Here's a number worth sitting with; project managers in professional services lose up to 31% of billable time. Professional services firms average just 68.9% billable utilization according to SPI Research's 2025 Professional Services Maturity Benchmark, well below the 75% optimal threshold. That means nearly a third of potential billable time disappears every single day. Not because your team isn't working hard enough, but because those 15-minute client calls, quick email responses, and "just checking in" moments slip through the cracks.

If you're managing projects at an accounting firm, law practice, or consulting agency, you already know the frustration. Your team logs 50+ hours a week, but when it comes time to bill, the numbers don't add up. The culprit? Time that gets worked but never recorded.

This is why time tracking matters more for professional services project managers than almost any other role. Your job isn't just keeping projects on schedule, it's protecting the revenue your firm actually earns.

Why Professional Services Project Managers Need Time Tracking

Time tracking advice for project managers in professional services needs to be different from generic productivity tips. Why? Because your time isn't just about personal efficiency. Every hour your team works is directly tied to revenue, client billing, and the health of your practice.

When a project manager at a tech startup loses 30 minutes, it's inefficient. When a project manager at an accounting firm loses 30 minutes of unbilled partner time across a team of five people every single day, that adds up to 12.5 hours per week, or roughly 650 hours per year. At a typical professional services billing rate of $175 per hour, that's over $113,000 in lost annual revenue. Suddenly we're talking about real money.

The data backs this up: research published in Harvard Business Review, based on an AffinityLive study, found that moving from weekly timesheet updates to daily tracking could recover $52,000 per professional, per year in billable time. This isn't about micromanaging your team. It's about capturing the value of work you're already doing.

The Real Cost of Poor Time Tracking

Here's the uncomfortable reality for professional services firms: your primary product is time. Unlike a manufacturer that can count inventory or a retailer tracking units sold, your revenue lives and dies by how accurately you capture billable hours.

The numbers are sobering. According to Accelo's research on time tracking, 69% of employees admit they don't track their time accurately. Meanwhile, QuickBooks Time data shows that 80% of employee timesheets have to be corrected due to errors. For some businesses, more than 30% of billable time is lost due to poor tracking practices.

The problem compounds across three areas:

• Unbilled hours: Time worked but never recorded because someone was "too busy" to log it
• Underestimated projects: Scope creep eating into profitability because the original time estimates were based on guesswork rather than data
• Write-offs: Hours that get recorded but written off at billing time because you can't justify them to the client

When your project team has accurate, real-time visibility into where time goes, these leaks shrink dramatically.

Key Metrics Every Project Manager Should Track

Effective project managers in professional services don't just track time, they track the right metrics that drive profitability. Here are the numbers that matter:

Utilization Rate

Utilization rate measures how much of your team's available time goes to billable work. According to SPI Research's 2025 benchmark, the industry standard target is 75% utilization, though actual rates have fallen to 68.9% across professional services organizations worldwide.

To calculate it: divide billable hours by total available hours. If your senior accountant works 40 hours but only bills 28 of them, their utilization rate is 70%.

Why it matters for project managers: low utilization often signals either too much admin work, poor project scoping, or work falling through the cracks. Tracking this by team member and by project helps you spot problems before they become patterns.

Realization Rate

Realization rate tells you how much of the time you bill actually gets paid. You might log 100 hours on a project, but if the client negotiates down or you write off hours, your realization rate suffers.

Clio's 2024 Legal Trends Report data for mid-sized law firms shows average realization rates of 83%, meaning 17% of billable hours never make it onto client invoices.

For project managers, tracking realization by project type and client helps identify where estimates need adjusting and which clients consistently require write-offs.

Project Profitability

This combines time, billing rates, and costs to show whether a project actually made money. A project that came in "on time" but required twice the estimated hours at a fixed fee? That's a profitability problem hiding behind a schedule success.

With accurate time data organized by project, you can spot these issues in real-time rather than discovering them at project close.

Time Tracking by Profession

Time tracking looks different depending on your specific practice area. Here's how professional services project managers can tailor their approach:

For Law Firm Project Managers

Legal work demands precise time documentation; it's not just good practice, it's often required for client billing disputes and potential audits. Most law firms use 6-minute (0.1 hour) billing increments as standard practice.

The challenge is stark: according to Clio's Legal Trends Report, lawyers bill just 2.6 hours (about 33%) of an 8-hour workday on average. That's a massive gap between time worked and time captured.

Key considerations for legal project management:

• Matter-based tracking: Every minute needs to tie to a specific client matter, not just a general client
• Detailed descriptions: Vague entries like "legal research" won't survive client scrutiny; specific task descriptions are essential
• Contemporaneous recording: Time recorded at the end of the day captures significantly less than real-time tracking

Law firm project managers benefit from time tracking tools that allow quick matter assignment and detailed activity descriptions without slowing down billable work.

For Accounting Firm Project Managers

Accounting work cycles between extremes - steady advisory work punctuated by intense deadline periods. Project managers need time tracking that flexes with these rhythms.

According to the 2025 Rosenberg MAP Survey, accounting firm utilization rates range from 54.1% to 57.4% depending on firm size, with billing rates continuing to rise an average of 6.1% year-over-year.

Key considerations for accounting project management:

• Engagement-level tracking: Time should roll up to specific engagements (audits, tax returns, advisory projects) for accurate engagement profitability
• Busy season capacity planning: Historical time data helps project managers plan staffing and set realistic client expectations
• Multiple client juggling: Your team members often work across 10+ clients in a single day; easy client switching is essential

Tools that integrate directly with accounting software like Xero or QuickBooks eliminate double-entry and keep time data flowing into billing automatically.

For Consulting Agency Project Managers

Consulting projects often start with defined scopes that evolve as client needs become clearer. This makes scope creep the consulting project manager's constant battle.

The data is concerning: according to a 2023 PMI study, 52% of projects experience scope creep, leading to an average budget overrun of 27%. Gartner research quantifies the average financial damage from scope creep at 25-40% of the original project budget.

Key considerations for consulting project management:

• Phase-based tracking: Breaking projects into phases lets you compare actual time against estimates before scope creep becomes a profit drain
• Retainer management: For ongoing advisory relationships, tracking time against monthly retainers prevents uncomfortable conversations about going over hours
• Client profitability analysis: Some clients demand more attention than their contracts justify; time data reveals which relationships need renegotiation

Project managers at consulting firms benefit from budget tracking tools that show real-time progress against project estimates.

What Good Time Tracking Looks Like

Not all time tracking approaches are equal. The difference between a system your team actually uses and one they resent comes down to a few key principles:

Make It Fast

If it takes more than 30 seconds to log an entry, your team will find workarounds; sticky notes, spreadsheets, or just forgetting. Every extra second spent logging time is a second not doing billable work.

This means single-click client assignment, pre-configured project and task categories, and a Timer that runs in the background while your team focuses on actual work. When tracking is fast, compliance goes up dramatically.

Keep It Contextual

The end of the day is too late. By 6 PM, your senior associate has forgotten half of what they worked on, and their time entries become vague summaries that clients question and you end up writing off.

Research shows the accuracy difference is dramatic: according to AffinityLive data via ClockIn Portal, employees who track time daily achieve 66% accuracy, while those who wait until the end of the week drop to just 47% accuracy.

Contextual time tracking happens in the moment. A timer that starts when they open a client file, quick entries when they finish a call, notes captured while the work is fresh. This is where mobile access becomes essential; if your team can't log time from their phone between meetings, you're losing billable hours.

Connect It to Billing

Time tracking data that lives in a separate system from your billing creates manual work and errors. When your team logs a Time Entry, it should flow automatically into your invoicing process; correct client codes, appropriate billing rates, detailed descriptions ready to go.

MinuteDock's integrations with accounting platforms make this connection automatic. Time logged during the day becomes an invoice with a few clicks, not a reconciliation project at month-end.

Implementing Time Tracking on Your Projects

If you're rolling out time tracking to a team that's used to estimating their hours at week's end, expect some pushback. Here's how to make the transition smoother:

Start with the Why

Your team needs to understand this isn't about surveillance, it's about capturing revenue they've already earned. Show them the math: the AffinityLive/HBR research found that moving from weekly to daily time tracking could recover $52,000 per professional annually in billable time.

If a consultant bills $175 per hour and captures just one extra billable hour per day through better tracking, that's over $43,000 additional annual revenue. Part of that flows to their bonuses, raises, and the firm's ability to invest in better tools and working conditions.

Set Clear Expectations

Vague instructions lead to vague compliance. Be specific:

• When should time be logged? (Contemporaneously, at least twice daily, or by end of day?)
• What level of description detail is expected? (Matter + activity, or just client?)
• How should non-billable time be categorized?
• What happens when someone forgets?

Having these answers documented prevents the "but I didn't know" conversations that derail adoption.

Make It the Easiest Option

If logging time in your system requires opening a separate application, remembering login credentials, and navigating multiple screens, your team will find workarounds (sticky notes, spreadsheets, or just forgetting).

Choose a tool that meets your team where they work - browser-based access, mobile apps, and ideally a persistent timer that stays visible while they work on other things.

Lead by Example

If project managers and partners don't track their own time diligently, the team notices. Your compliance sets the cultural tone. When leadership logs time consistently and visibly, it signals that this matters.

Using Time Data for Better Project Decisions

Once you're capturing accurate time data, the real value comes from using it to make smarter project decisions:

Improve Future Estimates

Every project becomes a data point for the next one. If your team consistently takes 40% longer on certain project types than your estimates predict, you either need to adjust estimates or investigate why.

MinuteDock's reporting tools let you compare estimated versus actual time by project type, client, and team member, revealing where your assumptions need updating.

Spot Problems Early

A project that's consuming hours faster than expected is a warning sign. With real-time time tracking, you can identify this at week two instead of discovering it at project close. That's the difference between adjusting scope or staffing proactively and explaining a budget overrun after the fact.

Optimize Team Allocation

Time data reveals which team members work best on which types of projects. Maybe your junior staff takes twice as long on complex research but handles routine compliance faster than anyone. Good team time tracking lets you match people to projects where they perform best.

Protect Your Margins

Some clients just take more time than they should. They call more often, request more revisions, and need more hand-holding. Without time data, you're running on gut feel. With it, you can see exactly which relationships are profitable and which need a pricing conversation.

Frequently Asked Questions

What's the best way to track billable hours across multiple projects?

Use a time tracking tool with quick client/project switching, persistent background timers, mobile apps, and billing integration. Establish clear project codes so team time data can be filtered and reported accurately.

How do project managers calculate utilization rate?

Utilization rate equals billable hours divided by total available hours. If a team member has 40 available hours and bills 32, their utilization is 80%. According to SPI Research, top firms target 75% utilization, though actual industry averages hover around 69%.

What time tracking practices help prevent scope creep?

Define clear project phases with time estimates for each. Track actual time against estimates in real-time - when a phase consumes more hours than expected, address it immediately by adjusting scope, renegotiating, or allocating additional resources. MinuteDock's budget tracking provides visual progress indicators that make overruns easy to spot.

What billing increments should professional services firms use?

Law firms traditionally use 6-minute (0.1 hour) increments, while accounting and consulting firms often use 15-minute increments. The key is consistency; whatever increment you choose, ensure your entire team uses the same standard so time data can be meaningfully compared.

How do I get my team to actually track their time?

Focus on three factors: make it fast (under 30 seconds per entry), make it relevant (show how it affects revenue and compensation), and make it easy (tools that work on any device without complicated logins). Research from AffinityLive found that 40% of employees never track time accurately, so addressing friction points is essential.

Getting Started

Time tracking isn't the most exciting part of project management in professional services. But it might be the most valuable.

When you capture time accurately, you protect revenue that's already been earned. You make better project estimates. You identify which clients are profitable and which are draining resources. You give your team credit for the work they're actually doing.

MinuteDock is built specifically for professional services firms; accountants, bookkeepers, lawyers, and consultants who need time tracking that's fast, accurate, and connects directly to billing.

Start a free trial and see how much billable time you've been missing.