Normally time is recorded against a Work Breakdown Structure (WBS). A set of pre-defined levels are provided: Project Groups, Projects, Task Groups and Tasks. Each level can be renamed as appropriate for your organization, for example Project Groups may be more appropriately called Clients, or Task Groups called Phases or Cost Centers. Also, not all levels need to be used and can be disabled. The Work Breakdown Structure topic has more information.
Levels may or may not have a hierarchical relationship, for example a Project may belong to a Client, whereas a Cost Center could be used across all Projects.