The Importance Of Time Recording With Toggl's Ilia Markov

No one wants to be a busy fool when they are running their agency, working super hard but not being profitable. And one of the ways we can assure that doesn't happen is by implementing time recording so that we can measure utilization and capacity and ensure that our staff are performing at the level that we expect, which will enable us to be profitable. Which means we can invest back into our team and into the agency's infrastructure. So that's what we're going to dig into today and I'm really excited to be joined by Toggles Ilya Markov. So let's jump into the show and let's find out why time recording is so important and why you should be doing it, and the metrics that you should be measuring and how to implement it in a best practice way that is successful throughout the agency. I'm Rob Da Costa and this is the Agency Accelerator Podcast. As someone who has stood in your shoes, having started, grown and sold my own agency, I know just how it feels in the ups and downs of agency life. So this podcast aims to ease your journey just a little by sharing mine and my guests experiences and advice as you navigate your way to growing a profitable, sustainable and enjoyable business.

Hey everyone and welcome to this week's Agency Accelerator Podcast. I am really excited today to be joined by Ilya Markov from toggl. Now I'll do a quick introduction to Ilya. His journey in tech marketing started in 2013 after he graduated with an MBA from the University of Michigan. And since then he's had the chance to work with some of the most exciting brands in the SaaS market. And today he is the marketing director of Toggl, a leading time tracking software company. And with over a decade of marketing experience, Ilya brings a wealth of knowledge and expertise to help agencies optimize their operations. So I am delighted to have him join us today. So Ilya, welcome to the podcast.

Thank you, Rob. I'm really excited to join you as well. Thank you for having me. Super cool to be here. I'm very excited for this chat.

Fantastic. So welcome to the show and let me start off by asking you a broad question. Today we're talking about time tracking and why it's so important. So I just wanted to ask you, why is it important for marketing agencies to track time even if they don't bill by time, which I sincerely hope they don't because I'm definitely not a fan of that. But what is the benefits they will get from tracking their time?

So by now I think everyone's familiar that there are multiple ways to, to.

To build for your knowledge work essentially. And time is just, you know, billing by the hour, which as you said, is not even the greatest way, it's.

Just one way to do it. However, regardless of the, the pricing model and the billing model that you have, I think it's super important to understand.

How you are using your main resource.

Because yes, anyone selling their knowledge as a service, at the end of the day that's kind of done.

You know, the vector there is time. It's not just the knowledge that you have because it's not productized usually, but.

It'S some kind of vector which comes down to time. So whether you are bidding by project.

Value based, if you're really advanced, or any type of pricing that you use.

A pricing model, it's very important to understand where your time is going. And we have internally at Toggle, we have this concept of there are different levels of sophistication in how you use this data. The most common, the most basic one that we see, you know, most of.

Our customers, they come to us with.

This basic need is just to build their clients. They want to make sure they understand where the time goes and that this time ends up on an invoice that they send to their clients. However, we see that many develop a.

Taste for tracking and analyzing where the time goes.

So after some time they start asking themselves questions like, well, working for these clients, is it actually profitable? Especially if you're not billing by the hour, is it really profitable? Where is my time going? Where can I improve? Am I wasting some of the time of my organization in the sense that my most qualified people are doing work.

Which can be given to more junior people. I can hire someone junior or I can outsource part of this work.

And having this kind of understanding which starts with tracking your time, but then adding context around it and using that context, that contextualized data to understand what's going on is how you can improve your operations as an agency or any type of service organization.

Yeah, so fantastic. I just want to add my kind of agreement with that. The way I always liken it is that we should be kind of building a brick wall how we measure time internally and then what we sell to our clients, because I am, I'm always preaching about selling time to your clients is the wrong thing. Because clients are not buying your time, they're buying an outcome and they're buying a fix to the pain that they have. And it's our job in the early days stages of working with the prospect to identify that pain and price accordingly. However, if you want to make sure you're super profitable and productive and you can measure capacity and all the rest of it, you have to kind of park that and then internally measure time. So I'm a big fan of time recording and of course TOGGL is one of the major players for agencies who are looking at implementing time recording. And just to say, I did many things wrong when I ran my agency back in the 90s, early 2000s. But one of the things that we did right was track time. And in those days Toggl wasn't around and neither were any of the other tools. So we literally used an Excel spreadsheet to track our time. So the fact that we tools like Toggl that really align to the way we work is a huge advancement. Tell me some of the data and some of the KPIs and metrics that we should be measuring internally to help us look at some of the point data points that you just mentioned. What should we be looking out for and what should be measuring.

So once again I will go back to this idea of contextualizing your data around the time that you spent. Starting with a spreadsheet or even like.

A timesheet on a piece of paper is fine.

The problem is that very quickly you see that you kind of, you like some of the context that you need. Just as an example, I have someone on my, on the marketing team at Toggle who used to work for an agency doing a lot of email like automation sequences, email campaigns and the like. And she was, she was, they were.

Doing simple timesheet as a time tracking method.

And whenever a new client, potential client, approached the agency to ask for a quote, she had a very hard time giving an exact quote because she liked. Even though she's done a number of similar projects and similar work, she still found it hard to give an estimate, an accurate estimate of how much time.

It would take her to to do the work for this new potential client.

Because of that lack of context around the data. So I would say one thing is to add as much as possible.

So if you use Toggle track by no means like there are other ways to do it of course.

But if you use Toggle Track, you can assign each time entry is what we call every time you record the time.

You record some work.

You can assign it to a project, you can assign it to a client, you can add tax and you can.

Mark it as billable versus non billable time.

And this usually gives you the basis of that specificity and that context that you can use to then understand what's going on with your business. Some KPIs that we see is, for example, the share between what time is.

Billable versus non billable.

And again, even if you're not billing.

By the hour, you can still use this feature to kind of figure out.

Okay, which part of the time that my team spends working ends up on.

An invoice, Even if that invoice is like a monthly retainer or a project fee or whatever.

And we see that the highest performing agency usually are somewhere in the vicinity of 75%, meaning 75% of the total time ends up on an invoice. It's like 90 or 100 is not a good aim to go for because this is where you see your team.

Kind of burning out and it creates different problems. It doesn't leave any time for training, development or, or just to have some kind of camaraderie building.

Time within the team. Anything under that usually starts creating other problems around kind of keeping the lights on because you are not spending enough.

Of the time of your team doing work that is essentially bringing revenue for your company.

Okay, you've answered one of my questions, so I'll ask you this question again. And this actually came up. I have a group coaching program. This actually came up on our call yesterday. And I told everybody that I was interviewing you today, so I would ask you, which is about time utilization. So I always tell my clients that they should aim to be billing somewhere between 60 to 80% of a client facing person's time to a client. And you just said 75% was a good number. What would you say to somebody who says, look, We've tried getting 75 to 80%, but we just get super stressed and people just can't do it. So they're clearly doing something wrong to create that. What would your response be? Given that you said 75% was a good utilization number to aim for.

I would say go back to the source and try to find out what, where your time is going. And again, like, I don't want to sound like a broken record, but the more context you have around your data, the easier it is to spot some of these things. Another thing we see, which is, you.

Know, completely off of the preaching about.

Time tracking, we see that the agencies, the organizations that take time to kind of describe their processes, write them down, productize as much of the work they're doing as possible, is those that tend to perform better. And I know this can sound kind Of, I mean, probably doesn't sound that counterintuitive, but I've heard it from agency.

Owners and agency operators who say, oh, we're too busy to kind of sit down and document our processes.

But to me this always sounds like we're too busy to invent the wheel. So we'll just pushing the, we'll keep.

Pushing the slab of stone up the hill.

These are the two areas that at least talking to successful agency owners, I've heard them kind of as a potential solution to this challenge.

Yeah, that's great. And I'm again a big fan of agencies sitting down and documenting their processes because kind of what works when they're a small agency suddenly stops working when they become a mid sized to large agency. And the only way they can create robust scalable growth is by having processes that are consistently used and rolled out. So I'm a fan of saying to people, even if you're documenting processes today that you can do intuitively, it's going to really help you tomorrow because when you hire somebody else, they may not be able to intuitively do it your way or they may do it another way and then it creates chaos. So I'm a big fan of that and I think having a tool like Toggl or any of the other time recording tools really helps you drill down and look at that context and actually dig in. I've seen many scenarios where they have some kind of time recording, but there's a disconnect between how busy the agency looks and how profitable the agency is. And it's only by digging into the numbers that they can start to unpick what exactly is going on to create that mismatch. One other thing I just wanted to say as well, just going back on what you were talking about, is that even if an agency doesn't sell hours and days to clients, they still need to take a scope of work or project plan that they produce for a client.

Excuse me.

And break that down into hours and days and different people doing it. I feel like that's. You make disagree, but I suspect you probably don't. That's the only way you can really work out if you're profitable and actually make sure that you're not over servicing and all the rest of it.

Yeah, absolutely, absolutely. I mean it can be great to kind of give a quote that wins you the business, the piece of business. But if at the end of the day costs you more to service that.

That invoice than you actually put on.

It, then like what's the point, it's not sustainable, right? Like you won't be, you won't be.

In business for, for a long time if you're doing this.

I mean, sometimes it can be fine, like for other reasons. If you're hoping this is kind of like a, a step, a foot in the doorway kind of thing, but most times it isn't.

Yeah, sure, absolutely. And you become a charity, as I say, or you become busy fools. So none of us want to run a charity unless we are intentionally doing that or being busy for the sake of being, being busy. Let's sort of, let's tackle the elephant in the room around this, which is this message of oh, if I put time tracking in, it's Big Brother and it means you don't trust me and you're just checking up on me and I don't, you know, I don't want to work in an agency like that. How so? Let's just talk about the implementation of time tracking. If I'm an agency that knows I need to do this, I don't have it in. Today I decided that Toggle is a great solution. How do I go about implementing it not just technically, but also culturally as well?

I love this question and I love it because being part of the Toggle team, it's easy to answer this. And the reason is the Toggle is.

Intentionally built in a way which doesn't make it a good fit for managers who want to use time tracking to monitor their people.

So I can just say it straight away. We even have it on the website. It's called the anti surveillance statement. Everyone can go and check it out. I can send you the link as well. But it's very easy for us to say that if you want to use time tracking for monitoring, just go and.

Check out one of the other solutions. Toggle is not a good fit.

So I always love getting this question because it's also one of the things that distinguishes us from our competitors. However, it's not like we haven't heard.

Of people who are trying to use Toggle to monitor their employees.

And I always say the same thing. It's meaningless because it doesn't work even if you are. First of all, Toggle doesn't allow you to take screenshots or check like the made up activity scores that some other tools have. We have none of that. So you cannot do it. You can just look at the data. At the data. But even that is very easy to kind of cook.

If you want, like as an employee.

You can just create time entries manually you can say I've worked more than.

I really did or whatever.

So it's not a good tool for us. And we always say that it's not a fair use for time tracking. Like it's not going to give you any information, it's not going to make you a better manager. And if you try to. And it doesn't scale. So at the end of the day, if you want to push it, you need to hire, you know, one person.

For every, for every one person doing client work, you need to hire someone overseeing them, which obviously doesn't scale.

So the way we always advise our audience to approach this is to start by making it very clear what the use for time tracking is and how it helps the organization and everyone who's.

Part of the organization.

So it can be a way to spot some of these inefficiencies. It can serve as a early warning.

System to tell people like to surface who's doing too much, who's kind of approaching that point of kind of burning.

Out and address these things and find ways to optimize the work. So maybe as I said earlier, you kind of move some of the lower.

Value work, you hire someone or you kind of outsource some of these things.

To kind of make sure everyone's.

You.

Know, in their comfortable zone, feeling challenged, doing valuable work, but also not, not.

Going too far to the point where you're like, you don't see the, the point of it or you're feeling too tired or too stressed.

Yeah, such a good shout. I mean, I guess anyone who thinks they're going to implement any kind of time tracking to check up and monitor. People have a bigger issue in their agency than that, don't they? As they need to look at their culture. But I see people getting this wrong because they kind of suddenly announce one day that we're going to implement time tracking. Everybody feels like it's a big burden on their time to do this additional admin tasks and they suspect that it's because they're not trusted. So I think communicating really carefully why we're doing it and also selling the advantage to the employ to them because again, one of the things that enables employees to do is do a bit of self management. Right. So I'm halfway through the month but I've used three quarters of my time for client X so you know, the amber warning light is on. Tell us about, let's just talk about toggl specifically. Tell us about some of the advancements that are coming down the line with, with a tool Like Toggl and how. I don't know the answer to this at all. But how or is AI going to impact anything that you guys are doing?

Sure. Great one. So we've really, over the last year, I would say we've really kind of narrowed down and we really identified organizations, agencies, consultancies and so on as our the group of people and companies that we can help the most.

And we want to give them.

More features and more ways to solve their challenges through Toggle. So we have several major initiatives, let's put it that way, apart from Togo.

Is actually a suite of three tools.

Track, which is the time tracking tool that Toggle is most known for, Plan, which is a project management resource and capacity management tool and Hire, which is actually serviced by a separate team.

It's a tool that helps companies hire.

The best talent. One of the big focus areas for us is kind of bringing Track and Plan closer together and allowing people to.

Close the cycle of.

Planning for that time, then tracking it and then improving that planning. So becoming much better in understanding what it actually takes to complete a piece of work to service a client by.

First doing the planning, but then actually feeding that planning with real data from previous customers.

So this is a big initiative internally. We have a few things coming in.

The later parts of this year that will allow our customers to make much better use of their time tracking data.

When it comes to planning. To answer your second question about AI, I think it has a huge, huge value. I think time tracking is one of the areas where it can be very helpful. And we are looking into ways to kind of make this process completely automated.

With the use of AI.

So because this is one, I mean, no one wakes up in the morning being super excited about tracking their time and just switching between what they like, the project they're working on in Toggle.

Track or whatever they're using every five, 10 or 15 minutes, depending on what they're doing, or every time they change the active window or their laptop or jump on a call or whatever.

But we believe that through using AI creatively we can make this a lot.

More intuitive and easier.

And we've adopted an approach where this year we have like an internal hackathon sort of initiative where different people in the company kind of come up with, with creative projects. And this year for it happens once a year and this year I think at least 50% of the projects were somehow related or using AI. And quite a few of these things are now part of the roadmap for.

The product and will be coming in the next few months or so, they'll be implemented in the. In the product itself.

Yeah, I mean, it's so fascinating how AI is impacting so many things. So it sounds. Excuse me, it sounds really exciting that you're looking into that.

Now.

You have kindly offered our listeners a discount if they want to try out toggl.

So do you just.

If you can remember it. Can you just want to remind us of that? And then of course, I'll put a link in the show notes with. With this podcast.

Yeah, sure. Thanks for the opportunity to share that with your audience. We're offering a additional 20% discount. Additional because you already get a discount for, for getting an annual plan. But for new customers who get an annual plan, we're offering a an additional 20% off. All they need to do is use the coupon code, which will add in.

The show notes as you said. But I believe it's accelerator.

So I'll just share that with you after this.

We'll include that. And I am a huge fan of time recording. It's a conversation that comes up time and time again with my agency audience. I haven't really seen a convincing way of measuring efficiency, capacity and profitability without tracking time. And TOGGL definitely comes up in that breadth of the sort of top three or four tools to use for agencies. So I'm glad and appreciate that you're making that offer. Is there anything else that we haven't discussed that you think we should share with the audience before we wrap the podcast up today? I know that's putting you on the spot a bit, but is there anything else that I haven't asked you that you think is useful to share?

I think we kind of went through.

Through the main things. You know, as I said, no one gets like excited in the morning, you know, to track their time.

But at the same time we see.

That those who persevere through the boredom of doing it, that they very quickly see the benefits.

And those who are, as an organization, very open about how they use it and kind of not just do it in the beginning when they introduce it and just say, oh, we need to start doing it now for these reasons, but kind of go back, make it something that everyone's doing.

So, you know, founders, managers, everyone's tracking.

Their time and then showing to the rest of the organization how they use this and how it's beneficial to everyone in the organization. Are those who kind of do it the best and they see the biggest benefits out of it?

Yeah, I think that's a really important point to emphasize because I have seen too many people implement time recording, making their teams fill in their timesheets every day and then nobody ever hears anything of it ever again. And so if there's no feedback, good, bad and ugly, then it kind of demotivates people to use it. Whereas if there are actually some feedback that compliments people who are hitting their 75% capacity targets or gives them feedback where there's an over servicing issue and actually sits down and digs into why that's happening, that's going to motivate people to use it. So that's a good point that you have sort of made there.

Yeah. And at the end of the day you want to show team members how it's beneficial to them. So if you go and you say like, if you have a conversation around, I see you spending way too much time on this client. Like, you know, we want to understand what's going on so we can help you out. So you can kind of leave at.

5Pm or 6pm so you don't have.

To stay up late, that sort of thing.

I think, you know, that will make people a lot more likely to track their time and feel comfortable doing it.

Absolutely. Yeah. Okay, great. Well, let's wrap this up because I'm conscious we're heading towards the half hour mark. Let me ask you the question that I ask all of my guests, Ilya, which is if you could go back in time and give your younger self just starting out in business a piece of advice, what would it be?

I would say just always believe in yourself. And I sure it can be a double edged type of sort thing.

You shouldn't be too confident, especially if you don't have the skills and the smarts to cover it.

But I see that people usually a lot more likely to doubt themselves and kind of short sell themselves than be overconfident. So don't doubt yourself. Don't buy all the hype that flies around. And I'm saying hype to keep it family friendly on the podcast, but just kind of believe in yourself.

Always work on, you know, sharpening the knife to, to keep using the metaphor.

Keep working the metaphor.

But always kind of make sure you are feeling comfortable to kind of get the best for yourself and for your business, your company, whatever.

Great, good advice. I love asking that question because we get so many different responses to it. So thank you for that. Now obviously we're going to share the link if people want to try toggle and get that discount. But if people wanted to reach out to you or learn more about to Toggle. Where should they go besides that link that we're going to share.

Learning about toggle toggle.com It's T O doublegl without the E at the end toggle.com they can connect with me on LinkedIn. LinkedIn is probably the best place or Twitter by typing my name and I'm just very happy to connect with anyone who's listening to this whether they have questions, feedback or they just want to stay in touch with me.

Fantastic. Well I'll make sure we include all of those links into the show notes with this podcast. But other than that I just want to say a huge thank you for joining us today and sharing your insights into what is a super important topic that all agencies should be should be addressing.

Thank you as well Rob. It was a real pleasure. Really enjoyed getting on this with you and happy to you know, chat more.

About time tracking or whatever you have in mind anytime.