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What is Time Tracking:
A Comprehensive Guide

Why do companies implement time-tracking in their workflow? How can it help improve performance and increase revenue? Worked hours are listed among 10 key business metrics, as they allow to understand current processes and important trends in the team. However, just having that data is obviously not enough: a careful analysis is necessary to make right conclusions and decisions. While being an affordable investment, time-tracking tools provide managers and business owners with vital information on the business processes. So what needs to be considered when choosing a time-tracking system? In this article we summed up the most important aspects to be taken into account when introducing time-tracking in a company.

1. Measure it to understand it

It’s a well-known fact that introducing new systems in the company’s workflow is not an easy task. Employees are mostly reluctant to start tracking their work time, considering it yet another chore of their office life (as if there weren’t enough of them at the workplace). Managers, while finding it theoretically helpful, tend to not have enough time to count every hour spent on the projects. And still, many companies implement time-tracking tools in their work process. Why?

Measuring and documenting time expenses for specific work assignments is the key to successful time management. It’s not always easy to prioritize your tasks wisely, but accurate statistics can help you build up a rational time management strategy. Besides, the data on current time expenses help better estimate timelines and plan work ahead.

Another reason why companies need time-track data is billing procedure based on the timesheet data. Having accurate information on how much time has been spent on a specific project allows to calculate exact billable amounts and justify them, if necessary.

2. Understand team benefits

Time-track data reveals the full picture of our time expenses, performance, and workday breakdown. This information helps understand possible weak points and increase productivity and efficiency.

Being aware of how much time you normally spend on your daily tasks is a real help in beating procrastination: it’s easier to quit being distracted by social media and funny content on the Internet when you learn how much time exactly you spent on Facebook yesterday.

Tracking work time is an efficient way to increase productivity, especially for self-employed individuals who define themselves what to do throughout the workday and tend to experience severe procrastination problems. Did you ever wonder what useful things you could do during the time you spent watching TV shows and YouTube videos? We’ve done a research on this, and believe us, there are many things you can do instead.

Timesheet data is the most important source of information when calculating and understanding workplace productivity. Productivity metrics tend to be unclear in the knowledge-based economy, but work time statistics are its clearest and most understandable component.

To sum up, here’s a list of benefits that companies and teams get when tracking work time:

  • Clarity: all data is accurate, easily accessible and can be grouped by various parameters.
  • Everything proven and traceable: the data can be quickly reviewed, summarized, and used for justification of any costs or time expenses.
  • Better estimation: manageable deadlines and estimates.
  • Efficient planning for future workloads: timesheet data helps recognize and prevent unexpected time leaks and overstaffing / understaffing problems.
  • Accurate data for billing & payroll: you’ll never under-bill your customers having exact data on how much time has been spent for the project.

3. Understand personal benefits

The experience of many companies shows that basically, all parties of the work process – employers, employees, clients – benefit from accurate time-tracking. There are multiple improvements that time-tracking provides to everyone:

who needs time tracking software

4. Select the method

Vendors offer different systems designed for time-tracking, time management, and attendance monitoring. Depending on the company’s needs and employees’ positions, different time-tracking methods can be implemented. The following systems are widely used in various business areas:

  • Punch-in / out systems: swipe cards, clock in / out, geofencing systems. Being not exactly time-trackers, these systems record when exactly the employee arrives and leaves. They are mostly used for managing client service teams or organizing shift work, where monitoring attendance and preventing tardiness is crucial.
  • Background capturing tools. These systems automatically record all user’s activities on the computer, optionally with taking screenshots and sending them to managers. It’s considered a very efficient tool to increase efficiency and reduce time-wasting activities, but in fact moderation matters. This time-tracking method, when used unduly, can involve severe privacy risks for the employees.
  • Manual tracking systems. This method involves manual entry of time spent on specific tasks. The user can type in hours and minutes or start a timer for each performed task to calculate time automatically. Some of these systems include advanced features, such as billing, leave tracking and leave balances calculation, and work management.

When choosing the right method for your company, consider the purpose of time-tracking in your particular case: managing attendance, preventing improper use of work time, or getting detailed data on performed work.

You can also combine time-trackers of any type with other productivity tools to increase individual productivity and teams’ performance. There are many productivity apps available on the market, and you can choose what suits best for your personal purposes or for your team’s performance goals.

5. Consider technical details

Independently of the method used, it is important where the tool and all its data is located. There are several implementation options:

time tracking software types

Today’s trend is online solutions, as they provide better availability and release the staff from all installation, maintenance and upgrade works. However, some still prefer internally hosted software if the company’s internal regulations require to store the data on own servers.

6. Take all features into account

When choosing a time-tracking tool to be used in your company, you need to take into account many aspects. To help you save your time, we made a checklist of features you might consider important.

time tracking software features

7. Consider reasonable costs

One of the most important aspects is the cost of the solution. There are free solutions available, but they are usually very basic or buggy. Also, many of them require enormous effort when installing and configuring the system. So compare the prices for available solutions and consider their cost efficiency for your business.

Although cloud solutions seem to be more expensive than on-premise systems, many companies opt for them, because they don’t require any maintenance efforts. Many vendors include all installation, upgrade and data backup works in the fee, so the software is easy to access and use. Keep this in mind when considering reasonable costs of a time-tracking system.

For self-employed individuals who don’t need to track team’s working hours, affordable standalone applications are available that work on Windows, Mac OS, or Linux. If you need a very basic solution, you probably should consider using a free browser extension with time-tracking and distraction-blocking functions.

8. Implement the system

Human factor is one of the hardest obstacles for the implementation of a time-tracking system. Employees usually track their work time unwillingly, forgetting about filling in their timesheets until Friday. Here are some simple recommendations to follow when integrating the time-tracking system into the company’s workflow:

  • Choose an easy-to-use system that doesn’t require a long and effort-consuming user onboarding process;
  • Show your colleagues the advantages of accurate time-tracking, present it as a solution to some problems your colleagues are facing (productivity, traceability);
  • Make sure that team managers are familiar with the system and ready to help regular users;
  • Keep your time-tracking structure simple. Don’t create a complex workflow; 3 levels of time-tracking hierarchy are enough. Select easy-to-identify project task names to avoid confusion.

9. Ensure accuracy and efficiency

Configuring the time-tracking system for the company’s needs seems to be the easy part, but in fact it turns out to be tricky.

Our study shows that a poorly organized time-tracking process can have severe negative effects on your business. Up to 40% of work time is not being logged at all, which leads to under-billing customers and not understanding actual labor input in specific projects. That is why it’s crucial to configure your time-tracking structure in such a way that nothing gets overlooked.

There are some simple recommendations to follow that help you track time accurately:

  • Keep track of all time spent on meetings, communications with colleagues, and emails. When the employees don’t track it, approximately one third of their time remains not counted and therefore not paid by customers.
  • Remind your colleagues to track their time expenses at least once a day. You can use automatic notifications, if the solution you chose supports that.
  • Set up deadlines and estimates directly in the time-tracking system.
  • Close accomplished tasks and projects so that they don’t create clutter in the timesheets.
  • If your time-tracking system allows you to add descriptions to tasks and projects, add them to increase clarity and avoid possible mistakes in time logging.

These recommendations might seem to be a common knowledge, but ignoring them causes spending too much time on tracking time, which impairs productivity and kills motivation.

10. Analyze the data

Having all data collected is not enough for making right decisions: a thorough data analysis is the key to success. So how to use the data efficiently?

Many tools offer reporting functionality. When selecting a time-tracking tool, make sure it allows to run informative reports that help understand current status of your projects and future trends. This will help prevent possible delays in project delivery, plan work ahead, and distribute workload for future projects.

Having a robust reporting module in your time-tracking tool is also helpful when you bill your customers on the basis of the timesheet data. Running reports is a quick way to calculate billable time without missing anything.

Speaking of cost and billing functionality, a time-tracking tool with reporting and invoicing functionality can help you easily monitor and understand project costs. This option is a time-saver for project managers and business owners that doesn’t involve major costs like many special project management solutions.

11. Review charts and rankings from experts

Special resources like GetApp prepare regular rankings of time-tracking tools, evaluating them by various parameters: security, integrations, mobile access, etc. As their scores are independent of app vendors’ commercial interests, these rankings provide an unbiased information on software tools available on the market.

This autumn’s chart of top 25 time-tracking and expense tools by GetApp is already available at their website. With total values calculated on the basis of five factors worth 20 points each, it represents the best time-tracking apps based in the cloud:

Top Time Tracking & Expense Software 2016 | GetApp

Finding the right time-tracking system for your business is definitely not an easy task, as it requires thorough consideration of many aspects. Make a checklist according to your company’s needs and evaluate available solutions to find the right option. Share the purpose of time-tracking in your company with your colleagues, work together on the team’s productivity, and achieve the set goals.

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