We use the term time velocity to describe the timeliness of information. Do you have timekeeping data available in real-time or does it have to be submitted, calculated and analyzed manually?
If time is recorded as things happen, on the spot, you have real-time information. Real-time information can considerably enhance your firm’s operations:
- Forecasting: When you have favorable time velocity and access to real-time information, finance and the executive committee can run reports and are able to do a forecast analysis of what your billings are going to be at the end of the month. The quality of this information is higher when you have access to real-time information, as opposed to information that is a week (or more) old. This is of particular importance when you need to rely on up-to-date information to make financial decisions for your firm. If, for example, your time entry is one to two weeks late, or even four weeks late, those forecasts are useless.
- Reporting: When data is collected in real-time, you have access to a quick snapshot of where the firm stands on key performance indicators at the click of a mouse. Real-time reporting allows you to make faster and accurate decisions based on the state of affairs today, without the data lag that exists through conventional time entry methods.
- Retainer Management: Law firms work on a retainer model for a reason - in order to ensure payment for services. As many cases exceed the initial retainer, additional funds may be required in order to complete the work associated with a particular matter. That’s where tracking time against this retainer amount becomes critically important. In many larger firms, these cases require a team effort. Several team members are assigned to the case. Without real-time access to billables associated with this case (because not all of the team members are entering their time contemporaneously), it is easy for the firm to exceed the retainer without prior warning. Without the ability to predict this, the firm then runs a risk that the client will not pay the new balance associated with exceeding the retainer, therefore defeating the entire purpose of the retainer. Real-time timekeeping records on the other hand, can help you keep tabs on the hours billed against a retainer, allowing you to more effectively manage your billable hours.
The more timely the information, the better, when it comes to maximizing efficiency and managing your firm’s operations for profitability and growth. Do you have access to real-time timekeeping and billing information? How has it impacted your firm? Share your experience in the comments section below.