Reasons Why You Need to Track Time

1. Time Tracking Helps Create Better Workflows

How much time do employees spend doing their expenses? What is the organizational impact on preparing for an audit or interviewing employees? Tracking time at work answers these questions and many more. It reveals the true costs of business processes and provides executives, managers, and employees with critical time entry data. Leaders are then able to analyze this data which often leads to important operational insights.

2. Time Tracking Surfaces Hidden Costs

Between salary, benefits, healthcare, and PTO, businesses constantly struggle against the costs of labor. By tracking employee time, organizations are able to identify hidden cost centers and underperforming projects that would have otherwise stayed under the radar. By uncovering this data, they can often avoid costly overtime payments and project delays – both of which inflate your projects’ real cost.

3. Timesheets Help Enable Accurate Forecasting and Benchmarking

Time tracking at work reveals how long it really takes to complete a particular task or job. By leveraging historical time tracking data,, your organization can quickly create accurate internal benchmarks. This allows project managers, team leads, and executives to create accurate forecasts and estimates that ensure maximum profitability for any job.

4. Time Tracking Ensures Compliance and Expedites Audits

Accurate time tracking data makes it easy to stay in compliance with government and industry regulations, and significantly reduces the costs (and stress) of third-party audits. By using time tracking software, leaders can easily export and share reports with board members, funders, and all external stakeholders.

5. Timesheets Help You Compare Performance Across Business Units

Time entry data can show which teams, departments, divisions, or regions are the most or least profitable. Are certain parts of your organization over or under utilized? Can the business be restructured to increase profitability or work more effectively? Timesheet billing and cost data offer immediate insights that drive operational excellence and increased productivity.

6. Time Tracking Data Lets You Know When to Hire

Time tracking reveals important capacity insights. Before committing to project budgets and deadlines, managers need to optimize their workforces. Time tracking is effective because it will not only reveal whether you should hire, but it will also show if it’s more economical to hire full-time employees or contractors.

7. Timesheets and Reporting Data Helps You Conduct More Effective Employee Performance Reviews

With quantifiable employee cost, billability, and profit data, managers can conduct performance reviews without bias or favor. Identify which employees deserve merit-based compensation and have more meaningful dialog with underperformers.

8. Time Tracking Ensures Overtime Compliance

It’s essential that organizations with non-exempt employees use a system to track time. This is to ensure that all overtime hours are recorded and that payroll is properly distributed. Failure to accurately track employee overtime can lead to fines, lawsuits, and major disruptions in the office.

9. Timesheets Makes it Easier to Understand Employee Availability

When leaders enforce time tracking policies, they gain real-time understanding of employee utilization and availability. Armed with this knowledge, your organization can predict when and if a project is going over budget, and reduce the amount of non-billable or free work. This data also helps with understanding hiring needs, long-term project planning, and more.

Time tracking software is used across many different industries. Most all progressive companies today use cloud-based time tracking software applications that offer much more than providing a space for logging work hours. Businesses now expect project management tools, automated reporting features, and budget management tools all included in a time tracking platform.The following are a few popular use cases:

• Agencies – Agencies often employ both full time employees and contractors whose rates may vary. By tracking time, they can ensure they are properly paying their staff who may have different employment terms.
• Architecture and law firms – Architects and lawyers need to precisely calculate billable hours in order to properly charge their clients. Time tracking helps firms correctly capture time this time and invoice their clients accordingly.
• Nonprofits – Individuals or bodies who donate funds to nonprofits need to see how their money and resources are being used. If not, they may pull the plug on future funding. Not only this, but for many grants and/or federally-issued funding, nonprofits are required to report on payroll charged to those grants, which means time tracking records must be maintained. Time tracking software allows nonprofits to store these records securely.
• Service Professionals – Service Professionals require a specific business model that relies on accurate billing to generate profitability. Without time tracking tools, service professionals may suffer losses that are often hard to identify before time entry data has been collected.
• IT Teams – IT Teams often use time tracking for internal costing. The best time tracking tools allow them to recapture costs, increase productivity, and better communicate with internal stakeholders.

The benefits of tracking time are vast. When you understand how your team is spending their work hours, you gain greater control over project outcomes and ultimately your business’s success. Today, time tracking software helps myriad businesses in every industry optimize their efficiency, productivity, and profitability.