Actual hours
Actual hours are the effort a piece of work really consumed, as recorded by the people who did it. They are the counterpart to an estimate: one is what was predicted, the other is what happened. Their accuracy is limited by how and when the logging was done.
Actual hours are the only empirical input a delivery team has about its own work. Everything else is judgement.
That gives them more authority than they can always carry. An actual is somebody's record of their own week, and it inherits whatever habits produced it.
The useful discipline is to read actuals as evidence with a known weakness rather than as measurement. Daily logging makes them strong evidence. Reconstruction at month end makes them weak.
Their value is in the pattern rather than any single figure. One project over its estimate is a story. A dozen projects of one type consistently over is information a firm can act on, and it only becomes visible once actuals have been recorded the same way for long enough to compare.
Consistency is what makes that possible, and it is easily lost. Change how work is attributed halfway through a year and the earlier months stop comparing with the later ones. The change is usually an improvement. It still costs you the history, so make it deliberately and note the date.
Where this shows up in PeopleMuster
PeopleMuster totals actual hours by project and by department, and shows how they are distributed across the days of the period rather than as one figure.
Questions people ask
How accurate are actual hours?
As accurate as the logging habit behind them. Logged daily, they are close. Reconstructed at month end, they are a memory shaped by whatever felt like the main work.
Should actual hours include internal work on a project?
Anything that consumed the team's time on that work belongs in the figure. Excluding the unglamorous parts makes the next estimate for similar work too low.
Do actual hours show what a project cost?
Not by themselves. Cost needs a rate for each person's hour. What actual hours do show is where the effort went, project by project, which is the half of the cost question most teams cannot answer.