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How to Categorize Time Entries

Harvest empowers teams and freelancers to categorize time entries effectively, ensuring accurate billing and optimized workflows, addressing productivity challenges.

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How much revenue is your team leaving on the table?

Most agencies run at 55-60% utilization. Even a small improvement means significant revenue. See what closing the gap looks like for your team.

Number of people who track billable time
$
Blended rate across roles (junior, senior, lead)
55%
Percentage of total hours that are billable. Industry average is 55-60%.
75%
A realistic target for service businesses is 70-80%.
Monthly revenue gap $0
Revenue at current utilization $0/mo
Revenue at target utilization $0/mo
Extra billable hours needed per person/day 0h
Annual revenue opportunity $0

Start tracking team utilization

Walk through the entire flow below. Start a timer, check your reports, and create a real invoice — all in three clicks.

Go ahead — start tracking!

One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

  • One-click timer from browser, desktop & mobile
  • Works inside Jira, Asana, Trello, GitHub & 50+ tools
  • Duration or start/end — your call
  • Day, week & calendar views to stay on top of it all
  • Friendly reminders so no hour gets left behind
Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
Blog calendar planning
1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

The Foundation: Why Categorize Your Time?

Effective time categorization is essential for enhancing productivity, increasing profitability, and achieving a better work-life balance. By categorizing your time entries, you can identify time sinks and high-value activities, ultimately leading to improved workflow optimization. For instance, understanding the split between billable and non-billable hours is crucial for service-based professionals like consultants and agencies, where 40-60% more might need to be charged per billable hour to cover non-billable time. This categorization ensures accurate billing, helping you to avoid a 15-20% potential revenue loss due to mismanagement.

Moreover, categorizing time entries promotes accountability and informed decision-making. By tracking time meticulously, businesses can comply with regulations such as the Fair Labor Standards Act (FLSA), which mandates recording hours worked, overtime, and paid time off for non-exempt employees. This detailed tracking can also help identify scope creep and underutilization, allowing for timely adjustments in project management.

Crafting Your Categories: Best Practices for Organization

Creating effective time categories involves starting simple and gradually refining them to fit your unique needs. Essential work categories might include Billable vs. Non-billable, Project Work, and Administrative Tasks, while personal categories could cover Family, Exercise, and Hobbies. A well-structured categorization system uses projects, tasks, and tags, allowing for granularity without overwhelming complexity.

When crafting categories, keep in mind the "Category Checklist": ensure categories are mutually exclusive, comprehensively exhaustive, consistently abstract, and limited in number. This approach prevents over-engineering and promotes clarity, which is crucial as Gartner's research highlights that nearly half of workers waste time searching for necessary information. Consistency across the team is vital for meaningful insights — Harvest supports this by allowing task-based categorization and flexible time tracking for detailed activity tracking.

Tailoring Categories to Your Needs: Industry and Context

Customizing time categories to suit your industry and company size is essential for maximizing efficiency. Small businesses might use broad categories like Sales and Marketing, while larger enterprises require more specific ones such as IT Development or Legal Services. For service firms, categorizing by service types or client needs ensures precise tracking, while retail might focus on customer journey stages.

Project-based work benefits from categorization by project phase or deliverables, while ongoing work can focus on routine tasks. For industries with strict compliance requirements, such as healthcare or government contracting, detailed and consistent categorization is critical to avoid penalties. Harvest facilitates these needs by allowing users to categorize time entries by client, task, and billable status, ensuring compliance and profitability.

Implementing and Optimizing Your Categorization System

Setting up an effective time categorization system involves several key steps. Begin by co-creating the system with your team to ensure buy-in and gather valuable input. Regularly review and adjust categories to keep them relevant as business needs evolve. Avoid common pitfalls such as over-engineering and inconsistent labeling, which can muddy insights and reduce effectiveness.

Harvest supports a dynamic categorization system by providing detailed reporting on time, expenses, and budgets. This allows you to leverage time data for strategic insights, ensuring continuous improvement. By tracking both billable and non-billable time, Harvest offers a comprehensive view of how time is spent, enabling more strategic resource allocation and productivity enhancements.

Categorize Time Entries with Harvest

See how Harvest helps you organize time entries by billable status, task, and client for precise project management and billing.

Harvest time entry categorization interface for productivity

How to Categorize Time Entries FAQs

  • The best categories for time tracking depend on your specific needs but generally include Billable vs. Non-billable, Project Work, and Administrative Tasks. For personal use, consider categories like Family, Exercise, and Hobbies. Harvest allows you to customize these categories to suit your workflow.

  • To effectively organize your time entries, start by defining clear categories that reflect your work and personal life. Use a hierarchical structure with projects, tasks, and tags to add granularity. Harvest supports this organization by allowing detailed task-based categorization.

  • Categorizing time entries improves productivity, billing accuracy, and work-life balance. It helps identify inefficiencies and optimize workflows, potentially preventing a 15-20% revenue loss due to mismanaged time. Harvest facilitates these benefits with flexible tracking and reporting.

  • Yes, industry-specific categorization methods exist. For example, service firms may categorize by client needs, while manufacturing might track by production stages. Harvest's flexible system allows you to tailor categories to your industry's unique requirements.

  • Choosing between billable and non-billable categories is crucial for accurate invoicing. Consider tasks directly related to client work as billable and internal tasks as non-billable. Harvest allows easy tracking of both, ensuring comprehensive billing and time management.

  • Harvest integrates with Asana to provide seamless time tracking within your project management workflow. By linking tasks in Asana to time entries in Harvest, you can enhance productivity and ensure accurate billing for all project activities.

  • Yes, Harvest allows you to track expenses alongside time entries. This feature enables you to capture all project-related costs, ensuring comprehensive budget management and accurate invoicing for clients.