If you pay someone for hourly work, it’s important to consider time tracking as a part of your normal routine. Time tracking ensures accuracy during pay periods so you can maximize profits. When you have a working system in place, it also eliminates the need for manual tracking. Exploring various tracking options and looking at potential drawbacks helps you create a system that works for your employees.
Benefits of Employee Time Tracking
Time tracking lets you create a record of the hours your employees work so that you can pay them correctly and manage your salary costs. Making this process electronic helps reduce errors and prevent disagreements between you and your employees. Traditionally, employees sign into a time clock or handwrite notes on a timecard, and you, in turn, manually enter the information in your payroll software. That’s still an option if you prefer the paper method. But using time-tracking tools can eliminate double entries and streamline the process.
Downsides to Time Tracking
Time tracking gives you the opportunity to see how much time employees spend on each task, which can help increase productivity and accountability in your workplace. But it’s also important to look at the downsides to spot potential issues and address them early. Those downsides include:
- Cost and labour: Depending on the time-tracking system and your number of employees, the upfront costs could be hundreds or thousands of dollars. It also takes effort on your employees’ part to learn the new system and log their hours correctly. Consider the labour involved with managing your time-tracking system and reviewing employee time data.
- Employee morale issues: There’s nothing wrong with tracking your employees’ time when they’re on the clock, but workers can develop morale issues when you start tracking their time. They may feel like you don’t trust them or worry that you’re going to micromanage everything they do. Keeping your employees happy is an important part of getting the most from them and maintaining a positive work environment. A time-tracking system could lower employee satisfaction and affect their performance, unless you communicate openly with them and explain why you’re implementing the system.
- Task difficulty level: With some tasks, it’s easy to assess an employee’s performance by the amount of work they complete compared to the time worked. If you have employees doing data entry or making sales calls, you can look at how much work they complete in a set time. Other jobs, such as creative professional positions, don’t lend themselves to tracking easily. An employee can work hard for hours in one of these positions without doing much in the way of tangible results. If an employee brainstorms for four hours one day without a new idea then comes up with something brilliant at the start of the next day, it doesn’t mean those first four hours are a waste of time.
Traditional Time Clock or Spreadsheets
If you prefer a traditional method of keeping time, consider mounting an automated time clock to the wall. Every employee gets a time card. Each time the person leaves and returns to work, they slide the card under the print mechanism on the clock, where it receives a timestamp. The clocks print the exact time worked each day. Keep in mind you have to enter those hours manually to process payroll, which can add a significant amount of time to the process. For small companies, a manual method of entering start and stop times on a spreadsheet may save money and serve as a convenient method of tracking time.
Barcode scanners, biometric scanners, and retina scans are popular with larger companies that like to utilize advanced technologies in their daily business. With a barcode scanner, every employee carries a badge and swipes it on a wall mount or door mount card system to gain access to a room or a specific department. This is a useful way to control access to various parts of the building and an excellent way to track where an employee is within the company. Biometric scanners use fingerprints as part of a time clock system to verify that the actual person clocks in. Some systems also offer a face recognition option to eliminate the need to touch the unit and potentially spread germs.
The equipment for this type of time tracking can be expensive, and it may not be necessary for a small business. You can often keep track of your employees without the technology, or you can find more cost-effective options.
Online timesheets allow your employees to track their hours electronically. Depending on the program or app you choose, employees may key in hours manually, sign in on an in-house computer, or use an app to clock in remotely. Some timesheet programs allow your employees to enter expenses, track mileage, and assign their hours to specific projects or clients.
Regardless of the exact program you select, online timesheets save time for your human resources and accounting departments. Rather than manually entering information from paper timesheets, these employees simply need to review the electronic timesheets and use the information to cut payroll cheques. This process also reduces data entry mistakes. Additionally, online timesheets save all the information entered by your employees. If there’s a dispute about hours, you simply need to turn to the audit trails of the timesheet program. The detailed documentation can also be useful at tax time. To maximize the potential of your online timesheets, you should look into programs that sync with your accounting software. For example, TSheets Time Tracking syncs with QuickBooks Desktop, Online, Online Plus, Pro, Premier, and Enterprise. When you can sync information from your online timesheets to your accounting software with a single click, that simplifies and saves time with payroll and job costing.
Whether you’re hiring a remote team to create your new website or subcontracting freelance electricians for construction projects, consider implementing a time-tracking app to simplify the billing process. Programs that automatically track time are ideal when you’re working with computer-based freelancers. Timely lets you schedule regular screenshots of remote workstations so you can check in on how employees or contractors spend their time. It also automatically detects idle computers for accurate timekeeping, but automatic trackers like Timely don’t always integrate with your bookkeeping or accounting program.
Utilizing QuickBooks Time Tracker
An easy method of time tracking is to track employee hours in QuickBooks. Employees can log in with a computer and an internet connection to enter time and expense reports from anywhere. All you have to do is activate the function from your account settings, which provides users with time entry-only access so they can’t see account information or other features of the program. With a single license, you can add as many employees as you like. This time-tracking feature works in conjunction with payroll invoicing, so you can automatically generate and print payroll cheques or export the information to your payroll provider.
Choosing a Time-Tracking App
You can also use a separate app on your smartphone, tablet, or computer that integrates with your QuickBooks software. This lets you choose an app with the features you want while enabling the data to transfer automatically into your accounting system. For example, Boomr Mobile Time Tracking appeals to businesses with a mobile workforce, while Time Tracker + Billing helps with time tracking for multiple employees and generates invoices based on the hours logged. Apps such as Knowify for Contractors track hours and organize schedules, but this app also features benefits designed just for contractors, such as job costing reports, progress invoicing, and project management tools.
Invest some time into finding the right time-tracking app for your needs. In some cases, you may want a simple timer to track just your own hours. In other cases, you may need an app that multiple employees can use to sign in and out or add expenses as needed. Luckily, most apps offer a free trial period so you can test out their features before signing up for the service. Also, make sure the app syncs with your QuickBooks accounting software so you can streamline payroll and invoicing. Keep in mind that some apps may sync with QuickBooks Online but not with the desktop version of the software. Finally, make sure the app is user-friendly so your employees can easily adopt it.
Consider using a cell phone application that uses GPS to track and monitor employee hours when they’re away from the office. This type of mobile attendance system lets you monitor locations legally so you can confirm the hours logged by the individual. The GPS starts monitoring movement when the employee logs in for the day and stops when they clock out.
There are also several mobile apps for keeping time cards that serve as a basic check-in and check-out tool. Each participating employee downloads the application on a phone then uses it to log in and out for the day while also accounting for breaks. The programs export data in several formats, including through Google Documents and in CVS format for export into spreadsheets. Both applications and the QuickBooks program are ideal for use by remote workers because you can access them from anywhere.
In most cases, time-tracking apps charge a small monthly fee per employee, but pricing structures vary, and you should look closely at the costs to ensure they fit into your budget. In addition to the price of the service, also consider whether or not you need to invest in new hardware. Most time-tracking apps are cloud-based, so you don’t need to worry about storage or processing power. Instead, you simply need a few laptops or smartphones that you can connect to the internet. As an employer, you can opt to provide these tools to your employees. However, as most Canadians own smartphones, you may simply want to have your employees use their own phones. In this case, you need to ensure you meet your legal obligations. In particular, at tax time, you should fill out Form T2200 (Declaration of Conditions of Employment). This simply notifies the Canada Revenue Agency (CRA) about expenses your employees incur as part of their employment contract. This form also allows your employees to claim these expenses on their tax returns.
TSheets Time Tracking
Compatible with QuickBooks, TSheets Time Tracking boasts high user satisfaction. The program allows you to create schedules, and it lets employees clock in and out from anywhere using a computer, laptop, or smartphone app. Employees may even text or call in a code to sign in if they are don’t have a smartphone or are in an area with no cellphone coverage. GPS capabilities allow you to check on the location of your workers in the field, and the dashboard shows you instantly who is working, where they are, and how many hours they log. With the tap of a button, you can sync your workers’ hours to your accounting software. This eliminates mistakes related to manual entry, saves time, and streamlines your payroll process. The app starts with a free trial so you can test it out, and if you like it, the service is available for a monthly fee.
TSheets also supports shift scheduling. To schedule shifts in TSheets:
- Install the TSheets Scheduling add-on if you don’t already have it.
- Click Manage and select Schedule to access the schedule calendar.
- Double-click a cell in the schedule calendar.
- Click Actions in the top left corner and select Add Shift.
- Choose the start and end times of the shift.
- Customize the shift by adding a colour, a job description, and an employee.
- Click the Publish button to publish the shift information to the calendars of the assigned employee.
- The assigned employee receives a notification of the shift assignment.
Get My Time
With Get My Time, your employees can sign in using a browser on their laptop, computer, or tablet, or by using a smartphone app. The app has a dashboard that allows you to see who’s on the clock or when they’ve last punched out. In addition to basic timekeeping features, Get My Time also offers expense tracking features and tools that allow you to assign employees to specific projects or teams.
Fanurio lets you track hours manually or with a timer, but this app also tracks expenses and travel costs. You may divide expenses into different project or client categories, and you can code projects as billable or unbillable. This app also generates invoices and expense reports. For example, you can use this app to track costs and time for your internal records while you research a new product. This isn’t a smartphone app, but it’s compatible with Windows, Mac OS, Linux, and Unix on laptops and desktops.
Timesheet is a time tracker with a lot of fun features. You can track hours based on different rates and add expenses, such as mileage or travel costs, to each project or bill. The app is free, but you can upgrade to the premium version for a fee. Additional features include voice command, so you can start the app without taking your phone out. You can also import customer calls and convert them into billable hours and attach documents and notes to each file. One of the most compelling features of Timesheet is that you can set up the timer to start or stop based on your GPS coordinates or when you’re in range of a certain Wi-Fi network.
This app also offers a free trial and then charges by the month. It can work for individual freelancers or for small business owners with several employees to manage. You can track hours based on the client, project, or task, and a simple toggle button makes it easy to jump from tracking one project to tracking minutes for another project. This web-based time-tracking software works on computers, laptops, and smartphones, so you and your employees can track your hours from anywhere. Budgeting features allow you to set goals and see exactly how many hours you devote to a project, while a range of visual reports gives you the insight you need to make decisions about time management, employee productivity, payroll, and similar issues. Finally, you can create invoices with the tap of a button using Minutedock, and syncing your data to QuickBooks is just as simple.
Syncing Apps With QuickBooks
After you choose an app and start using it, you need to sync it with your QuickBooks software. Most apps have an automatic feature that makes this process easy, but in some cases, you have to download an additional app that facilitates communication between your time-tracking app and your accounting software. Once you sync the app to your software, you can easily create invoices based on hours logged or generate payroll cheques. For example, if an employee logs 30 hours on a time-tracking app, when you sync the app to QuickBooks, it can automatically generate a cheque to reimburse your employee for that time. Similarly, if you have hours coded by project and an employee logs 10 hours on a certain job site, you can ensure the software notes those costs on the correct invoice. This saves you time and eliminates mistakes associated with manual entry.
If you have hourly employees, you may want to use banked overtime instead of paying outright for overtime. In terms of dollars, it costs you the same, but the employee might prefer this benefit over pure cash. Banked overtime, or time-off in lieu, describes paid time off that’s earned through working overtime hours. When employees work overtime, they earn 1.5 times their hourly rate. With banked overtime, employees earn 1.5 hours of regular pay time off for each hour of overtime worked. Economically, these two options are equal for you as a business owner, but having paid time off might be more important to some employees.
You and your employee should agree in writing when they can take the time off, say within three to six months of the week they work the overtime hours. You can choose to extend the period in which they can take time off through a collective bargaining agreement. You can use customized agreements between an individual employee and you, or you can set up a group overtime agreement covering all employees.
Canadian law allows you to offer banked overtime regardless of where in the country your business is located. Note, though, that Ontario has provincial laws regarding banked overtime that you need to know about and follow if your business is located in the province.
To offer banked overtime to your employees, all you need to do is track their overtime hours just as you normally do. Then, you can convert the overtime hours to paid time off, which helps you calculate how much time away from work they accumulate.
Incorrect Time Tracking
Whether it’s intentional or accidental, sometimes employee time-tracking records don’t line up with the actual amount of time worked. It can be difficult to recognize discrepancies, especially when an employee works from a remote location, but if you do notice a problem, it’s important that you address it.
Time clock errors aren’t always the result of employees intentionally misleading you. Unless you’re positive that the mistakes are due to purposeful dishonesty, it’s important that you handle time-tracking mistakes as if they’re just that: mistakes. Falsely or even justifiably accusing an employee can severely damage employee relations, so be sure to tread lightly while still remaining firm.
The best way to handle time-tracking issues is to prevent them from happening in the first place. One of the most common errors is not having and consistently enforcing an attendance and time-tracking policy. Your employees should know exactly what consequences to expect if their time tracking is off. Of course, there’s a difference between an honest mistake and intentional deception, so make sure your policy distinguishes between the scenarios. When employees know what’s at stake, they’re much more likely to be careful when punching in or out.
Another common employee tracking error is not following through with discipline. If one employee sees that a team member gets away with falsifying records, they might be inclined to do the same. Sometimes even honest mistakes require discipline to prevent them from occurring again or to set an example. That doesn’t mean you need to terminate an employee or take other drastic measures. A suitable punishment for an honest error is simply requiring the employee in question to check in with a supervisor when clocking in and out for a predetermined amount of time.
It’s absolutely necessary to discuss time-tracking issues with your employees. Address the situation as quickly as possible, and be kind but firm. Consider upgrading your time-tracking software to reduce errors further. As long as you communicate with your staff effectively and provide a reliable way for them to track time, you should see a decline in time clock errors.
Time tracking gives you documented proof of an employee’s hours, which eliminates guesswork on paydays. This keeps employees satisfied, and it ensures your business maximizes profits by not spending more than you have to. Consider analyzing the various methods of time tracking to discover one that works best for your company size, and pair the system with your accounting software. The QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage business on the go. Download the app.