When I worked with clients on a time and materials basis, I hated logging hours. I hated having the stop watch’s tick tock over me, being forced to account for every increment of time. Or, as it often happened, trying to remember after the fact where the hours went. I never met another developer who liked it either.
So, when 37signals launched the 37express idea, I thought about how cool it was (this was before I joined the company). Turning consulting into a product and charging a fixed price for it. No time-tracking, no tick tock, just clear expectations of what the client was going to get. It really opened my eyes to “you can refuse to do the shit you don’t want to do” way of running a business.
Other judo solutions to avoid time-tracking I’ve seen from consultants have been simply day or, preferably, week rates. You have my attention for this amount of time. Whatever we get done, we get done. I’m not going to break it down into 15-minute increments. Love it.
Similarly, I have almost equal wrath for the expense report. I’ve always felt that if you hire and pay me a good wage, why on earth would you want to always be checking in on me, forcing me to justify a $200 software purchase, or a plane ticket to a conference, or whatever else I might need to do my job well. Keeping paper receipts around and dutifully marking them down. Fuck that.
Now if you have multiple, concurrent clients, and you’re making them pay for your individual expenses, fine. You’re going to have to assign who paid for what steaks and who paid for what strippers.
But the legitimate moaning I’m hearing from people over expenses reports is when they’re being forced to do them purely for internal bookkeeping. This seems like a complete relic from the days when people would pay businesses expenses in cash. Nowadays your credit card company keeps all this on file. What was paid, who it was paid to, who charged it, even categorized. All the data is there. Asking people to fill that in again by hand just seems insulting.
Optimizing your business for happiness is about a lot of things, but taking out all the needless administrative minutiae seems like one of the easiest. Why aren’t you?
Adam
on 24 Jan 12Simply buying what you need to get your job done is a great idea that seems difficult for a lot of company managers to wrap their head around. How do more “traditionally run” companies get behind this?
Kamil Kukura
on 24 Jan 12Is there more info about 37express idea? The page http://37signals.com/express doesn’t exists.
Ben Garvey
on 24 Jan 12For reference, here are the IRS rules on expense reports: http://www.irs.gov/publications/p463/ch05.html
If you have an employer paid card, and the business purpose of the expense is obvious, you have a lot of freedom as long as you can automatically build a timely report via the credit card bill or some service that connects to it.
If you need to get reimbursed by the employer, then you and your employer are required to detail the expenses.
DHH
on 24 Jan 12One way to deal with the need for receipts is to adopt a 99% rule with a shared email address just for that purpose. So we have an internal receipts account that everyone can just forward the invoice for a flight, hotel, computer, book, software, whatever to. That captures 99% of all our expenses.
For the remaining 1%, like lunch or a cookie at the airport, we just say fuck it. If that should ever become a problem, the cost of dealing with it then will be much less than the cost of dealing with all the hassle of manual expense reporting up front.
Cost and risk of running a business focused on cutting out the bullshit.
DHH
on 24 Jan 12Ben, I find the reimbursement schemes disgusting too. Why the hell should employees be forced to float expenses incurred on behalf of a business? Give them a business card and be done with it.
James MacLeod
on 24 Jan 12The 37express idea sounds great, but I don’t see how it negates the need for time tracking. All you are doing is changing the unit of measurement. I presume you still have to say “Project x will take y weeks to complete and therefore cost $z” So you still need to track your time, unless I have missed something.
Chad Pytel
on 24 Jan 12Despite the fact that the credit card companies keep all this on file, the advice I’ve gotten from our accountants is that if we’re not cataloging the receipts and the purpose of expenses ourselves, this will be an issue if the tax man ever comes knocking. Additionally, you have to be concerned when it comes to determining whether sales tax was paid on items.
So we still give everyone their own credit card, and we don’t do expense reports, but we do have people forward their receipts to an online service which the accountant can access.
Agrajag
on 24 Jan 12One company I worked for had a “expense-allowance” for everyone. Something like $2000/year. If it fits in this, and you consider it useful to do your job, just buy it, don’t ask anyone, just get it done.
Worked fine. I think it happened once that some guy abused the priviledge, but the time and hassle saved, and the effect on morale for the good workers, more than outweighed this.
It does not make sense to have an argument with a $100K/year developer over whether or not he “needs” a $100 mouse to replace his 2-year-old $50 mouse. (I’ve seen it happen, the argument certainly cost more than the mouse would’ve.)
Gareth
on 24 Jan 12In the UK at least, expenses can come under different tax policies and you have to have a ‘backup’ of any records :/
DHH
on 24 Jan 12James, the 37express project was “1 page redesigned in 1 week for $2500”. No need for tracking any time.
Chad, we detailed in the comment above, we too forward electronic receipts to a shared email account that an accountant can use for backup in the 99% case. If it’s an issue with the remaining 1%, we’ll happily deal with whatever penalties that may come from that.
Joseph Le Brech
on 24 Jan 12TL;DR – Agreed
Charging for time makes agencies quote on jobs they know are going to incur extra “could you just”’s and “how difficult would it be to” tasks and the project then snowballs tenfold in terms of hours.
This just attracts crappy jobs where clients confuse man hours for real time and then hold out on payment.
If the first attempt at re-skinning a site for example takes 10 hours for example, why then still charge per hour once the experience needed to do it means you only need the one hour.
The first client didn’t bitch about the price, so that’s the price that service costs not the time incurred.
The time then saved by repeating a well oiled process can be spent making other time consuming tasks easier without having to wait for a client to be knocking on the door.
Free time shouldn’t be such a taboo in a company, if someone has nothing to do they shouldn’t be afraid to tell their boss so as to start a ‘tooling’ session or research. I’d even go as far as having a hat developers could wear to say “I’m busy doing something that could be useful down the line” this way the boss can have a healthy interest in what the developers are doing, rather than be so anal about the use of time.
The best managers are the ones that have a daily rapport with his developers without it looking like he’s doing a daily inspection.
That kind of interaction can only start when everything is going well as employees need to be relaxed and have a good relationship with the boss.
When the boss becomes anal about the minutes and hours then the developer won’t give any free time back, won’t create the next cool time saving utility. Because why bother right if using inefficient tools makes the developer look like he’s working.
Oliver Roup
on 24 Jan 12Once upon a time I worked for a company that put out RFPs for a multi-year project and involved teams flying in about 5 times over several years and all the requisite airfare, hotel and other expenses that entailed. The idea of writing policies on reimbursable costs sounded like a headache and actually checking receipts sounded like a nightmare (including the potential for adversarial relationships with the team). Instead we just added 8% to the RFP amount to cover those expenses and said spend it how you like – stay at the Hilton or add it to the project budget, your choice. Low and behold, teams were doubling up on hotel rooms and finding the cheapest possible flights and I never needed to check a single receipt.
andrew347
on 24 Jan 12Personally I think it makes sense only if the relationship with a client who does not care about the price of the project.
Sheldon Hearn
on 24 Jan 12If your credit card company is giving your finance people enough to account your expenses tax-effectively, that’s awesome and unusual and you should give them props here.
If not, someone has to indicate what the expenses were for. Hence the administrative overhead.
DHH
on 24 Jan 12Sheldon, it’s pretty easy. Here’s our format (feel free to copy):
Any meal was in relation to traveling for business or talking about business. Flights/hotels were either for a company meet up or a conference. Everything else (software, hardware, paper) was to perform the job they were hired for.Voilá!
Joe Fusco
on 24 Jan 12The larger a company becomes (and that phrase alone may be all that’s necessary to utter), administrative minutiae becomes an entrenched special interest.
It represents people’s livelihoods, satisfies others’ need for control and accomplishment. It is a substitute for trust, or the need to connect with your fellow human beings with whom you work. It is not uprooted easily.
Like anything else, you have to shoot for “just enough.”
DHH
on 24 Jan 12Joe, absolutely. It’s like a job’s program for idle hands. The amount of waste that’s accumulated due to these antiquated procedures is truly saddening.
Arnþór Snær
on 24 Jan 12Filling that in by hand creates an awareness of the expenses that the credit company report can not. I think it’s not all about a company’s internal bookkeeping but rather about an employee’s internal bookkeeping. Reflection and thoughtfulness goes out the window when you optimize for speed.
DHH
on 24 Jan 12Arnþór, we have not seen that at any time in the 6 or 7 years we’ve been running this process. But yeah, this is a recipe for waste if your employees are just out to fleece the company.
Chris Sherlock
on 24 Jan 12Agree with you about timesheets. But… receipts are often needed for tax purposes. A necessary evil I’m afraid.
Michael
on 24 Jan 12We just have everyone photograph their receipts and e-mail them to Shoeboxed or forward e-receipts. No messing around, but we have the records in an incontrovertible way. I think it’s a good solution.
Etrain
on 24 Jan 12Fully agree with the “cut the bullshit” philosophy. Unfortunately, investors, clients, and the IRS need to keep tabs on that stuff.
An idea mentioned above is an “internal” account to forward all receipts. I suggest people take it a step further and try expensify. It’s cheap, does a great job, and has me doing expense reports in 10 minutes once a month instead of 3 hours once a quarter. It keeps track of all my credit card receipts, allows me to take pictures of the paper ones and upload them form my phone, and has room to setup policies.
I have no affiliation with expensify other than as a happy customer.
Joe
on 24 Jan 12One word – Sarbox.
It has executives running scared that they will be the next ones showing up in front of congress or going to jail for failing to have appropriate controls in place.
Daniel Von Fange
on 24 Jan 12I’ve automated all of my time tracking with textmate.
Pressing F13 anywhere on my computer drops me into the current week’s time tracking document.
Command-shift-D inserts a new time tracking line with timestamp. A textmate snippet makes it so I only have to enter the first letter of the customer name, and press tab. Optionally I can type the first letters of the project name, which autocompletes from the rest of the document.
When I’m done, Command-shift-D again records my clock out, totals up the time in minutes and also converts it to dollars.
When the week is over, I hit Command-option-ctrl-shift-t, which totals up everything by customer, also broken down into projects, and pops up a report in an HTML window.
I’ve been using this totally text based system for five or six years now. I switch between projects about 15 times a day.
Ryan
on 24 Jan 12God damn it, David, I’m so sick of your arrogance. I hate keeping receipts too, but there’s a good reason your company requires you to keep them, which you’d know if you’d ever read a basic book on business taxes: Receipts are required by the IRS. Credit card statements are insufficient in an audit! Your deduction will get disallowed, or rather your employer’s deduction will be disallowed, which is why they are so uptight about “internal bookkeeping.”
You are trying to rant against “administrative minutiae” but really you’re revealing yourself as a reckless wannabe corporate cowboy. Do some research.
Stefan
on 24 Jan 12@Ryan: If this is currently true, then it’s still a giant dumbass waste of time, and the laws need to change. You didn’t state such, so I’m assuming you’re not a lawyer.
Kevin
on 24 Jan 12Etrain pointed out Expensify- I’d totally recommend that too. Of course, I work there, so I’m a little biased.
10 seconds spiel: - We can pull your expenses from most banks. - Take a photo of your cash receipts from our mobile app. We can pull the information off of those images for you. - Direct deposit reimbursement through us if you want.
darose
on 24 Jan 12FYI – our startup switched to using Expensify a while back, and it’s taken a lot of the pain out of expense reports for us. They have an Android app (maybe iPhone too?) that lets you snap a photo of your receipt, and then transmits it up to their web site. Makes “scanning” your receipts, and filling out the expense form much less painful.
For the record, I have no affiliation with Expensify – just a happy user.
joe
on 24 Jan 12@Stefan says “the laws need to change”.
Funny how the pendulum swings. After companies like Enron and others engage in unchecked fraud, the populace cries out “who was watching those guys” and are surprised to hear the answer to be “no one, really”. Now a company with controls in place is seen as unnecessarily burdensome. You can’t have it both ways.
Duff
on 24 Jan 12Setting aside the IRS issues, companies do this because people have a tendency to spend other people’s money like water and a few will end up stealing from you.
Maybe I work with a bunch of weasels, but I have seen my share of people with champagne tastes on the road, folks filling the car with company gas, etc. It happens.
What I do think is nonsense are arbitrary and capricious rules. I travelled for work frequently and live in the city. Because the train station and airport is less than 37 (yes, 37) miles from my home, my cab fare or parking is not reimbursable. But some maniac who commutes 75 miles gets breakfast and mileage.
Just keep it simple and say “spend up to $xx for a day trip and $yy for an overnight”
DHH
on 24 Jan 12Duff, sorry to hear that you have to work with dishonest people. The paper trail is still there whether you fill out expense reports or not. If you suspect that someone is dishonest, you could investigate it and, if found to be true, fire them. It would be a very cheap way to get rid of dishonest employees if all it cost was a little extra gas money and champagne until it was discovered.
Parand
on 24 Jan 12Shameless plug: instead of using a shared email address use a modern tool like Xpenser so you can forward it email receipts and it’ll do intelligent things like extract the actual receipt out of the email, canonicalize it to a printable format, include it in your expense report (if you do expense reports), etc.
MattO
on 24 Jan 12So I started keeping track of the time I spent on personal projects a while back and noticed some things right away.
Even though I wasn’t billing for any of my time and there was no one else waiting for these projects to be completed, there was a strong sense of that someone was looking over my shoulder
There was also a strong sense of wanting the numbers to agree with my internal initial ideas of how long things should take. Again, even without any other actors to influence me but myself, there was a strong pull in favor of pretty numbers. My first iterations of time tracking methods turned out to be really counter-productive. I started this effort to better understand how I work, but the effort itself was changing how I worked.
I made my own tracking client in an effort help with some of these issues. Long story short I was able to achieve a stop watch like effect, but hide all of the data away for more of a post-mortem analysis. It helped, but there is still a feeling (not as strong as that first iteration) of being watched.
I couldn’t image the social pressures involved if any of this information was linked to money, or available to a boss(who have their own set of internal reasons to make the numbers look good). I just wanted to see how long it took me to do things so I could better estimate sprints. It turned out to be a lot of work for insight that I always view with at least some amount of skepticism
Henric Trotzig
on 24 Jan 12David, I’m having a great time reading through your well written post. I’ve been having endless discussions with project managers trying to cut down on all the administration that often comes with running projects.
I especially find the part about expense reports interesting. I see so many people blindly giving in to the fear of the IRS without even needing to (as some of the commenters do too). We currently do expense reports manually and I usually spend about a couple of hours copying and stapling paper receipts on a piece of paper after every conference trip. Waste.
Reading through the comments I especially find Daniel Von Fange’s interesting. I always though time reporting tools where science fiction. And 15 projects? Do you ever get things done? And how about incubation time? Good ideas don’t always come consciously.
David Barrett
on 24 Jan 12I agree hour tracking isn’t a good way to alleviate distrust that people are fudging hours—if you don’t trust that they’re working, why trust the hours they log? But I’m curious if you’re open to any other reasons why time tracking might be helpful as a way to improve total productivity.
For example, in most fields the first step to improving something it to quantify it. Naturally the ideal would be to quantify and maximize productive output. But I think the general conclusion is that’s impossible (the number of lines of code written doesn’t really mean anything).
The “next best” might be to measure and optimize the time you actually spend working, tracking the number of productive hours you put in as a proxy for total productive output. Everybody will define “productive hour” differently so it’s not really possible to compare two people with this method. But you can compare your present self to your past self, and thus measure (or at least estimate) change in productivity over time.
Obviously there’s more to life than being productive. And nobody can be productive 100% of the time. (And even if you could be, you probably wouldn’t want to work 100% of the time.) But all things being equal, the more productive hours you can get in while maintaining the work/life balance of your choice, the better.
Granted, this technique won’t make your individual productive hours more productive. But it can help identify the very large gap between time actually being productive and on task, and time spent actually not working and having fun. So long as your meeting your personal needs, your life might be generally improved by converting some not-fun-but-not-productive hours (eg, watching reruns, random web browsing, writing this diatribe) into productive hours on task.
Anyway, I’ve been doing this for a long time, and I feel it’s the single most powerful tool I’ve had for becoming more productive. Not for working more hours (in fact, quite the opposite)—but for getting more out of the hours I work.
I’m guessing you wouldn’t resist others using this technique; to each his own. But I’m curious what you think about this technique for yourself, as a way to measure and improve your productivity over time?
Recognizing you feel it’s insulting for others to demand you quantify work for their unclear reasons, what do you think of quantifying them as a tool for improving your own productivity?
dew
on 24 Jan 12ede
Christopher Hawkins
on 24 Jan 12I have a question – if you weren’t tracking your time against these $2500 redesign projects, how did you know if any particular project was profitable or not?
Ronaldo
on 25 Jan 12David, How long it took to move from a project based company to living exclusively from SaaS? Thanks, Ronaldo
RJ
on 26 Jan 12Is there a reason that companies don’t just give every employee a daily allowance (for travel)? You’re allowed to spend up to $400/day. Spend less, and you can pocket the extra. Spend more, and it comes from your own pocket.
Let employees choose whether or not to stay at the fancy hotel, or the cheap motel. Let them choose whether to rent a car or take a taxi. Let them choose to fly 1st class or back in coach. It makes accounting simpler and gives employees the freedom to use the airline they want, the hotel they want, the rental car they want, etc.
Are there legal issues that get in the way?
Ben Unsworth
on 27 Jan 12We have a time tracking philosophy that you guys may find interesting…
We have a jquery mobile website with a list of our open projects (pulled from our custom project tracking app)...
Each open project has a check box next to it.
The rule is to simply check off the jobs that you touched each day.
We divide a persons 8 hour day by the number of checks and record that number to each of those jobs (eg. I checked off 4 projects so each of those 4 projects get “2 hours” booked to them).
The end result with all employees doing this is an averaged out approximation of the time spent on a project. It’s not technically accurate but it’s “pretty close” in the sense that 1 hour of programming on one day is not equal to another hour of programming on another day. (eg. spend 3 days on a logic defying bug vs 1 hour in a moment of genius and resulting judo chop).
Programmers don’t have to waste brain power (and emotional energy) trying to remember what they did (or what they think they should have done).
I don’t care about the difference of a few hours here and there… or even days. I do care when we’re 7 weeks out of wack.
We call is Fuzzy Time.
You heard it here first.
:)
Steve R.
on 27 Jan 12I work for a consultancy. I also hate time tracking – not only for the reasons given above, but because when you charge for asses in seats billing hours, there is no incentive for efficiency, and it allows the booking manager to be lazy as hell when writing the Statement of Work. If I know I am going to be held to a certain specific set of deliverables, it focuses my and my teams work. If I have some fluffernutter SOW foisted on me by a higher-up and an eight-week time frame to deliver, I also have the added headache of ‘managing client expectations’ – essentially making sure that what we deliver is considered meeting their expectations, rather than that it necessarily does what is was supposed to do. Why can’t I take an extra week if I need it? Or (perish the thought) deliver early?
More specific is better, and an hour is only a meaningful measure of progress if you consider your life essentially gap-filler until death.
This discussion is closed.