Top 12 ways to measure indirect time for project costing

Indirect time is a critical part of project costing. It is time that is not spent directly on client work but affects project costs and team productivity. Training, meetings, mentoring, and knowledge sharing are examples of indirect time. If firms do not measure this time accurately, it can cause problems with project budgets and profitability. According to studies, companies that track indirect time have 20% to 30% less project cost error. Effective measurement helps firms determine accurate labor costs and balance staff workloads.

Accurate records of indirect time make future planning easier. In this article, we will discuss 12 best practices that firms can use to improve project cost by accurately measuring training and meeting time. These practices are also relevant for large teams, remote teams, and hybrid setups. By implementing each method step by step, firms can avoid cost surprises related to indirect time.

1. Track Training Session

Training sessions play a huge role in team development, but they also generate indirect time. Firms should ensure that each training session is properly logged. Staff should know how to record the start and end times of training. Digital tools and time clock systems can also be used for training. Training records help firms determine how many hours staff have spent upgrading skills. These hours are included in project costs to calculate accurate labor costs. If training sessions are incomplete or undocumented, indirect time estimates become inaccurate.

Therefore, clear rules and automated tools for tracking training provide high value. Staff should be taught to maintain training logs, and the system should send automatic reminders to ensure that no sessions are missed. This step strengthens project cost forecasts and helps with future budget planning. Training tracking also helps firms assess staff performance and ROI.

2. Log meeting times

Meetings are a significant component of indirect time. Firms should log the start and end times of each meeting. Digital calendars and integrated project management tools help record meeting times. Staff should also note the purpose of the meeting and the participants. Project costs are accurate if the meeting data is clean and consistent. Capturing indirect time for meetings provides project managers with clarity about staff availability and workload. Frequent and unproductive meetings can lead to excessive indirect time, which can increase costs.

Firms can identify redundant sessions and improve productivity from meeting logs. Meeting logs can be combined with training and mentoring to calculate total staff indirect time. Providing staff with meeting log guides is helpful. Automated meeting capture systems make project costs predictable. This step is even more important with remote and distributed teams. Accurate meeting logs streamline resource allocation and budget planning.

3. Record the guidance time

Mentoring time indirectly contributes to staff development. Senior employees mentor junior staff, and this time is not directly involved in client work. Firms should track the start and end times of mentoring sessions. Mentorship logs are helpful in noting the names of the mentor and mentee. These records accurately account for indirect labor hours in project costs. If mentoring data is not clear, indirect time is underestimated. Staff should be taught to maintain mentorship logs and record time accurately.

Digital time tracking and project management tools can also be used for mentoring. These measures improve both staff accountability and skill development. Mentorship logs combine training and knowledge-sharing sessions to provide a complete picture of indirect time. Project managers can optimize team workload and costs by analyzing mentoring hours. Mentorship tracking is also of great value in large teams and is effective for remote employees.

4. Use Project Notice Time

Project notes and documents also create indirect time. Staff should log task updates, research findings, and action points in project notes. Firms should ensure that project notes are maintained with start and end times. Note that time capture accounts for indirect contributions to project costs. If document time is not tracked, staff efforts are underestimated. Digital tools automate notes and logs and improve accuracy.

It is helpful to clarify the rules for note entry for staff. This step also improves workflow transparency and accountability. Tracking notes helps project managers allocate time and assess staff productivity. Analyzing notes in indirect time tracking creates planning guides for future projects. This approach is also important for hybrid and remote teams.

5. Set research and development timelines

R&D time is a major contributor to indirect hours. Staff who work on research and prototypes are included in project costs even if they are not part of the client’s direct deliverables. Firms should log the start and end times of R&D sessions. This helps staff record the research topic and deliverable link. Automated time trackers and project management tools record R&D sessions. Accurate R&D logs help firms improve cost forecasting and labor allocation. If R&D time is not tracked, the project cost is incomplete.

Staff should be trained to maintain R&D session logs and record time accurately. These steps provide insight into future resource allocation and productivity. R&D logs, combined with training and indirect meeting times, provide a complete picture.

6. Capture client interaction time

Client interactions are a significant component of indirect time. This is spent on calls, emails, and virtual meetings. Staff should log the duration and type of each interaction. Accurate capture allows firms to include client engagement time in project costs. If interaction time is not tracked, labor costs are underestimated.

Digital tracking tools and CRM systems capture client interaction time. It is helpful for staff to maintain an interaction log and have clear rules. This step helps project managers analyze staff bandwidth and cost estimates. Tracking indirect time also provides client communication insights and improves project profitability.

7. Audit Documentation Time

Audit and compliance documentation also generate indirect time. Staff should document, prepare, and review time logs. Accurate audit time capture improves project cost accuracy. Reduced audit time can lead to reduced indirect costs. Firms are encouraged to use automated tools and trackers. It is important for staff to maintain audit logs and clear guidelines. This step helps with regulatory compliance and project transparency.

8. Track Monday Reviews

Peer review sessions generate indirect hours. Staff should accurately record the start and end times of the review. Peer review logs measure productivity and quality. Accurate tracking explains project cost and labor allocation. Lack of peer review logs can lead to wasted cost and effort. Automated time tracking tools capture peer reviews. It is helpful for staff to maintain peer review rules and logs. This step improves team accountability and workflow smoothness.

9. Log Breakout Sessions

Breakout sessions or small team discussions count as indirect time. Staff should record the start and end times of the session. Accurate logs include the correct contribution of labor to the project cost. If breakout session logs are missing, indirect time is underestimated. Firms log sessions using automated trackers. It is helpful to clarify session rules with staff. This step improves project analysis and workflow clarity.

10. Capture reporting and analysis time

Staff who spend time reporting and analyzing create indirect contributions. Firms should track the start and end times of reporting. Accurate logs ensure realistic project costs. Reduced reporting time can reduce labor costs. Digital tools and dashboards automate reporting time. Clear reporting rules for staff are helpful. This step provides insight into management decision-making and workflow.

11. Use knowledge sharing sessions

Knowledge sharing sessions improve team skills and productivity. Staff should log session duration and topics. Accurate capture provides a clear estimate of indirect time. Lack of knowledge session logs can lead to cost savings. Automated trackers and project tools log sessions. This is helpful for staff to maintain rules and logs. This step helps in team collaboration and optimization of indirect times.

12. Capture cross-functional collaboration

Cross-functional meetings and coordination also generate indirect time. Staff must accurately log meeting start and end times. Accurate capture corrects project costs. Missing logs can lead to under-estimated labor costs. Automated tools and dashboards facilitate cross-functional collaboration. Maintaining logs and clear rules is helpful for staff. This step improves project integration and productivity.

Conclusions

Accurate indirect time measurement makes project costs accurate and predictable. Training, meetings, mentoring, and R&D all generate indirect hours. Firms should use digital tools and trackers to maintain clear start and end times. Accurate records make it easier to plan future resources, forecast budgets, and allocate labor. It’s helpful to provide clear rules and guidelines to staff. Failure to measure indirect time can lead to cost overruns and budget surprises.

Accurate indirect time recording improves staff accountability and productivity. These methods are equally effective across remote, hybrid, and onsite teams. Automated tools and project dashboards analyze indirect hours to provide insights. Firms that measure indirect time have higher project profitability and efficiency.

FAQs:

1. What is indirect time in project costing?

Indirect time is the hours staff spend on activities like training, meetings, mentorship, and documentation, which are not directly billable but impact project costs.

2. Why is measuring indirect time important?

Accurate measurement of indirect time ensures correct labor cost calculation, improves budget forecasting, and prevents unexpected project cost overruns.

3. Which tools can track indirect time effectively?

Digital time trackers, project management software, dashboards, and automated log systems can help capture training, meetings, R&D, and documentation hours.

4. How can indirect time improve team productivity?

By analyzing indirect hours, managers can identify redundant meetings or unproductive sessions, optimize workflows, and allocate resources efficiently.

5. Can indirect time tracking be applied to remote teams?

Yes, remote, hybrid, and on-site teams can all track indirect time using digital tools, ensuring consistent project costing and performance analysis.