Ever finish a busy week feeling flat-out exhausted… then realise you’re not entirely sure where all your billable time went?
You’re not alone. Time leakage — lost billable hours caused by untracked, forgotten, or delayed time entries — is a well-documented issue in professional services. An Accelo white paper estimates that more than one-third of billable revenue can be lost due to untracked work such as meetings, emails, and delayed timesheets (Accelo, Time Is Money).
Similarly, professional services research suggests that significant chunks of billable time may never be invoiced when teams rely on manual or delayed time tracking. While methodologies vary, the conclusion is consistent: untracked time quietly erodes revenue.
That’s why smart time tracking isn’t about micromanaging - it’s about protecting your time, your income, and your sanity. Below are ten practical time tracking best practices designed specifically for accountants, bookkeepers, consultants, and lawyers who bill by the hour (or should).
Why Time Tracking Matters for Professional Services
In professional services, time isn’t just money, it’s the foundation of billing accuracy, profitability reporting, and client trust.
Billable time refers to work that can be charged to a client, while non-billable time includes administration, business development, training, and compliance. Tracking both matters, because if you don’t measure where time goes, you can’t manage it.
For law firms, Clio’s Legal Trends Report defines three core performance metrics: utilization rate (how much of the workday is spent on billable work), realization rate (how much billable work gets invoiced), and collection rate (how much invoiced work gets paid). These benchmarks are widely used to evaluate firm performance (Clio, Legal Trends Report).
Accounting firms face similar challenges. Results from the AICPA/CPA.com Management of an Accounting Practice (MAP) Survey, reported by the Journal of Accountancy, show that while realization rates reached 99%, utilization rates declined to 59.6%, suggesting that firms are billing most recorded time, but may still be under-capturing it (Journal of Accountancy).
1. Track Time as You Work (Not After the Fact)
The most reliable time data is captured in real time.
When professionals rely on memory at the end of the day, or worse, the end of the week, billable hours slip through the cracks. This is especially common in accounting and legal work, where tasks are constantly interrupted by emails, client calls, and quick admin requests.
Consider a lawyer switching between drafting a contract, reviewing discovery, and taking a client call. Or a bookkeeper pulled away mid-reconciliation to answer payroll questions. Real-time tracking ensures those short bursts of billable work are captured accurately.
2. Separate Billable and Non-Billable Time Clearly
Not all work should be billed, but all work should be tracked.
This isn’t just about tidy reporting. It’s how firms understand capacity, pricing pressure, and where work may need to be streamlined or delegated.
Clio’s analysis of non-billable time shows that 48% of non-billable hours are spent on administrative tasks, while 33% go toward business development activities (Clio, Legal Trends Report). While the exact mix differs for accountants and consultants, non-billable time is consistently significant.
Best practice is to use clear categories such as:
- billable client work
- internal administration
- business development
- compliance and training
3. Use Project- and Client-Based Time Tracking
Professional services don’t operate in one big time bucket — everything revolves around clients, engagements, or matters.
Tracking time by client or project makes invoices easier to justify and profitability easier to analyse. It also helps identify scope creep before it quietly turns into unpaid work.
Clio reports that law firm realization rates increased from 77% in 2016 to 86% in recent years, meaning firms now invoice a much higher proportion of the work they perform (Clio, Legal Trends Report). That improvement didn’t come from working longer hours, it came from better time capture and billing workflows.
4. Standardise Time Entry Descriptions
Vague time entries create confusion, for you and your clients.
Entries like “admin work” or “client tasks” make invoices harder to defend and reports harder to use. Clear, consistent descriptions hold up far better if a client questions an invoice or if records are reviewed for compliance.
Examples include:
- “Quarterly BAS preparation – Client A”
- “ATO correspondence review – Client B”
- “Matter X: contract revisions and client instructions call”
Setting a simple house style for descriptions keeps reporting clean and consistent across teams.
5. Set Clear Billing Rules and Rates
Professional services billing structures are rarely simple — and that’s okay, as long as time tracking supports them.
Whether you bill hourly, use blended rates, charge retainers, or offer fixed-fee services, time data still plays a role:
- hourly billing relies directly on tracked time
- fixed fees depend on time data to assess profitability
- retainers benefit from visibility into time burn and scope
Clio also notes that unrealised billable time can be driven by write-downs, discounts, and unclear engagement terms (Clio, Legal Trends Report). Clear agreements combined with accurate time tracking reduce invoice surprises.
6. Review Time Data Weekly (Not Monthly)
Waiting until month-end to review time data is often too late.
A short weekly review helps catch missing entries, unclear descriptions, and scope creep while details are still fresh. This is particularly useful for accountants during deadline-heavy periods and lawyers managing multiple active matters.
Weekly reviews can highlight:
- missing or unusually low billable time
- work drifting outside agreed scope
- clients requiring more support than pricing allows
7. Use Time Tracking Data to Improve Profitability
Time tracking isn’t just for billing; it’s a profitability tool.
Consistent data allows firms to answer important questions:
- which services are most profitable?
- which clients require disproportionate non-billable support?
- where can workflows be standardised or automated?
Consider a hypothetical bookkeeping firm that discovers payroll support consistently takes longer than expected due to late client changes. With time data, the firm can adjust pricing, set clearer cutoffs, or redesign the process.
8. Make Time Tracking a Team Habit (Not a Chore)
Adoption matters more than perfection.
If time tracking feels punitive, people avoid it. Keeping the process lightweight and explaining why it matters improves consistency.
Practical ways to boost adoption include:
- simple entry categories
- standardised descriptions
- a “same day or next morning” rule
- friendly reminders instead of policing
9. Use Time Data to Reduce Client Disputes
Clear time records build trust.
Detailed, matter-level time entries make it easier to explain invoices and resolve questions before they become disputes. This is especially important in legal and consulting engagements where scope can evolve quickly.
Time data also helps prevent disputes by making scope creep visible early, before invoices are issued.
10. Choose Time Tracking Software Built for Professional Services
Not all time tracking tools are created equal.
Professional services firms benefit from software that supports:
- billable and non-billable time tracking
- client or matter-based entries
- clean, exportable reports
- smooth billing workflows
Broader industry research reinforces the push toward reducing admin. In the Thomson Reuters Future of Professionals Report, surveyed professionals predicted that automation and AI tools could free up several hours per week per professional as adoption matures.
Frequently Asked Questions About Time Tracking for Professional Services
How do accountants track billable hours accurately?
Most firms succeed by tracking time as work happens, linking entries to specific clients or jobs, and using consistent task descriptions.
Do lawyers need to track non-billable time?
Yes. Non-billable time affects capacity, staffing, and profitability. Clio’s research highlights how significant administrative and business development time can be (Clio, Legal Trends Report).
Is time tracking useful for fixed-fee work?
Absolutely. Time data helps validate pricing assumptions and refine future fixed-fee engagements.
Final Thoughts: Turn Time Into Insight (and Revenue)
Time tracking doesn’t have to be tedious or intrusive. When done well, it gives accountants, bookkeepers, consultants, and lawyers the clarity they need to bill confidently, price services accurately, and protect profitability.
If you’re ready to capture every billable hour and gain clearer insight into where your time really goes, consider using a time tracking tool built for professional services.
