You're working long hours. Your calendar is packed with client meetings, tax preparation, and those "quick questions" that somehow eat up half your morning. But when you sit down to bill at the end of the week, the numbers don't quite add up to what you actually did.
You're not imagining it. A survey by Tribes.AI found that missing or inaccurate timesheets cost businesses $63,807 per employee per year. For accounting and consulting firms specifically, managers estimated that roughly 20% of billable hours go unrecorded. That's one in every five hours of work you're doing—but not getting paid for.
Time tracking for accountants isn't just a nice-to-have admin task. It's the difference between running a profitable practice and wondering why the revenue doesn't match the effort.
The Real Cost of Not Tracking Your Time
When it comes to accounting firm profitability, two metrics matter more than almost anything else: your utilization rate and your realization rate.
Your utilization rate measures how much of your available time goes toward billable work. According to Statista's analysis of professional services data, professional services firms worldwide averaged just 69% billable utilization in 2023.
Your realization rate measures what percentage of your billable work actually gets invoiced and paid. When your realization rate drops, you're essentially giving away work for free.
What causes these gaps? It's rarely laziness or incompetence. It's the small stuff that slips through; the 15-minute phone call you forgot to log, the email thread that took longer than expected, the "quick" client question that turned into an hour of research. That type of thing isn’t a rounding error. That's real money walking out the door.
How Time Tracking Transforms Your Accounting Practice
Capture Every Billable Hour
Every accounting firm has experienced this scenario: you spend 45 minutes answering a client's questions about their quarterly reports, and by the time you sit down to log it, it's become "about 20 minutes" on the invoice. Or it disappears entirely.
Accurate time tracking changes this pattern. When you track time as you work—rather than trying to reconstruct your week from memory—you capture the true picture of where your hours go. This includes the work that's easy to forget; quick emails, unexpected phone calls, and those "just one more question" conversations that add up fast.
Improve Your Realization Rate
Your realization rate answers a crucial question: of all the work you could bill for, how much do you actually collect?
Strong time tracking directly improves this number. When you have detailed records of exactly what work was performed and when, invoice disputes become rare. Clients can see precisely what they're paying for, which builds trust and reduces those uncomfortable "can you explain this charge?" conversations.
Think about it from your client's perspective. Would you rather receive an invoice that says "Professional services - 8 hours" or one that itemizes "Financial statement preparation (3.5 hours), tax planning consultation (2 hours), quarterly review meeting and follow-up correspondence (2.5 hours)"? The second invoice justifies itself.
Detailed billing doesn't just reduce disputes—it actually helps clients understand the value you provide, making them less likely to question fees in the first place.
Make Smarter Business Decisions
Here's where time tracking goes beyond billing. When you have solid data on how your firm spends its time, you can answer questions that directly impact profitability:
- Which clients are actually profitable? Sometimes your biggest client by revenue isn't your most profitable once you factor in how much hand-holding they require.
- Which services should you price differently? If your tax preparation work consistently takes 40% longer than you quote, that's important information.
- Where are your bottlenecks? Maybe certain team members are overloaded while others have capacity. Maybe specific types of work always run over estimates.
You can't fix what you can't see. Detailed reports transform scattered time entries into actionable insights about your practice.
Build Trust Through Transparent Billing
Nobody enjoys explaining an invoice to a skeptical client. But when you track time properly, those conversations become much easier, or disappear entirely.
Clients appreciate knowing exactly what they're paying for. Time tracking and billing that produces itemized invoices shows clients the work behind the numbers. You're not just sending a bill; you're providing a clear record of value delivered.
This transparency is particularly important for accountants, given that you're the ones helping clients understand where their money goes. It would be a bit awkward to be vague about your own billing, wouldn't it?
Streamline Your Admin Work
You didn't spend years earning your accounting qualifications so you could fight with spreadsheets and manually type up invoices!
Time tracking that integrates with your accounting software - whether that's Xero, QuickBooks, MYOB, or FreshBooks, means your billing process can flow automatically. Track time, review entries, generate invoice, sync to your accounting system. Done.
No re-keying data, no copy-paste errors, no wondering if you remembered to include everything. The goal is simple: spend less time on admin so you can spend more time on the skilled work your clients actually pay you for.
Managing Tax Season (and Other Busy Periods)
Every accountant knows the rhythm of the year. Tax season hits, and suddenly you're working long hours across dozens of client files, trying to keep everything straight while deadline pressure mounts.
Good time tracking becomes even more valuable during these periods. When you're juggling multiple urgent deadlines, it's easy to lose track of where time went. But that's also when accurate billing matters most—you're working hard, and you deserve to be compensated for it.
Time tracking also helps with capacity planning. If you have data from previous tax seasons showing how long different types of returns typically take, you can better manage client expectations, schedule work appropriately, and avoid the panic of realizing you've overcommitted.
What Makes MinuteDock Different for Accounting Firms
Most time tracking tools try to be everything for everyone, and end up cluttered with options you'll never use while missing the specific things you actually need.
MinuteDock is built specifically for professional services firms like accounting practices, bookkeeping firms, and law offices. That focus means we've designed around how you actually work: multiple clients, billable hour targets, detailed reporting, and seamless integration with the accounting software you already use.
We're not trying to do project management, team messaging, and fifteen other things. We do time tracking and billing exceptionally well, keep things simple, and get out of your way so you can focus on serving your clients.
Frequently Asked Questions
How many hours should accountants aim to bill per year?
Billable hour targets vary by firm size, role, and business model. According to FreshBooks, accounting firms typically expect somewhere between 1,700 and 2,000 billable hours per year, though this varies significantly depending on your position and the type of work you do.
The more important question is often not "how many hours am I billing?" but "what's my realization rate on those hours?" Billing 40 hours that you only collect payment for 30 of isn't better than billing 30 hours you fully realize.
Should I track non-billable time too?
Absolutely. Tracking non-billable time; administrative work, internal meetings, professional development, gives you a complete picture of where your time goes. This helps identify if non-billable activities are eating into your capacity and whether there are tasks that could be delegated, automated, or eliminated.
It also provides valuable data for pricing. If you know a certain type of client requires significant non-billable support time, you can factor that into your engagement pricing.
What's a healthy realization rate for accounting firms?
According to the Rosenberg MAP Survey, smaller accounting firms typically achieve realization rates around 92.5%, while larger firms average around 86.2%. The CPA Journal notes that large firms (those with $10 million or more in client fees) averaged 85% realization according to AICPA National MAP Survey data.
If your realization rate is below these benchmarks, it's worth investigating why. Common causes include scope creep, poor time capture, clients disputing bills, or simply underpricing your services.
How do I get my team to actually track time consistently?
Consistency is the biggest challenge with time tracking, and it usually comes down to making it as easy as possible. Choose tools that integrate with how your team already works, set clear expectations about tracking (ideally as work happens, not at the end of the week), and lead by example.
Some firms find it helpful to tie time tracking to performance reviews or bonus structures, though the better approach is usually making it genuinely easy and showing team members how the data benefits them, like demonstrating that accurate tracking leads to better workload balancing and fairer compensation.
Ready to Track Your Time Properly?
If you're still reconstructing timesheets from memory every fortnight, you're almost certainly leaving money on the table. The good news is that fixing this doesn't require a massive overhaul of how you work, just better tools and habits.
MinuteDock is designed to make time tracking simple enough that you'll actually do it. Give it a try and see how much clearer your billing becomes.
