2019-01-15 13:13:45 Managing People English Learn how employee time tracking can benefit your business. Find out how it increases efficiency, benefits clients and improves your... https://quickbooks.intuit.com/ca/resources/managing-people/employee-benefits/ 5 Benefits of Employee Time Tracking

5 Benefits of Employee Time Tracking

6 min read

Whether you run a sole proprietorship or a small business, time is your most valuable commodity. The way you spend your hours has a direct impact on your productivity — and more importantly, your income. Employee time tracking can help you manage time and use each hour more efficiently, so you can build a booming business faster.

1) Better Project Management

When you run a small business, there’s always something demanding your attention. Project management can be a big time sink. In a traditional system, you need to chase down each employee and find out how many hours they’ve spent on each task. Then, you can add up all of your employees’ hours and compare them to the client’s budget. This system takes up a great deal of time for both you and your employees. It also makes it difficult to spot problems early on.

That’s where using time tracking to get reliable data on your workflow can be a big help. Each time an employee starts a task, they record the project name and the amount of time. This information is instantly available to you, so you can keep tabs on projects in real time — all without having to pester your staff for time estimates. That means that you can see the project status at a glance. This makes it easier to find inefficiencies and spot tasks that need additional help. You can also see if the project is on track in terms of budget and adjust your workflow accordingly. Planning a new project? Time tracking data for past projects makes it easier to create a realistic schedule.

2) Accurate Client Estimates

When you give a client an estimate, you’re essentially guessing how much time you need to complete the project. If you go over on hours, you must either eat the costs or renegotiate the agreement.

What if you had accurate records that showed exactly how long it takes your team to do similar projects? Time-tracking systems can give you exactly that. The longer you use them, the bigger your pool of data becomes.

Imagine that you’re estimating a website redesign. Instead of making an educated guess, you could look at similar projects in your time-tracking system. You’d see that past websites took 30 to 50 hours for graphic design, 40 to 50 hours for programming and 10 hours for outsourced shopping cart development. With that information, plus an independent contractor rate sheet, you can give an accurate estimate — and avoid irritating the client with a renegotiation down the line.

3) More Efficient Workflows

In a small business, every dollar counts. If your employees aren’t using their time efficiently, it can eat away at your budget without increasing profits. Time tracking can help you spot inefficiencies and teach you how to organize time.

Suppose an employee has logged three hours for a client. When you look at the project, you see that it’s not as far along as you’d expect. Upon investigation, you might discover that old software is slowing the employee down, or that he’s using inefficient methods. This is valuable information — it tells you there’s a problem, so you can take action. A quick software upgrade or training session can improve your workflow, saving time and money down the line.

The same applies to you. Have you ever asked yourself, “How can I organize my time to benefit the business?” Time tracking can be the answer. As the business owner, your time should be spent on tasks with a high return on investment (ROI). At the same time, it can be hard to step back and let your staff take over the detail work.

If you’re learning to prioritize, you can try an experiment. Track your time for a week. Then, look for the things that take up most of your time. Can anyone else handle these tasks? Do these tasks have a high ROI? If you’re spending too much time on low-level tasks, it’s time to delegate. Time tracking can help you focus on big-picture, mission-critical work that helps the company grow.

4) Reduced Scope Creep

Scope creep happens when clients ask for one thing, but then add extra requests and deliverable over time. This is dangerous for your small business — and expensive. Time tracking can help you eliminate scope creep. Are your employees spending time on requests that weren’t in the original contract? You can show the client the time-tracking records. Then, the client can stop the additional requests or pay out more money to cover the extra work. Either way, your business wins.

5) Improved Employee Experience

In order for employee time tracking to work for your business, you need to get your staff on board. The trick? Help them understand how time tracking can benefit them directly.

If your staff members have ever complained about delays or bottlenecks, time tracking can be a great solution. When there’s an issue, you can simply look at the data to find the source. Then, you can find a solution quickly, making everyone’s life easier. This ensures that everyone has the support and the time they need.

Time tracking also makes it easier for you recognize great employee performance. Say you notice that one employee is meeting goals 50 percent faster than the rest of the team. You can respond by promoting them, offering a raise or giving them more responsibilities.

If your employees are worried about convenience, automated time accounting software can actually improve their workflows. They don’t have to worry about time cards or struggle to remember how much time they spent on a project. Instead, they can track time instantly with just a few clicks. Plus, if you choose a cloud-based system, your staff can record time from anywhere, on any device.

Choosing the Right Method for Employee Time Tracking

When you’re ready to start recording hours, you have a variety of time-tracking solutions to choose from. The most basic option is manual tracking. Your employees can simply note when they start and stop each task. At the end of the day, they can add up the hours and enter them into the client file. This method is a bit cumbersome, but it’s free — you can start right away using paper, a word processor or an Excel spreadsheet.

If you have room in the budget, cloud time tracking is a better option. These systems allow you to track time from any computer, tablet or mobile phone. That means it’s easier to record your hours when you’re traveling or out of the office.

How does it work? Simply choose the client or job from a list. Then, start and stop the timer. Later, you can customize the entry by describing the task and including notes. When it’s time to bill the client, you can itemize the invoice by task or simply add up all of the hours.

When you’re choosing time tracking software, it’s important to look for features like:

  • Cloud access from any internet-connected device
  • Mobile apps for phones and tablets
  • Reporting and analytics
  • Project management tools to help you track progress
  • Custom permissions for different users
  • Customizable alerts to tell you when a project is nearing its budget limit
  • Secure encryption

If you’re serious about efficiency, consider a time-tracking tool that integrates with your accounting software. A program like TSheets gives you full time-tracking capabilities. It also integrates with QuickBooks Online, which is a big time-saver. When you import the hours from TSheets into QuickBooks Online, it’s easier to:

  • Add billable hours to client invoices
  • Import employees’ work hours and streamline payroll

Not quite ready for a full time-tracking solution? You can simply use the time-tracking features in your existing QuickBooks account.

Time tracking has big benefits for you, your business and your employees. Whether you’re looking for more efficient workflows or organizing your time tips, time-tracking software can help meet your goals. QuickBooks Online helps businesses track and manage your business on the go.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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