In order to calculate project costs, staff costs and charge-out rates, accurate knowledge is required of the way in which time is spent by staff (including working principals) because not all working time is spent on projects. Some time is spent on general administration, personal matters and on various management activities, such as marketing.
Time records provide a practice with historical benchmarks, a basis for budgeting and setting fees and for establishing project costs and profitability. The proportion of project time to non-project time will depend on the role and duties of each member of staff. A principal involved in marketing and administration may spend as little as 20% of working time on projects, yet someone engaged on contract work may spend 100% of their time on projects.