Time tracking for agencies: capture every billable hour
Published
Short answer
Agencies lose billable hours mostly because time is logged late, to the wrong project, or not at all. The fix is to make logging a daily habit that takes under a minute, let projects come ready-made from the signed contract, and have a fixed weekly check that the week is complete.
Why hours go missing
Nobody at an agency skips logging time on purpose. Hours disappear in the everyday:
- Time is logged on Friday. By then nobody remembers what Tuesday went to, so what gets logged is a guess.
- The project doesn't exist. The client said yes, but nobody has created the project yet, so time lands on "Internal" or nowhere.
- Small things aren't logged. A quick call, a fast fix, an email to the client. Each is small, together often several hours a week.
- Nobody checks. A missing week goes unnoticed until it's time to invoice.
If each person in a team of eight loses three billable hours a week, that's over a thousand hours a year.
Six habits that work
1. Log daily, not weekly
A minute at the end of the day gives truer numbers than fifteen minutes on Friday afternoon. Make it so simple it doesn't feel like a task: one row per project, the hours, maybe a short note.
2. Offer a timer, don't require one
Some people work best with a stopwatch running. Others just want to enter hours at the end of the day. Give the team both, and don't demand minute precision where it isn't needed.
3. Let the contract create the project
The most common gap is between "yes" and "the project exists". When a signed contract automatically becomes a project with client, dates and team, there's somewhere to log time from day one.
4. Separate billable from internal
Not all work is billed, but all of it should be logged. Mark time as billable or not, and you see both what you can invoice and how much goes to internal work and sales.
5. Close the week
Take five minutes every Monday morning to look over last week. Who's missing time? Which projects took more than planned? A week-old mistake is much easier to fix than a month-old one.
6. Show the team why
People log better when they see what the hours are for: projects that stay on budget, the next proposal priced right, and nobody working for free because an estimate quietly blew up.
A small daily habit, a useful weekly check
- Each day
Capture the work
Log the project, hours and whether they are billable.
- Every Monday
Close last week
Find missing time and projects that ran over the plan.
- Next estimate
Use what you learned
Let actual hours inform the next price and plan.
What a time entry should hold
| Field | Why |
|---|---|
| Date | When the work happened |
| Project | Which client and contract the time belongs to |
| Task | What the time went to, useful for the next estimate |
| Hours | Half or quarter hours are fine |
| Billable | Whether to invoice it |
| Note | Short, so the client understands the invoice |
How Pledge does it
In Pledge, each person logs time in a simple weekly sheet, by day and hours, or with a timer running in the background. Signed contracts become projects with budget, dates and team, so there's always a place to log. Billable hours are valued at each person's rate, and reports show hours and amounts per project, client and person. You can also log time by asking your agent, in Claude, ChatGPT, Codex or Cursor. Time tracking is an optional module next to contracts.
Questions
- What share of agency hours should be billable?
- Many agencies aim for 70 to 80 percent of available time to be billable for people who deliver client work. Leads and sales naturally sit lower. See the article on utilization rate.
- Should we track time on fixed-price projects?
- Yes. You don't invoice the hours, but they show whether the price was right and make the next quote for similar work more accurate.
- How detailed should time tracking be?
- Detailed enough for the client to understand the invoice and for you to estimate the next project. Project, task and a short note is enough for most agencies.
Try Pledge
Contracts, time, plans and leads for small agencies, with an MCP server for Claude and ChatGPT. Pledge is in private beta: leave your email and we will send an invite.