{"id":297,"date":"2017-06-28T08:51:48","date_gmt":"2017-06-28T08:51:48","guid":{"rendered":"http:\/\/40.68.118.75\/?p=297"},"modified":"2017-06-28T08:52:16","modified_gmt":"2017-06-28T08:52:16","slug":"297","status":"publish","type":"post","link":"https:\/\/www.accu8payroll.com\/index.php\/2017\/06\/28\/297\/","title":{"rendered":"Don’t Wait Until the End of the Game to Start Keeping Score"},"content":{"rendered":"

[et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Text” _builder_version=”3.0.51″ background_layout=”light” text_orientation=”left” border_style=”solid”]<\/p>\n

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I used to work at a writing mill, churning out page after page of promotional material on technical subjects.\u00a0I was not, thank you very much, a \u201ctech writer.\u201d Business writers view tech writers as failed engineers or talentless hacks who are one economic downturn from working at Taco Bell. Tech writers, in turn, think\u00a0business writers to be\u00a0technological maladroits who could not pour water\u00a0out of a boot if the instructions were not written on the bottom.<\/p>\n

I was new to the job and eager to impress.\u00a0I was designing a training program,\u00a0and I asked the program managers how many hours had been billed to the project;\u00a0he looked at me blankly and shrugged. He didn\u2019t know.\u00a0Not to be dissuaded, I went to the CFO who told me, “We don\u2019t track that.\u201d\u00a0When I asked him how many hours they based the quote on, he was equally clueless.<\/p>\n

Ask me no questions.<\/h2>\n

So there I was working on a project without knowing how many total hours had been bid and how many of those had been used. Madness. By\u00a0now self-conscious because I believed my questions sounded more accusatory than inquisitive, I gently inquired how in the living Hell the company knew whether or not it was making a profit. I was informed with withering condescension\u00a0that we billed customers, and that was called gross revenue, and then we subtracted our costs, which revealed\u00a0our net profit. Madness; all around me, madness<\/em>.<\/p>\n

I grew to accept that\u00a0loosey-goosey accounting method that they don\u2019t teach you in accounting classes. There were no lofty terms like depreciation\u00a0and debits, and no such pesky acronyms as\u00a0FIFO and LIFO inventories. No, this was something easier and somehow more pure. Truthfully, it removed any and all accountability: I was absolutely at peace with it. Still,\u00a0this company did eventually collapse, largely because of its amateurish cash-flow system,\u00a0but I had abandoned ship long before.<\/p>\n

There can’t be two.<\/h2>\n

I had another job in a velvet sweatshop writing training.\u00a0I was sure the first company was an outlier: there couldn\u2019t be two<\/em>\u00a0companies that\u00a0didn\u2019t manage profit and labor on an individual basis.\u00a0I was wrong.<\/p>\n

I was again plunged headlong into a world of madness where nobody kept score until the game was over. This time the company only\u00a0tracked overhead, code for: You useless fool! You aren\u2019t working making money for the company.<\/em>\u00a0Here, to have over 10 percent overhead on your timesheet was to put a bullseye on your back, although\u00a0everyone quickly learned how to game that\u00a0system.<\/p>\n

If you are an entrepreneur —\u00a0whether you are a sole proprietor or the owner of a medium- to large-sized company, you must<\/em>\u00a0know how much each project is costing you relative to how much you are billing for it.\u00a0 This is easier than it seems, but there are some rules you should follow:<\/p>\n

Spell out exactly what is billable and what is not.<\/strong><\/h2>\n

In your quotes to prospective clients, detail what’s billable.\u00a0Is travel to and from the customer site billable? How about kickoff meetings? A clear understanding of exactly what constitutes billable activity is essential; what\u2019s more, it avoids disputes over billing.<\/p>\n

Share the quote with the team.<\/strong><\/h2>\n

Too many business owners are paranoid about their billing; in their minds, they\u00a0don\u2019t dare share that information with their employees.\u00a0They fear that if their employees knew the rate at which they were being billed to a client, they would demand a raise.\u00a0If you fear that, explain to your employees the concepts of burden rate (how much it costs a business owner to actually employ a worker) and profit (the reason you\u2019re in business).\u00a0Most people will get it, and the conversation will end well — except for ones where the employer is\u00a0actively ripping off everyone in the equation. (You know who you are. So, in that case, you might want to fix that first, you greedy, dishonest pig.)<\/p>\n

Don\u2019t schedule mandatory nonbillable meetings and events.<\/strong><\/h2>\n

Too many employers fill employees schdules with nonbillable meetings and then punish employees for being nonbillable. Now, assuming a 40-hour week (HA<\/em>! LOL … s<\/em>orry, I couldn\u2019t even type that with a straight face), an employer\u00a0scheduling\u00a0a daily, two-hour staff meeting\u00a0instantly\u00a0cuts\u00a0employees’ billable time by 20 percent. Think about that, but also know\u00a0I\u2019m being kind here.\u00a0I have worked for companies that\u00a0harp on people for the level of their overhead billing and yet\u00a0routinely schedule 20 hours of nonbillable activities (meetings, training, employee birthday parties, etc.). This practice puts the employee in an intolerable\u00a0dilemma: either he or she can cheat and bill the customer for that time, or the employee\u00a0can log an extra 20 hours or so of work outside the workweek to retain a high, useful billability rating.<\/p>\n

Keep good time sheets.<\/strong><\/h2>\n

Everyone hates doing timesheets.\u00a0Show me someone who enjoys doing timesheets and I will show you someone who probably eats food they find on the side walk (\u201cOooh, street pizza\u201d).\u00a0Good time keeping allows you to understand how much effort a project really takes;\u00a0it differentiates between people who are good at their work and those who aren\u2019t.<\/p>\n

Learn from you failures.<\/strong><\/h2>\n

Just because you lost money on a project doesn\u2019t mean you\u2019re workers failed to perform.\u00a0When you lose money on a project ask yourself why? Was it scope creep (where the project slowly grows but the price stays the same)? Was it poorly quoted? Did you miss listing key assumptions that affected your ability to bill the project more?\u00a0By knowing exactly why you lost (or for that matter, why made money), you can correct the error and do better next time.<\/p>\n

 <\/p>\n<\/div>\n

https:\/\/www.entrepreneur.com\/article\/284238<\/p>\n<\/div>\n

<\/section>\n

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I used to work at a writing mill, churning out page after page of promotional material on technical subjects.\u00a0I was not, thank you very much, a \u201ctech writer.\u201d Business writers view tech writers as failed engineers or talentless hacks who are one economic downturn from working at Taco Bell. 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