Everything we do takes time – home projects, volunteering, leisure, and of course, work. Understanding how time is spent provides insightful data that helps us harness time and leverage one of our most precious and limited resources.
Take that weekend home project, for example; it seemed like it should have only taken 8 hours to retile the bathroom floor – just in time for tomorrow night’s dinner party. After 6 trips to Home Depot for a tile saw, more tiles, more grout (and don’t forget the tiling instruction manual that was forgotten on the first trip) — 18 hours was invested and the dinner party was – well, it had to be postponed [maybe next weekend]. Could it be that the job really needed 2 or 3 more people to handle all the logistics? Or maybe the job needed a tiling contractor who already had tools (and instructions). Evaluating time spent will, no doubt, be key in making the next home project decision. But let’s not stop at home projects – let’s look at our organizations.
Why It’s Important.
Targeted and Impactful Decision-Making for Your Organization.
Time estimates developed during year-end budget planning are sometimes used for decision-making; but like that home tiling project, estimates can lead to miscalculation in the allocation of staff resources.
- How many and which employees are needed to successfully complete upcoming initiatives?
- What mix should be employee vs. consultant?
- Is it more cost-effective to outsource to a third party?
- How much time should be devoted to fundraising or business development?
Visibility to True Project Costs and Staffing Needs. Labor costs are a primary cost for many nonprofits, and those labor costs, likewise, are a primary cost of organization projects. How do you know if you’re under or over budget or if you’re finishing on schedule unless you know who spends what amount of time on the project?
Reduction of Overhead and/or Indirect Costs. For those organizations reporting to funders based on estimated hours – you should know that the difference between estimated and actual staff time ends up in overhead/indirect costs. Since many funders either won’t cover indirect costs or will only cover a minimal amount, it’s vital to know how to staff projects to minimize indirect costs.
Accountability to Donors. Many nonprofits are funded by contributions and private grants, and accountability is key. Individuals and organizations who donate need to see that their money and resources are being used efficiently and effectively.
How to Do It.
Time-tracking empowers the right people to work on the right projects for the right amount of time.
Time-tracking paints a clear picture of employee capacity along with an initiative’s true cost. It provides insights to where resources may be over or under-allocated and enables dynamic proposal submissions to funders.
In today’s digital environment, a number of cloud-based time-tracking systems exist, making timesheet utilization a simple and streamlined process. At Tate & Tryon – our Outsourced Accounting practice utilizes Nexonia as a powerful and dynamic timesheet tool for clients. If you’d like more information on implementing and leveraging a time-tracking system for your nonprofit, don’t hesitate to contact us.
Harness Time in your organization through the utilization of timesheets, and be empowered to focus more and more on Strategy, Vision, and Growth.
By Roberto Terrell, CPA