Time tracking offers several benefits for you and your business, such as improved productivity and protecting your earnings by making sure you’re billing for all the time you work. It’s also essential for keeping accurate records of employee hours.
While you can log time on paper or a spreadsheet, there is a better way: time tracking software. These applications are just one type of HR software available for businesses. They store your information centrally so you don’t have to enter data manually—and you can use this data as business intelligence.
But many of the time tracking tools on the market have issues. They’re often disruptive and don’t account for different business needs. Learn how to choose the right time tracking tool that will help grow your business.
How Time Tracking Can Help Your Small Business Grow
Tracking employees’ time is essential for visibility over performance in an organization. It allows you to know what activities your employees spend more time on and detect time killers. For example, according to a study by Vouchercloud, employees spend 44 minutes daily checking social media—and only 143 performing work tasks.
Here are six ways time tracking can help grow your business:
- Meets Staffing Needs Accurately
Almost all businesses have demand fluctuations, and it can be difficult to forecast when you’ll need extra staff to cover peaks. When you know how long it takes your business to complete a workflow, you can predict when you’ll need extra help to meet the demand.
- Assesses Profitability
Time tracking gives you insight on time spent and resources used, and you can use this data to evaluate the profitability of a specific project or client. Time tracking lets you identify tasks that may need optimization by revealing when you’re investing too heavily in a project, making it unprofitable.
- Increases Productivity
Accurate tracking means employees can control their time better and become aware of periods of low activity. Also, by mapping the workflows, you may identify tasks you can automate to improve efficiency and make data-driven decisions.
Wasted time has a hefty cost in lost productivity, and failing to track employee hours can mean significant costs in unrecorded work activities. According to the American Payroll Association, $7.4 billion is lost per day due to work tasks that are not logged.
- Prevents Time Theft and Buddy Punching
Time theft is an uncomfortable reality for most companies, but failing to track employee hours can have a negative impact on your bottom line. According to the above-mentioned study by American Payroll Association et al., the annual cost of time theft can reach $11 billion, with bad practices such as buddy punching costing a staggering $373 million a year.
- Improves Quotes and Billing
Time tracking helps you quote and bill more accurately. Before providing a quote for a project, you can review historical time tracking data for similar work. This will show how long it took and how many staff members were involved in completing that project, so you can price the next one accordingly. Reports can help you ensure your quote covers the time and resources you expect to invest, so you don’t sell yourself short.
Time tracking is critical for accurate billing, preventing any need to guess or rely on a rough estimate of how long certain tasks took. By giving an exact log, you ensure the invoice will reflect reality. Also, time tracking can be helpful to clear invoice disputes as you can easily provide a report.
- Keeps Track of Flex Workers and Contractors
Time tracking is not just useful for salaried employees. Organizations that have a flex workforce often find it challenging to track everyone’s time. Keeping an accurate record of contractors’ hours ensures the organization is paying for actual working time, as well as tracking the freelancers’ performance. Time tracking software is especially useful for businesses with mixed salaried and flexible staff, as it puts everyone on the same page.
11 Features to Look for in Time Tracking Software for Your Business
The right time tracking tool for your company will depend on your business needs, but there are characteristics common to all leading solutions. Here are the basic features you should look for in a time-tracking software program:
- Easy to use: The time tracking tool will only be effective if the employees use it. Choose a solution that all employees—even beginners and those with less technical skill—can use with ease.
- Easy to set up: Similarly, if the solution is too difficult to install, it may disrupt your staff’s daily activities and damage their confidence in the process.
- Aligned with your business’ needs: The tool should improve your business processes and help optimize workflows.
- Integrates with existing solutions: Choose a tool that can work seamlessly with your payroll, invoicing, and HR management systems to prevent issues and lost time switching between tools.
- Good customer support: As with any software tool, it’s critical to have fast and reliable support and ticketing, especially in the beginning, when users are learning to work with the new tool.
- Customizable reporting: A good tool for time tracking should give you the data you need to optimize your processes. Customization is essential.
- Compatible with multiple devices: These days, with flex and hybrid working schedules, a time tracking tool needs to be cross-device. Employees should be able to track their time on any device while working remotely or in the field.
- Tracking activities in real time: The tool should track and log in real time to allow for adjustments.
- Invoicing directly from tracked time: The tool should be able to track time by client and invoice directly from tracked time.
- Visibility over your team: You should be able to see multiple users on one dashboard so you can optimize time management across projects.
- Comply with Fair Labor Standard Act (FLSA) and Defense Contract Audit Agency DCAA regulations: Work laws and regulations require logging time and conducting audits regularly. Your time tracking system should comply with these standards to help you avoid fines and penalties.
The Right Time-Tracking Software Can Improve Your Bottom Line
A time tracking system can help you gain important visibility over how time is spent in your organization. This information is valuable not only to improve your team’s time management, but also to optimize tasks, provide accurate quotes and ultimately, increase your profits.
Dean Mathews is the founder and CEO of OnTheClock, an employee time tracking app that helps over 15,000 companies all around the world track time.
Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many people’s lives are touched and changed for the better.
When he is not perfecting time tracking, Dean enjoys expanding his faith, spending time with family and friends, and finding ways to make the world just a little better. You can connect with him on Linkedin.