How We Scrapped Time Sheets

We all know tracking time is just the pits. That's why we did away with the whole practice and invented Profit App. But here, we progress from the why of the matter to the how, with one of our fiercest forces behind the movement, Michael Parler (Vice President at PRPL). He's answered a few of the most common questions we get when asked how to give time sheets the ol' bird, so take this wisdom and run.What percentage (ballpark) of your client base is made up of retainer clients?It’s a healthy mix. In 2013 we had a large amount of retainer- and marketing campaign-based clients (probably 60 / 40). In 2014, we had a lot of production work, instead (probably 75/25). There has been a trend with many of our clients who are insourcing a lot of the retainer services we’ve offered (paid search, SEO, social management), so we’ve been getting back into production work. Our projected path is pushing us away from “websites" and more into products, platforms, and web applications.How did you guys make the leap to scrapping time sheets?

"I thought he was crazy, but it was honestly very liberating."

Our CEO came in one day in 2010 and said “Enough is enough. No one is focused on creativity and innovation anymore. We are scrapping time sheets.” I thought he was crazy, but it was honestly very liberating. It’s true that if you do good work, the money and financial performance is the result.What type of planning or new processes were implemented?We experimented a lot with spreadsheets and Google Docs to still understand resource capacity, traffic, and how “billable” people are. That never really worked, so we built our own application to achieve our needs. It’s called Profit. Based on popular demand, we just released it for public beta last month, so feel free to check it out and sign up for a free account: www.profitapp.co.Do you think having more retainer-based clients (than project-to-project clients) makes it easier to follow a value-based system?Retainers are definitely tricky. I’m over-simplifying here, but for our retainer clients, we essentially either (a) charge a “day rate” or “week rate” for a guaranteed resource staffing plan (rather than an hourly rate) or (b) we operate off of “X Budget Per Month.” Based on the “value model," it’s on us to proactively plan the labor with the client each month and honestly say “we can do these X tasks for your $X budget this month.”Do you find that value-based billing v.s. time-based billing works more effectively depending on the type of clients you have?Absolutely. The reality is most clients either (a) understand agile processes and ongoing costs or (b) expect a fixed fee project cost. Given many fixed fee project costs, the way to manage profitability is by backing into ship dates. Once you ship the project, your team can move onto the next business venture. The trick is managing clients to the deliverables, receivables, and timeline.What advice do you have for other companies looking to nix time tracking?

"If there is a process or policy that’s not working for you or your organization, the worst thing you can do is to keep it on life support."

Be adventurous and be brave. If there is a process or policy that’s not working for you or your organization, the worst thing you can do is to keep it on life support. Admittedly, sometimes making radical changes do not work. But you at least need to try and fix things. Your team will respect and appreciate that you are focused on improvements.Also, if you somehow have a client who is upset that you’re no longer billing for every hour, let me know! I’d love to work with them and rack up the clock.