For a small business owner, it is important to keep track of your employees' time accurately. Whether it's for payroll, invoicing, or productivity purposes, accurate time tracking is essential, not to mention a legal requirement.
In this guide, we'll go over the basics of time tracking, including what a timesheet is and how to create and maintain accurate records.
What is a Timesheet?
A timesheet is a document that tracks the number of hours an employee spends on work-related tasks. It can also be a way of tracking billable hours.
Timesheets can be in paper or electronic form and employers use them to record the start and end times for each workday, as well as breaks taken throughout the day. Employees fill out their timesheets either daily or weekly, depending on each business’ policy. Timesheets are essential for businesses to track employee time and determine employee pay accurately.
Are Timesheets Required by the Government?
Employers must keep a record of time and wages in Australia and this is a legal requirement set by The Fair Work Act 2009. Businesses must record timesheets to track employee hours for payroll and superannuation purposes. Employers must keep records of their employees' hours worked, pay rates, and other details.
The Fair Work Act 2009 sets out the minimum standards for pay and conditions in Australia, including minimum wage rates, penalty rates, and overtime rates. Keeping accurate timesheets ensures compliance with these laws.
The Fair Work Ombudsman outlines that employers must keep records of their employees' hours for seven years to ensure that the records are available if needed for compliance purposes or legal disputes.
Are Timesheets Necessary?
Timesheets are necessary because employers who hire employees must abide by the law and record timesheets. Yet, besides staying legally compliant, there are plenty of practical consequences of keeping accurate records of worked hours.
- First, timesheets help businesses ensure that employees receive the accurate pay they deserve.
- Second, businesses can use timesheets for invoicing clients since they provide proof of the amount of time spent on a project.
- Third, business owners can use timesheets to make informed business decisions, such as determining which tasks take the most time and identifying areas to improve efficiency and productivity.
It’s also worth noting that transparent rostering and timesheet keeping are good for employee morale. When employers are clear about the payroll process and employees can see that everything is fair, this can improve job satisfaction and retention rates.
How to Create a Timesheet Manually
Employers need a clock-in-clock-out system in the workplace so that team members can track work hours and employers can determine the start and end times of shifts.
Employers need to create columns for the employee's name, date, start time, end time, and break times and then have employees complete the timesheet at regular intervals.
In the past, this process was always done manually, using a paper format to write down employee clock-in and clock-out times on a physical timesheet. The employer then used the timesheet to process payroll. While this method can be time-consuming, it's still a cost-effective option for small businesses with a few employees.
The next step up from manual time tracking would be to create a manual timesheet electronically using a computer or other device. Another good option for small businesses is to use our timesheet calculator and our Excel guide to get started on creating their own electronic timesheets.
Improve your Time Tracking with QuickBooks Time
A way to help businesses improve their time tracking is to effectively outsource the handling of timesheets to software. By relying on the intelligent automation of time-tracking software, businesses can make managing timesheets and payroll simple.
One of the most significant advantages of using software for time tracking, like QuickBooks Time, is its efficiency. QuickBooks Time allows employees to clock in and out with just a few clicks, eliminating the need for manual data entry.
By removing the step of manual data entry, you also remove the risk of human errors when filling out forms. A misplaced digit can have significant consequences down the line with payroll.
QuickBooks Time also offers GPS tracking, which means that employees can clock in and out remotely from their mobile devices, providing accurate location data for their shifts, and offering benefits of both efficient ease and informative data.
With QuickBooks Time, employers can also set up alerts for when employees are approaching overtime, ensuring you stay compliant with labour laws. Employers can make all this visible to employees with access to the app so that workers always know where they stand.
Finally, QuickBooks Time also integrates with QuickBooks Payroll, making the payroll process painless as employers can rely on the software to perform all the calculations for them. That includes calculating any overtime, time-and-a-half, sick pay, holidays, or any other complicated aspects of shift patterns in the workplace.
Find Out More About QuickBooks Time
Time tracking is an essential part of running a small business. By accurately tracking employee time, employers can ensure that employees receive fair pay, invoicing clients is more manageable, and they can make well-informed decisions relating to productivity.
Whether you choose to create timesheets manually or with software like QuickBooks Time, it's essential to keep accurate records to stay compliant with labour laws and keep your business running smoothly.
Check out QuickBooks Time today with a 30-day free trial to see how it can help your business.
