If you run an accounting firm that’s grown beyond a handful of staff, you already know this: time is your inventory. Misplace it, and you lose money. Misprice it, and you leave profits on the table. Don’t track it? You’re flying blind. In fact, manual or delayed time tracking can overlook up to 20% of a professional’s actual working day.
Yet, far too many firms are still relying on generic tools or spreadsheets to track time, especially when things get busy. That works when you’re small. But once you scale past a handful of employees, the cracks start to show, and the cost of lost hours compounds quickly.
If you’re wrestling with these issues, this guide is for you. We’ll break down why dedicated accounting time tracking software is so critical as your firm scales, what features actually matter, and how to compare options without getting lost in the weeds.
The Growth Challenge: Why Time Management Gets Harder as You Scale
Time tracking is simple when you’ve got a team of five. But when you’ve got a team of fifty across three locations and five services, it requires a system.
Here’s what starts happening as you grow:
- Context switching multiplies: One team member might work with 20 clients in a week. Logging time without losing detail gets harder.
- Unbilled hours pile up: Your staff means to track time…but it falls through the cracks. If you aren’t logging it, you can’t bill it.
- You have no clear view of capacity: Who’s at 80% utilization? Who’s overloaded? Without real-time data, you’re guessing.
What is Accounting Time Tracking Software?
Accounting time tracking software is a system that helps accounting firms capture, manage, and analyze time across client work, services, and staff – with the controls needed to support billing, compliance, and profitability.
But it goes far beyond a digital stopwatch. Unlike generalist tools like Harvest, true time and billing software for accountants ties every entry to the client, engagement, staff role, service, budgeted time, budgeted dollar amount, and billing outcome. It also supports audit trails, approvals, and reporting you can trust.
Here are some specific features to look for:
- Billable vs. non-billable tracking tied to actual services
- Role-based permissions (not everyone needs to see firm-wide data)
- Client and task-level tagging
- Immutable logs and audit trails
- WIP and retainer integration
- Approval workflows
- Lock dates and period control
- Tight linkage to billing, invoicing, and CRM tools
- Budgeted v. Actual time
- Budgeted v. Actual dollars
Why Time Tracking is Essential for Accounting Firms
Ask any firm owner who’s been through a growth spurt – the problems don’t show up all at once. They trickle in. A few missed hours here, an unclear invoice there. Before long, you’re losing money and can’t pinpoint why.
Here’s what happens without a proper system:
- You’re pricing fixed-fee work based on gut. Without time data, your margins are just a guess.
- Your senior staff are burning out. You don’t see it until it’s too late.
- Write-downs show up in billing. But not before.
- Clients question invoices. And you don’t have a clear log to explain time spent.
- You want to grow. But you can’t tell what’s profitable or scalable.
Must-Have Features for Accountants
Here’s the shortlist to look for when evaluating time tracking tools
|
⚙️ Feature |
💡 Why It Matters |
|
Built-In or Easily Integrated |
Reduces double entry and streamlines reporting – whether built into your practice management or integrating with tools like QuickBooks, Xero, or FreshBooks. |
|
Automated Timesheets & Approvals |
Reduce manual entry while ensuring time is reviewed and approved quickly for billing accuracy. |
|
Easy Logging |
Support timers, manual entry, and mobile-friendly tracking so staff can log time without friction. |
|
Billable vs. Non-Billable Flags |
Clearly separate billable client work from internal or non-billable activities to protect margins. |
|
Role-Based Permissions & Team Views |
Control access to sensitive data and give managers visibility into team performance. |
|
Time Review & Approval Processes |
Add oversight and accountability to ensure accuracy before hours are billed. |
|
Period Locking |
Prevent backdating or retroactive edits to maintain compliance and audit integrity. |
|
Work-in-Progress (WIP) Tracking |
Track progress against retainers and ongoing engagements in real time. |
|
Customizable Service Codes |
Standardize how time entries are categorized for consistent reporting and billing. |
|
Real-Time Dashboards |
Monitor utilization, client profitability, and project status at a glance. |
|
Data Export, Retention, & Audit Trails |
Ensure compliance with secure records, easy export, and long-term data retention policies. |
Other nice-to-haves:
- Capacity planning
- Team utilization views
- Budget vs Actual tracking
How to Choose the Right Tool for Your Firm
Here are a few things to keep in mind as you’re selecting a tool:
- Start with your current pain. Is it missing time? Inaccurate billing? Burned-out staff? Start there.
- Set your budget. Costs can range widely. Make sure the ROI is clear for your firm’s size and growth stage.
- Match firm size and complexity. A five-person firm has different needs than a fifty-person, multi-location firm.
- Check compliance requirements. Ensure the system supports audit trails, period locking, and data retention.
- Evaluate how it fits your stack. Look for something built in, not bolted on.
- Pilot it with a small team. Don’t go firm-wide on day one. Learn what works, then expand.
- Plan for rollout, training, and SOPs. Even the best tool needs good habits to succeed.
Selection Checklist
Use this checklist to decide if a time tracking tool is the right fit for your firm:
✅ Supports approval workflows and period locking
✅ Provides audit history with immutable logs
✅ Integrates seamlessly with your accounting and billing systems
✅ Allows mobile and offline time entry
✅ Reports on utilization, WIP, and variance
✅ Offers role-based permissions for security and visibility
✅ Enables sufficient export or API support for flexibility
✅ Includes quality onboarding, training, and vendor support
✅ Transparent pricing and scalability as your firm grows
Final Thoughts
Time tracking doesn’t solve everything, but it gives you the visibility to solve the right things. It helps you price with confidence, spot burnout before it happens, and understand which parts of the firm are truly profitable.
As you’re evaluating options, look for tools that fit your workflows, work seamlessly with your tech stack, and support your team’s habits.
With Canopy, you get accounting practice management with time tracking and billing built in, so time capture, invoicing, and client management all flow together in one platform.
Track time and bill confidently with Canopy.
