What is Time Tracking?
Time tracking is the process of recording the amount of hours worked. It ensures employees and clients receive accurate payment and use resources efficiently. This involves logging work hours, approving tracked time entries on schedule reports, calculating payroll, and creating reports.
Staying on top of time tracking is essential for fair pay, better decision-making, and compliance with labor laws. Along with logging employee hours, a good time tracker helps professionals track their billable hours.
Not to mention, it can improve productivity and optimize workflows by highlighting how time is spent.
Types of Time Tracking
You can track time in various ways, each with its own pros and cons. Here’s a quick overview:
Manual
Manual tracking involves writing down work hours by hand, often using paper or spreadsheets. Employees simply record when they start and stop working. It’s straightforward but prone to errors. It can also be time-consuming, especially for large teams.
As a result, manual tracking is losing ground. In the US, 38% of businesses still use manual methods like punch cards, paper timesheets, and time cards to track time. In Canada, this number is even higher, with 58% still relying on manual punch cards and timesheets.
Automated
Automated tracking uses software to record work hours automatically. Employees can start and stop timers or let the software track activity in the background. This method is more accurate and saves time while reducing the chances of mistakes. Automated systems often include extra features like reporting and payroll integration.
Project-Based
Project-based tracking focuses on specific projects. Employees log hours spent on each project, which helps managers monitor progress and stay on budget. It’s great for businesses that handle multiple projects at once. Agencies, consultants, and teams billing clients by the project find this method especially useful.
Task-Based
Task-based tracking breaks down hours by individual tasks. Employees record the time they spend on each activity. This provides a detailed view of how long each task takes, helping to improve performance and efficiency. Industries like software development and creative fields often use this method.
What Are the Methods for Tracking Time?
There are several ways to track employee work hours, each with benefits. Here are four common methods.
Timesheets
Timesheets date back thousands of years to the Code of Hammurabi in 1772 BC, where daily wages were set for workers.
Today, companies use timesheets to manually log work hours on paper or in digital formats like Excel. They track the time spent on tasks, projects, or clients with these sheets.
Time Clock Systems
Time clock systems, also known as punch clocks, became popular in the late 1800s. The first time clock, the Rochester Recorder, was patented in 1894 by Daniel M. Cooper.
It used a card system to track when employees started and finished their shifts. Time clocks are still common for hourly workers and are reliable for recording exact start and rest/end times. However, they mostly track overall work hours, not specific tasks.
Software
The software allows employees to clock in and out on a computer or mobile device. It’s more flexible than traditional time clocks because it can track time spent on specific projects or tasks.
This time-tracking software often includes features like time management, project updates, and reporting. It’s useful for teams and freelancers who bill clients accurately and understand how time is used.
Mobile Apps
Mobile tracking apps, which let employees log work hours from anywhere using a smartphone or tablet, gained some ground with the rise of the internet. Some even offer GPS monitoring to ensure accurate clock-ins.
They’re great for remote teams and field workers, making it easier to track time and adding extra accountability. However, mobile time-tracking apps still aren’t as popular as you’d think – only 25% of U.S. and 14% of Canadian employees who log time use them.
What Are the Benefits of Time Tracking?
Tracking time has several benefits, like boosting productivity, ensuring accurate billing, improving project management, and supporting fair employee evaluations.
Improved Productivity
A time tracker helps boost productivity by showing how employees use their time. It highlights which tasks are most effective and where time might be wasted. With this insight, teams can focus on what matters and cut out unnecessary activities.
The impact is striking— data reveals that the US economy loses a staggering 50 million hours of productivity daily due to unrecorded work activities. By tracking time more accurately, teams can use work hours more and get more done.
Accurate Billing
When you track time well, billing becomes straightforward and fair. It ensures that clients are charged correctly for time on their projects, which reduces the chance of misunderstandings.
Clear and accurate billing helps build client trust and keeps the company’s finances in check. By keeping a close eye on time, businesses avoid mistakes, which leads to more consistent revenue and better financial planning.
Project Management Efficiency
A time tracker makes project management more efficient by giving real-time updates on progress. Managers can see how resources are used and adjust things to keep projects on track. This helps them set realistic deadlines and manage workloads better. With real-time monitoring, managers can quickly spot and fix issues.
Employee Performance Evaluation
A time tracker app gives managers clear data on employee performance. They can spot who’s excelling and who might need extra help, making reviews fair and based on real work.
This data also helps managers see business growth, create better growth plans for the team, and show employees how their work supports company goals, increasing accountability.
Time Tracking in Different Industries
- Professional Services: A time tracker ensures accurate billing and clear communication with clients in consulting and legal work. It captures every billable hour and shows how you spend your time on tasks, making it easier to work efficiently.
- Construction: Monitoring time in construction keeps projects on schedule and within budget. It helps you monitor work hours, manage costs, and address delays quickly.
- Healthcare: Since doctors can work over 100 hours a week, and 12-hour shifts are common for nurses – time tracking is key in healthcare. Staying on top of hours, overtime, breaks, and requested time helps keep everything on track.
- Freelancing and Remote Work: For freelancers and remote teams, time trackers ensure you get paid for all your work and help prevent time theft. It gives you a clear view of work hours, which is key to productivity and meeting deadlines.
Key Features of Time Tracking Tools
When choosing the best way to track time, consider features like single-click entries and detailed reports. However, it has to make sense for yourself, your company, or your team. Consider these features.
Clock-in/Clock-out Functionality
Clock-in/clock-out functionality makes it easy for users to log their start and end times. This feature tracks attendance, breaks, and total working time.
Automating this process ensures accurate records and simplifies payroll. It’s also a time-saver, especially since many employees forget to clock in or out.
Project and Task Management Integration
When a time tracker integrates with your other tools or solutions, it’s easier to track time on specific tasks or projects. This connection simplifies workflows. It also helps manage resources, monitor progress, and make necessary adjustments.
Reporting and Analytics
Reporting and analytics give you clear insights into time spent on various projects and tasks. You can generate customized reports to view productivity trends, billable hours, and time allocation. These insights help make informed decisions based on real data.
Invoicing Capabilities
Invoicing capabilities let you create invoices based on tracked time. This is especially useful in service industries where accurate billing is crucial.
Automatic time tracking and automated invoicing reduce admin work, ensure accuracy, and speed up the payment process by directly linking tracked time to invoices.
How to Track Time Effectively?
Getting time tracking right can boost your productivity and keep projects on course. Here’s how to make it work.
- Set Clear Guidelines: Make sure everyone knows what to track and how. Clear guidelines help everyone get past the learning curve and keep time entries accurate and consistent.
- Choose the Right Tools: Pick a time tracker that suits your needs. Decide if you want a manual tool where you enter time yourself or an automated one that tracks time in the background. It’s also important to clarify how often to update time records. Go for a tool that integrates well with your favorite apps you already use and offers useful features like reminders, automatic time blocking, and detailed reports.
- Encourage Employee Buy-In: It’s up to employers to help employees see the benefits of time tracking. Show them how it can lead to more efficient work, better project management, and fair pay. Get their feedback and offer training to make the transition easier. When employees understand the perks and feel involved, they stick with the team, business, and new system.
- Regular Review and Analysis of Data: Regularly analyze the time-tracking data to spot trends and areas for improvement. This helps you adjust workflows, find productivity issues, and ensure accurate billing. Set up regular reviews to keep things on track and make any necessary changes to keep improving efficiency.
What Is Challenging About Time Management?
Keeping track of time comes with several challenges that can affect everyone, from employees to employers and everyone in between.
- Employee Resistance: Employees might push back against time-tracking systems, feeling micromanaged or having their privacy invaded. This resistance can affect how well the system works and the overall work atmosphere.
- Accuracy Concerns: Getting time tracking right is essential. Wage theft in the U.S. costs workers $22 billion/year, so accurate tracking helps schedule management and ensures fair pay. Inaccurate tracking can lead to underpayment issues, costing up to $6,000 per worker annually.
- Privacy Issues: GPS time tracking at work is becoming more common, but it raises privacy concerns. About one in three workers in the U.S., Canada, Australia, and the UK are tracked by GPS. While many are more worried about data and battery drain, addressing privacy concerns is key to keeping employees’ trust.
- Integration with Existing Systems: Adding a new time tracker system to your existing workflows and software can be a learning curve. It’s important to integrate it smoothly to keep data accurate and operations running without disruptions.
Time Tracking and Compliance
Tracking time is essential for staying compliant with labor laws, and it’s something businesses can’t overlook.
Labor Law Requirements
It’s surprising, but 43% of US business owners don’t know about the Fair Labor Standards Act (FLSA), which sets rules like the 40-hour workweek and minimum wage. Ignoring these rules can lead to big problems.
Since 1997, lawsuits related to the FLSA have increased by 417%, especially in industries like restaurants, hotels, healthcare, construction, and clothing manufacturing. These violations have cost businesses over $2 billion in back wages and fines, showing just how important it is to understand and follow labor laws.
Overtime Regulations
Overtime rules are a major part of staying compliant. The FLSA requires that non-exempt employees get paid at least time and a half for any hours worked over 40 in a week. However, many businesses struggle with this.
Over 83% of the money recovered from employers by the US Department of Labor has come from overtime violations, amounting to more than $1.7 billion.
Also, one in three private-sector employers wrongly use compensatory time (time off) instead of paying overtime, which violates FLSA rules.
Record-Keeping Standards
Accurate record-keeping is key for compliance, yet many businesses fall short. Only 16% of US business owners know timesheets must be kept for two years, and 36% know payroll records need to be kept for three years.
Poor record-keeping can result in legal issues and complicate management of hours, wages, and overtime. Off-the-clock work is a frequent problem, with 28% of employees admitting to working outside recorded hours, which can lead to wage theft and lawsuits.
How to Choose the Right Time Tracking Solution
When choosing a time-tracking solution, aim for ones that give you full access to a clear overview of your time management and make your job easier.
Assess Your Business Needs
Before picking a time-tracking app, determine your needs and set goals. Are you tracking daily tasks only, or do you need team management, billing, and reporting features?
Think about where you work—remotely, in an office, or a mix of both. Also, check if the time tracking app or tool needs to meet specific regulations, like FLSA or DCAA, for U.S. businesses.
Also, consider your budget. Would a free time tracking app make the most sense? If so, you can undoubtedly find a simple time tracker with a free plan or a generous free tier to consider. Or does a more advanced time-tracking app with a free plan for unlimited users and a premium plan for unlimited users work for you?
Key Features to Look For
Look for features that make your job easier. Real-time tracking shows time spent on tasks, and custom reports generate summaries.
If you bill by the hour, track both billable hours and non-billable hours. Automation, like timestamps, saves time and reduces errors. For larger teams, choose tools with clear team views and strong security to protect sensitive info.
Integration Capabilities
Your time-tracking app needs to integrate smoothly with the software you already use. It should work well with tools like Trello or Asana and development platforms like JIRA and GitHub.
It should also work across all your devices—Windows, Mac, iOS, and Android—and all its apps should sync up well. This way, you can track your time without disrupting your workflow.
User-Friendliness and Adoption
A time-tracking app should simplify your work, not complicate it. So, choose a tool that’s easy to use and intuitive. Look for a clean interface and straightforward basic features, with advanced options available that aren’t overwhelming for users.
Ensure the tool is quick for users to adopt; complex tools can lead to frustration and underuse. Try free trials or demos to see if it fits your needs and is comfortable for users on your project manager or team.
Time Tracking Software and Apps
If you want to track time more efficiently, cut down on administrative work, and drive profitability- consider time-tracking software.
Upland PSA makes tracking time easy with automated and detailed timesheets for payroll and billing. It helps businesses cut costs, ensures accuracy, and lets them focus on what they do best. Simply put, it’s the best way to track time. Learn more.
Time Tracking: Looking Ahead
Keeping track of time is easier than ever. AI speeds up and improves data collection accuracy, while biometric systems like facial recognition enhance security and prevent time theft.
Predictive analytics help businesses plan resources and manage teams more effectively, making time tracking a more useful tool for the workplace.