Why do we think of lawyers as well off? It’s not just the high hourly rates, it is because they bill every hour and expense.
Fixed price work is often estimated based on Hours * Rates. If you go over the quoted hours on a few large projects by say 10% that could be 100% of your profit gone and result in having to work long hours!
So, what could you do to stop staff going over their allocated hours?
1. Budget each assigned person or team their own hours.
2. Display the hours remaining in their timesheet so it’s always visible.
3. Decrement the remaining hours as they enter time to ensure the remaining hours are always correct.
4. Tell your staff that, although there may be many reasons for needing for more time, there is no excuse not to tell you before they run out of time, and that may even be before they start. Explain that if you know early you can review ways to keep on track by maybe discussing scope or quality with the client or raising a variation.
But what if someone other than the assigned person does the work causing the remaining hours not to decrement? This is a real problem since reports will inaccurately show projects are over budget and staff will think they have more time…which they will use to perfect their work.
You could restrict your timesheet system so staff can only book time to work they are assigned but in practice this is dangerous since rushed staff may book time to other work.
A better solution is to allow unassigned staff to select someone who is assigned to enter time against so the total remaining hours are decremented. The cost rate should be of the person doing the work and ideally the charge rate is as well since would reflect the speed the work is done (although you may choose to use the charge rate of the assigned person).
If you can provide visibility of remaining hours, decrement the hours automatically, and allow unassigned staff to use the remaining hours of someone who is assigned, then you are far more likely to stay within budget, achieve that profit and be home each night for dinner!