounts payable process: 71% report inefficiency and manual data entry, 42% report lost or missing invoices, 37% report receiving invoices in paper format, and 29% report a high number of discrepancies (Endava).

As you can see, the list of potential stumbling blocks is considerable. Accounting software with time tracking features can help you address all of these challenges. For one, these tools use technology to help you accurately record time spent working on tasks. No more updating Excel sheets — let billable hours trackers do this job automatically. Most tools will also support the billing process from start to finish, from building your project budget to client invoicing.

What are some of the main benefits of switching from a manual to an automated process?

We’ll name three: increased accuracy, efficiency, and transparency. By relying less on managers and employees to keep hours accurate, you can both reduce human error and the time you spend on administrative tasks each week. This can be a significant perk for your agency, as certain research shows that 34% managers spend as much as 3-4 hours per day on administrative tasks (West Monroe).

Additionally, by providing project stakeholders with timely project data, you can increase trust and transparency, both essential for successful project outcomes. Therefore, tools that can provide real-time insights into key project metrics can significantly improve your client relationships.

Some of the main features to look for are:

Related: 10 Best PSA Software Solutions: The Essential List for Modern Enterprises

Without further ado, check out our list of the best project management tools, accounting software, billable time trackers, and agency tools currently available.

Productive is the all-in-one agency management software for agencies of all shapes and sizes. Productive is designed with a focus on supporting your financial management, so that you can plan and track your project progress with full control over your budgets.

In comparison to other similar tools on the market, Productive is a solution that aims to cover all your daily agency operations. This includes an integrated sales pipeline to support your sales processes, docs for project documentation, project and task management, capacity planning, budgeting and billing, and more.

Now, let’s explore some of Productive’s key features in more detail.

Productive’s simple, integrated time tracking solution is suitable both for teams new to the process, or those that are looking for a better way to manage how they’re currently tracking time.

With Productive’s Time Tracking, you get:

Related: 13 Best Agency Time Tracking Software in 2023

Productive’s Budgeting feature lets you build your budgets on your platform, no matter which pricing model you’re working with. Created fixed-price, hourly-priced, or mixed projects, run your retainers, or split up complex budgets into separate phases, all on one platform.

How does it work?

With Productive’s budgeting, you can also streamline your Billing and get easy-to-use job cost management with Purchase Orders. This means that you can generate your invoices directly from the platform while ensuring that they’re brand-compliant. For hourly-priced projects, you can also attach time sheets for clients to speed up the payment process. You can also control your external expenses, track payments to suppliers, and record paid and delivered amounts.

See more: Top 5 Business Budgeting Software Solutions for Agencies

With Productive’s Resource Planning, you can set up a highly reactive and adaptive resource plan. Easily schedule your resources, reallocate their hours, and duplicate and delete bookings. After managing your workforce planning, you can then check your budget burn until the project deadline. Then, by switching to the profitability chart, you can also check your profit margins.

At times, a project will go over budget, but it might still be profitable. Otherwise, the opposite may be true, and a well-performing project can be a drain on your agency’s resources. This is the type of insight that Productive can give you.

Thanks to placeholders, Productive also supports scenario planning. You can schedule projects with potential new hires in mind to gauge whether there’s a need to fill certain positions. Productive also supports utilization insights, so you can forecast your availability for certain periods and decide if you have the capacity to take on particular projects.

Learn more: Resource Planning Guide: How To Optimize Your Project Planning

Productive’s Project Management can effortlessly support your project progress and team collaboration, from project planning all the way to post-completion insights.

Some notable features include multiple views, including Kanban-style, Calendar, Gantt, and more. Additionally, you can stay up to date with your projects thanks to automatic notifications that can be customized for frequency and across multiple devices.

When it comes to task management, Productive offers a streamlined space for sharing progress, updating your status, mentioning teammates, setting deadlines, adding attachments, and more. You can also add clients to your projects free of charge. They can create new tasks, comment on existing ones, and otherwise collaborate with your project teams.

Additionally, you can even add them to your time and budgets, so they can get a direct look into project status and progress. This is how Productive provides more efficient communication and streamlines your end-to-end project management.

When it comes to Reporting, Productive offers more than 50 agency-focused templates that you can populate with agency-specific parameters thanks to custom fields. This includes reports such as Forecasted Unprofitable Budgets, Forecasted Utilisation, Profitability by Person, Unpaid Client Invoices, and much more. You can easily convert your data into visualizations, create and share reporting dashboards, as well as schedule specific reports onto your or any external email.

Additional features include: Sales, Docs.

Integrations include: Xero, QuickBooks, HubSpot, Breathe, Zapier, Slack, Jira, and more.

Productive offers a 14-day free trial, so you can see what the agency management software offers for yourself before committing to a paid plan.

Paymo is a tool designed to help professional services agencies from all industries manage their projects successfully. This includes architecture firms, consulting agencies, digital and creative agencies, and more. Paymo includes a suite of features, from project management to invoicing.

Key features:

Paymo can be a good option for agencies that are looking for a tool with basic management features. From workload capacity to profitability management, Paymo can help you get certain essential billable hours insights. However, users on G2 have reported that the platform could be more user-friendly as one of the main downsides. Additionally, project managers who are looking for more advanced features, such as profit and utilization forecasting, might want to consider a different solution.

ActiTIME is a tool that provides project time tracking for agencies of all sizes. The software is designed to support the tracking of billable and non-billable tasks and streamline billing processes.

Key features:

ActiTIME is a simple solution for managing your billable rates and time logs. It can be an especially suitable option for smaller agencies and startups due to its more affordable pricing. As for the downsides, users on Capterra state that the reporting and billing features are not as developed compared to similar solutions on the market. Therefore, users who want more advanced features might want to look for different time tracking software.

Hubstaff is a tool for managing employee hours and employee productivity tracking. Hubstaff also provides integrations with a variety of project management software apps and similar productivity-based tools.

Key features:

Hubstaff can be a suitable choice for agencies that are looking for time tracking software that includes some level of employee monitoring. However, numerous users have pointed out that the implementation of these features can be constraining and cause employee stress. For example, it’s difficult to get high rates of engagement due to the way activity is tracked. Additionally, it’s not the best choice for agencies that want to invest in integrated resource and financial management.

Related: 12 Best Resource Management Software Solutions

ClickTime is an online platform that helps agencies plan and account for their time, cost, and resources. Users praise ClickTime for being a simple way to manage employee time: “It has an easy to use, intuitive interface very similar to an old paper timesheet” (Source: G2).

Key features:

Users enjoy ClickTime as a fully functional option for streamlined time and resource management. When it comes to some issues, certain users believe that the tool can be a bit expensive for what it is. Even though the platform has a low learning curve according to reviews, some note that the user interface could be more interactive and attractive to eliminate user fatigue.

Harvest is a simple time tracking app that helps teams manage their time across multiple devices. It’s designed to support various industries, such as marketing agencies, consultancies, and software development companies.

Key features:

Users of Harvest enjoy this tool for tracking their billable and non-billable time, but at times remark that the reporting feature could be more extensive: “Sometimes, we run into limitations when we want to customize reports to fit our needs exactly” (Source: Capterra). Other users have noted that this limitation has caused them to outgrow Harvest after some time, which is a good thing to keep in mind.

Related: 11 Best Harvest Alternatives in 2023

Toggl Track is a simple and intuitive time tracking software for employee time management, billing and invoicing, and workload scheduling.

Key features:

Users enjoy Toggl Track as a simple tool to measure time spent on project tasks and generate basic reports. Some note that it can get confusing to use if you’re working in a multi-project environment, due to the way in which clients and projects are labeled. Therefore, it might be a better pick for agencies with simpler workflows and management needs.

Related: Resource Planning for Multiple Projects: Best Practices for Efficient Multi-Project Management

Clockify is a free time tracking software that is available for desktop, browser, and mobile. The tool also offers paid versions for advanced features, such as invoicing, scheduling, and expense tracking.

Key features:

Users recommend Clockify as a simple, standalone solution for basic time tracking. Agencies that are interested in a more robust solution that integrates multiple features in one platform might not find what they’re looking for here. Additionally, some reviewers mention that the user interface can look outdated in comparison to more modern solutions.

As it often is, the best way to manage and track your billable hours will often depend on your specific industry and agency circumstances. For example, agencies that work mostly with internal teams might take a more relaxed approach to their time tracking, with automatic and manual data input. Those who rely more on contractors might prefer to utilize productivity monitoring techniques, such as activity tracking.

However it is that you decide to manage your resources, if you want to make your processes more efficient and more accurate, using software is your best bet. As we’ve established before, you can use these tools to automate the tracking process, get key reports to drive agency improvements, and speed up your client invoicing.

Read the entire story: How Build in Amsterdam Gained Control Over Projects With Productive

After exploring some of the best billable hours trackers available, here’s our final piece of advice: whichever tool you decide to go with, make sure you consider its scalability. Even if you currently don’t need an advanced tool, considering a more extensive option can save you a lot of time and hassle in the future. Implementation and onboarding can be lengthy, so choosing a tool that can support your agency’s growth is always a smart choice.

Additionally, the perks of implementing a comprehensive solution can be significant. You can standardize your operations and simplify daily workflows, not the mention the money you’ll be saving on IT overhead.

Learn more about the benefits of all-in-one agency management software by booking a demo with Productive.

One way to track billable hours for free is to use spreadsheet-based software to log your hours manually, such as Excel. Otherwise, you can look for time tracking software with a free plan, such as Clockify or Harvest. Additionally, you can consider investing in comprehensive software such as Productive, which integrates time tracking with other essential agency management capabilities. This can help save you time and money in the long run.

Each time tracking tool will have a specific process for tracking billable time. We’ll use Productive, the all-in-one agency management tool, as an example of what this process may look like. First, you’ll need to set up your employee cost rates and budgets. Then, you’ll track time across the services you’re providing, either by using a timer or by inputting your time entries manually. Then, your time entries will be reviewed by the project or resourcing manager. Finally, billable hours will be invoiced to the client at the end of the billing cycle.

One of the popular apps currently available that can help you track billable hours is Productive. Productive is an all-in-one agency management software that lets you define your hourly rates, build your project budgets, and track billable and non-billable tasks. Productive can also streamline your client billing and invoicing, as well as deliver insights on profitability and utilization.

There are many types of software solutions that can help you with tracking billable hours, including accounting, time tracking, project management, and agency management software. Some examples of popular billable hours trackers are Productive, Paymo, and Toggl Track. You can also use our free billable hours calculator to get a rough idea.

One of the easiest ways to track billable hours is to use time tracking or project management software. These types of solutions automate the process with a built-in timer that records your time accurately. With tools such as Productive, you can also assign tasks to your time entries and manage your timesheets online.

Consultants usually track billable hours with the help of dedicated or generalized project management software for consultants. For consultants, billable activities might be research, meetings with clients, or even work-related traveling. Non-billable tasks include internal meetings or agency-related matters such as client prospecting. It’s important that consultants enter detailed notes for each time entry to support them during the billing and invoicing process.

Though standards might vary from business to business, in the professional services industry, a common standard for billable hours is to aim for a utilization rate of 70% to 80%. In short, this would mean that employees should be clocking in around 30 hours of billable time per week. However, this is not a number that is set in stone. In fact, it’s normal for your agency to experience periods of lower and higher utilization throughout the year, depending on various external and internal factors.

QuickBooks has a separate tracker that you can connect with QuickBooks Online for an additional monthly fee. Instead, you can also consider investing in a project management tool with time tracking that integrates with QuickBooks for invoicing. For example, you can track your time and build invoices in Productive, and then copy them into QuickBooks.

Find out more about Productive’s integrations here.

The amount of billable hours that are considered standard will usually vary from industry to industry. For example, law firms usually aim for 1700 and 2300 annual billable hours, which would result in about 35 to 40 billable hours per week. Other professional service agencies, such as creative agencies, usually have less stringent requirements. The recommended utilization rate for production-level staff is usually between 70% to 80%, which would amount to about 30h of billable hours per week.