I think there is some incorrect information in many of the above posts.
There are three times that are of interest.
1. Time in Service (TIS). This is the time that *must* be logged to track inspection & maintenance requirements. It is defined as when the aircraft becomes airborne until it lands. As long as that *minimum* time is tracked, then you are legal. You could use a system that incurs TIS at a greater rate but not one that under records. The disadvantage of recording more time than minimum is that maintenance will fall due sooner than is strictly necessary. That makes the cost of operating the aircraft greater.
Acceptable methods include:
- Log airborne & landing times using your watch or the aircraft's clock.
- Use some sort of meter eg Hobbs. The issue becomes how is the meter activated. At a minimum it must start by the time the wheels leave the ground, and stop once they're back on the ground. Common methods (in increasing amounts of time added to the minimum) include weight-on-wheels (WOW) switch, airspeed (triggered at some reasonable airspeed just prior to becoming airborne), oil pressure, & master/battery. Also gear up/down activated.
Only the 1st two could be considered accurate. All the others except gear up/down record additional, and unnecessary, TIS. Gear up/down isn't legal because it records TIS sometime *after* the aircraft leaves the ground until sometime before it lands ie it fails to record time that is required to be recorded.
*Note: Many places use the hour meter on a tachometer. It is usually calibrated to clock 1 hour in time at cruise RPM. At lower revs it under records, at higher revs it over records. As long as it doesn't under-record for the whole of the flight than that's ok. But if it records some amount of time less than the true TIS (as defined) then it isn't legal. Doesn't mean that many organisations don't use it, but to follow the strict interpretation of the rules...
Note that TIS does not include engine starts, taxi, or any other operation of the aircraft other than airborne time.
2. Pilot flight time: From when the aircraft 1st moves under its own power until it comes to rest at the completion of the flight. Note that this includes taxi time, unlike TIS.
Required to show compliance with minimum experience requirements, currency etc.
3. Company time for billing: This can be any method that company wants to use to cover costs and, hopefully, give a profit margin. It could be number of clouds in the sky, or TIS, or Hobbs activated by one of many switches, on the clock or whatever.
Ultimately it costs $x.yy / hour for the company or owner to cover costs (and, hopefully, have a profit margin). Whether it charges a lower rate using a faster clocking method, or a higher rate using a slower clocking method doesn't matter.
The only way to compare costs is to check the total cost for any given flight using each of the offered charging schemes.
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I've ignored maintenance that falls due based on cycles or calendar. Usually cycles also includes an airborne requirement eg starting an engine without also getting airborne doesn't necessarily accrue a cycle. Depends on what the manufacturer has specified for that item or part.