Harvest is time tracking with a point: pricing and capacity. In an agency, hours are not the product, but they are how you find out whether the product was priced honestly.
Why fixed-fee teams still need it
Fixed-fee work hides overruns until the invoice is already sent. A light time record by project — not a surveillance culture — lets you compare effort sold with effort used. That is the core of the simple finance system.
The purpose is better scoping, not punishing people for recording time honestly.
How it sits with the books
Xero holds money in and out. Harvest holds where time went. Together they answer whether a service line is profitable, which is more useful than a company-wide percentage at year end. See agency profit margin benchmarks for the range those reviews should inform.
When to skip it
Skip it if the team will not keep it current. A half-used timesheet is worse than a weekly estimate you trust. More on this topic: Money and Tools.