How to Set Up Time Tracking Before You Bring on a Contractor

Bringing in a contractor feels like a solution. More capacity, faster delivery, less on your plate.

Then the first invoice arrives and you realize you have no idea how their hours map to your client budget. You have been tracking your own time in one system, they have been tracking theirs somewhere else, and now you have to reconcile two completely different logs before you can bill anyone.

Do the setup before the work starts. It takes less than an hour and it prevents a lot of pain.

Know What You Are Billing and What You Are Paying

Before you add a contractor to any project, get clear on two numbers. What you charge the client for that work, and what you pay the contractor per hour.

These are not the same number and they should not be treated as the same number. Your markup covers your time managing the project, your overhead, and your margin. If you do not track them separately, you cannot see whether the arrangement is actually profitable.

In Time-Trak, you can set different billing rates for different tasks and team members. Use that. Set the contractor's rate to reflect what you pay them. Set the client-facing rate on the task to reflect what you charge. The difference is your margin on their work.

Create the Project Structure First

Before the contractor logs a single hour, set up the project in Time-Trak with tasks that match the scope of their work. Name the tasks clearly. Use the same names your client will see on reports.

If the contractor is handling one specific phase, create a task for that phase. If they are handling multiple types of work, create separate tasks for each. Vague task names like "development" or "support" create problems when you try to report hours to a client who wants to know what they paid for.

Decide How They Will Log Time

You have two realistic options. They track in Time-Trak directly, or they track in their own system and report hours to you for manual entry.

If they track in Time-Trak, you get real-time visibility into their hours and you can set up automatic screenshots for proof of work. That is useful if you are billing the client on an hourly basis and need to be able to show work.

If they track externally, you will need a process for receiving and reviewing their logs before you enter them. Weekly is reasonable. Monthly is too infrequent. By the time you get a monthly log from a contractor, you have already missed multiple billing cycles and the data is stale.

Build in a Review Step Before You Invoice

Contractor hours should not go straight from their log to your client invoice without a review. Look at what they logged. Does it match the work that got done? Does it match the scope you agreed to with the client? Are there any sessions that look unusual?

This is not about distrust. It is about accuracy. You are accountable to your client for every hour on that invoice. If a contractor logs time incorrectly, even accidentally, and you send it without checking, that is your problem, not theirs.

Track Non-Billable Contractor Coordination Time

The hours you spend briefing a contractor, reviewing their work, answering questions, and fixing issues are real hours. They often do not get billed to the client, but they are not free. They come out of your time.

Track them separately as non-billable. At the end of the project, look at how much coordination time you spent. If it is more than 15 or 20 percent of the contractor's billable hours, your margin on that arrangement is thinner than it looks.

That information changes how you price the next project where you plan to use the same contractor.

Set It Up Once and Run It the Same Way Every Time

The value of a consistent setup is that it produces consistent data. After three or four contractor projects, you will have real numbers for how much coordination overhead to expect and how to price for it.

Track your time, bill every minute.

Time-Trak is a native Mac and Windows time tracker with a floating timer, automatic screenshots, and one-click invoicing.

Free during beta.

macOS + Windows · Floating widget · Auto screenshots