Discussion Thread

  • 1.  How Exact is Time = Money?

    Posted 11-15-2022 06:12 PM
    How does your firm track the hours spent on a project? You'll tell me that depends on whether a company is hourly or salary.
    I understand that every firm has its own method for tracking hours spent on a project but I have several rhetorical questions to hopefully start a conversation about the billing practice.

    Who do you bill your 10-minute coffee break too? Do you even bill for a coffee break? What about answering emails in the morning? Do you switch your timesheet for every answered email? Does your company have 15-minute or 30-minute intervals for billing? What if you only worked 10 minutes or 25 minutes on a project? Do you round up and take the extra time for yourself?

    How diligent are engineers expected to be in the accuracy of their timesheets?

    While yes, time is money, and nobody (I hope) is trying to immorally or unethically calculate their times, how exact is one expected to be?

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    Daniel Bressler EIT, A.M.ASCE
    Structural Engineer
    Brooklyn NY
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  • 2.  RE: How Exact is Time = Money?

    Posted 11-16-2022 10:16 AM
    Our tool of choice is LiquidPlanner. There is a timer tracker in there to use.

    GENERALLY... Our engineers include *short* breaks on the project. Once the timer has started, you try to keep on it as best as possible. When done with working on that project or if you know you're going to take a *long* break, you can pause the timer and accept it for later or use it as it is. We are then expected to round to the nearest half an hour, but never less than a half an hour.

    So we likely overestimate hours slightly, but by timing it out as exact as possible and then rounding to a half an hour, you find it probably comes out fairly accurate on the whole. You can easily gain/loose 15 minutes in that rounding on every project which is about the time it takes to answer a few emails, go to the bathroom, and top off the cup of coffee.

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    Craig Smallegan P.E., M.ASCE
    Senior Structural Engineer
    Leesburg IN
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  • 3.  RE: How Exact is Time = Money?

    Posted 11-16-2022 11:05 AM
    Hourly billing in consulting.......that was a whole new world to me when I graduated.  Growing up, my father worked for the local newspaper (on the advertising/business side) and was salaried, so to me 'salaried' meant you came in, did your work, and got a check every two weeks for 1/26 of your annual salary.  And I think that's how it is for engineers working in most government agencies and for manufacturers.

    So 'timesheets' in the orientation for my first job was a bit of a surprise.  FWIW, they were paper at the time, so that sort of dates me.  But it seemed like essentially a paper timeclock - instead of punching in and punching out you just entered your hours manually, but it seemed basically like an hourly timeclock in a factory or on a construction site.

    As I spent time in the business, I found it was a necessary evil for accounting for consulting work.  The jobs are priced based primarily on the cost of labor to complete the job.  Tracking hours is necessary for management to see if a job is being completed for more or less time (and money) than they estimated or are charging for it.  It can identify if a project is taking more time than anticipated, and they can step in and make corrections to get it back on track so they don't lose money on the job.

    It also ties in with how a project is quoted to a client - 'Lump Sum' (you guarantee the customer a complete project for a certain price - if it costs you less you still get the whole amount and make a bigger profit, or vice versa if it costs you more), or "Time and Materials' (where you're basically billing the client for every hour spent like hourly work).

    To your question about the accuracy of tracking hours:  Say you spent the whole day working on a single job.  You would charge your project for 8 hours (assuming you were in the office or at home working for 8 hours, exclusive of a lunch break).  Taking a quick bathroom break or running to the kitchen for a cup of coffee is part of normal life so you wouldn't deduct that time out.  Ditto for answering a quick email.  It gets messier if you're working on multiple projects every day (which is pretty common).  You still roll in bathroom and coffee breaks to the jobs you're billing to.  It helps if you can split your work up into tasks that are at least close to even 15, 30, or 60 minute blocks that align with your company's policy on the smallest interval used for timekeeping.  If you're basically working continuous on a project for 85-90% of the time you're charging (ie. like no more than a 5 minute break in a half hour) I wouldn't lose sleep over it. I would not bother tracking bathroom and coffee breaks and emails (unless a specific email is an issue taking 10-15 miniutes or longer).

    Companies typically also have 'overhead' or 'general' charge numbers for tasks that aren't billable to a job.  Use of those is generally discouraged if there's any billable work.  Companies can have goals of 90-95% billable for regular production workers to 75% (give or take) for people who do a lot of marketing.  I don't recall the exact number, but it typically takes multiple billable hours to make up for the use of 1 unbillable hour.  Companies have varying policies on this.  Some will have employees charge this number not only for time when they have no project work, but also for time spent on internal department meetings or other company meetings.  Others will expect employees to 'spread' these hours over jobs they work on during the day as they consider these meetings to be a cost of doing business and directly related to work in general.  You don't charge coffee and bathroom breaks to this number!

    If you work on government jobs, there are specific rules for timekeeping that your company should make you aware of.

    Personally....while I understand the necessity of timekeeping, it's one of the least appealing aspects of the consulting line of work, particularly if you work on multiple smaller projects or tasks throughout the day.  It can lead to challenges when certain jobs have tight budgets and other ones don't.

    There's some other interesting side topics of the hourly billing aspect of consulting......differing policies.  Some companies pay overtime - time and a half for workers under a certain salary, 'straight time' for workers in a higher salary band, or no overtime ('it's part of the job' ) for higher salary bands, or even for all salary bands.  Overtime pay seems more prevalent in companies that primarily do T&M work.  The 'it's part of the job' policy seems more prevalent in companies that do Lump Sum work (no overtime means more profit).  Some companies have an 'hours bank' for overtime hours worked.  Instead of paying employees extra in their paycheck for OT hours worked, they give them PTO or vacation credit for the extra time worked.  This seems to make a lot of sense - the big challenge to consulting is balancing the peaks and valleys of the workload - this encourages or incentivizes employees to put in extra time during the peak times when there's too much work to do and not enough time, and allows them to take paid time off when the workload gets a little 'thin'.

    One last topic.....what does 'salaried' mean?  To most people it means a guaranteed annual salary.  During some of the past recessions it was not uncommon for some consulting firms - when work dropped off dramatically - to 'go down to 32 hours', basically having people work only 4 days (or 3 in some cases) and correspondingly only paying them 80% (or 60%) of their normal salary.  It was a tradeoff - you're still getting paid the same rate on a daily basis for your work on an hourly rate, but you're essentially an hourly employee, not salaried in the true sense.  In some cases - depending on state and local laws - this may have been on shaky legal ground.  What made it more palatable for some is that the 'shared sacrifice' allowed the entire staff to keep their jobs (albeit at a reduced salary) in lieu of some of their peers being laid off.  But this could lead to a slippery slope of changing the profession from salaried professionals to hourly or contract employees (which may be appealing to some, but not others).


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    Greg Thein, PE
    Cleveland, OH
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  • 4.  RE: How Exact is Time = Money?

    Posted 11-16-2022 01:19 PM
    Let's work backwards from the end product.  What is the value of a house?  The hours of the carpenter and the materials?  In time, these values diminish greatly when compared with location and condition.  Now is the carpenter driving back and forth to the hardware store 3 times because he forgot one more piece significant?  Or is his craftsmanship and consideration for the environment produces a house that survives multiple generations more significant?  If the latter is valued upfront, the unnecessary trips to the hardware store can be overlooked.

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    Chad Morrison P.E., F.ASCE
    Professional Engineer
    Greenville RI
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  • 5.  RE: How Exact is Time = Money?

    Posted 11-17-2022 10:03 AM
    Our company tracks time to the half hour, but we will be moving to 15 minute increments next year. When working on a project or two, it's no big deal to keep track. What gets messy is when you have 5+ projects you touch on a daily basis. How do you accurately track your time when answering each email took around 3.5 minutes, phone calls were 2 to 10 minutes, and in between you were answering in-office project questions, getting in and out of drawings, etc.
    I do my best to accurately estimate the time spent per project, but the more projects you have, the more difficult it is. Even if I tried using timers, I don't think I would remember to start and stop each one every time I hop in and out of that job.

    When I was an intern, I had a notepad where I wrote my time in, start and stop times for each project, and my time out. Then, at the end of each day, I tallied it up and put it on my timesheet on our database. If I tried to do that now, it would waste a lot of time writing things down every time I switched projects. I give a good faith effort to be accurate with my times, but some days it is a struggle to know what to put on my sheet.

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    Heidi C. Wallace, P.E., M.ASCE
    Tulsa, OK
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  • 6.  RE: How Exact is Time = Money?

    Posted 11-19-2022 12:22 PM
    Q. "How does your firm track the hours spent on a project?"

    A. Back in my "Good old days," we each had a billable time percentage assigned.

    70% for most of us engineers was to be billed weekly to our assigned projects.
    The balance covered health care, college tuition, and the like.

    And most definitely . . .COFFEE!

    Cheers,
    Bill


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    William M. Hayden Jr., Ph.D., P.E., CMQ/OE, F.ASCE
    Buffalo, N.Y.

    "It is never too late to be what you might have been." -- George Eliot 1819 - 1880
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