How effective time tracking can benefit your business

Time tracking is an extremely valuable resource for all businesses, particularly small operations with limited resources and little room for error. Despite time being crucial, it's still easy to lose track of. Without consistent time tracking, businesses risk falling behind in several areas, such as payroll, client billing, and productivity. 

Accurate time tracking shouldn’t just be about logging hours, as it can also have a range of additional benefits, such as managing workloads and making informed business decisions. Additionally, time tracking can play a vital role in streamlining operations and avoiding issues, including billing disputes, missed deadlines, and controlling budgets.

In this blog, we’ll discuss the key benefits of time tracking and share suggestions on how to create this policy and what to keep in mind.

The business benefits of time tracking

A range of positives come with accurate time tracking, which can help support your business and its growth.  

Improved payroll accuracy

Time tracking can help with payroll accuracy, ensuring that employees on hourly wages are paid correctly for the work completed. If time isn't tracked correctly, this can result in payroll errors, such as overpaying or underpaying, risking disputes that take time to resolve. Timekeeping correctly can help avoid mistakes, save time, and ensure payroll runs smoothly. 

Transparent client billing

For client-based businesses, transparent time tracking can help demonstrate the work you’re charging for and that your fees are fair. Accurate time logs can also help settle any potential client disputes.

Fair workload distribution

When your team is tracking time, it helps make assigning projects or tasks easier and fairer, as you can clearly see who has the most and least available capacity. Evenly distributing tasks and projects can improve morale and productivity and keep burnout at bay. 

Better forecasting

Time tracking can help businesses make more informed decisions. This data can provide a realistic understanding of how long certain tasks take, which can be vital when it comes to planning and budgeting. Additionally, it can highlight when you might need to hire more staff and in what areas. 

Increased accountability and performance visibility

Time tracking can be positioned as a tool for support and growth. This process can help managers and business owners identify any potential bottlenecks and clearly see where support is needed. Time tracking can also give employees a greater sense of awareness and make them feel more accountable for their output.

The risks of not having a time-tracking policy

Not having a clear policy for time tracking could create problems that affect morale and productivity. Some common challenges that teams may face include the way they’re tracking time. Some employees may create manual time tracking sheets, others may rely on memory, and others may not track their time at all. This inconsistency makes it difficult to gather accurate data and can lead to errors. 

Ineffective time tracking can also result in missed billable hours, which can directly impact revenue and create disputes with clients. Lack of time tracking can also lead to internal disagreements and cause employees to lose motivation.

Key elements of a time-tracking policy

There is much more to creating an effective time-tracking policy than simply telling employees to track their hours. Employers must provide clear expectations and guidance. Effective time tracking policies should include:

Approved tools and platforms

Regardless of how you want your team to track their time, whether it's using spreadsheets, a digital app, or an integrated platform, it’s a good idea to use one platform across the business to make collecting and analysing data simpler, avoiding any confusion.

Clear expectations

It’s important to set expectations from the get-go to ensure consistency across the team. Make it clear what employees need to track; is it just billable time or non-billable time too? Should breaks be logged? Should time be rounded up or down?  Also, clarify how often employees should update their time logs, whether that's daily or weekly, and what they need to include, such as document links and a detailed description.

Roles and responsibilities

It is helpful to clarify who is responsible for each aspect of time tracking. For example, employees might be responsible for logging their own time, while managers often review and check time logs, making these roles and responsibilities clear will help to reduce any potential misunderstandings and ensure accountability.

Communication

As with all policies and work expectations, communication is key so everybody is on the same page. Some ideas on how to communicate this policy when it’s new and during staff onboarding include team meetings, training sessions, written guides and FAQs. It is a good idea to explain the reasons for this policy, to grow the company, support project planning, and team development, not to micromanage. When communicating a time-tracking policy, it's also important to clarify the repercussions if time isn’t logged consistently or accurately, such as reminders, follow-up conversations, and performance reviews. 

Creating and implementing a time tracking policy that works

To ensure the team understands and accepts how to effectively track time, it’s a good idea to involve employees from the start to provide input in the process. Ask for feedback, listen to any concerns, and adjust accordingly where possible. Having a collaborative approach can reduce pushback and help employees feel more open to the idea. 

Try to keep the process as simple as possible and opt for a time tracking tool that is user-friendly and easy for all team members to use. Once it’s up and running, review both the tool and policy often, refining where possible.

How QuickBooks can help

QuickBooks Time offers time tracking software that simplifies your business, allowing employees to clock in and clock out, add timesheet details, and track projects. This software also supports scheduling, team management and reporting, allowing employers to stay informed and gain valuable insights in real-time, to help with business decisions and growth. 

Take control of your time and boost your business

Time tracking is more than just a company policy, as it is a powerful tool that can help with business operations and growth.

Setting up a time tracking system doesn’t need to be complicated. Keeping employees informed can build trust, avoid confusion, and increase accountability. Having this system in place can help businesses reduce costly errors, such as inaccurate payroll or missed billable hours and allocate resources effectively. 

Implementing an effective time tracking policy is an investment in profitability, productivity, and peace of mind.

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