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How a timesheet template can help you grow your business
If you’re operating a small business, then you probably have salaried and hourly employees.
For hourly employees, you may be wondering what new and efficient employee time tracking software is available. The concept of filling out time cards to clock in and clock out still exists, but it looks a bit different than it used to. It’s fully digital now.
Small business payroll is a very important part of running a small business, and you want to make sure your payroll operations are accurate and efficient. A time card template can help keep track of hours worked during a specific time period or the amount of time spent on a specific job.
Having an effective time management software helps every worker feel like they’re being fairly compensated. If you employ hourly employees or contractors, then creating employee timesheets can be the way to calculate payroll.
The more user-friendly the employee timesheet is, the greater chance you have of accurately capturing hours for your employees. Moreover, you also want to make sure that filling out timesheets is not a time-consuming process for you or for your employees. When a task takes a lot of time, it takes attention away from revenue producing activities.
Even if you have salaried employees, timesheets can also help you with business planning, productivity and resource allocation. Implementing a timekeeping system can encourage employees to avoid time-wasting activities like browsing social media. This could help your business’s bottom line.
Why are employee timesheets important?
Tracking employee hours for accurate pay is the most obvious benefit of a timesheet. However, employee timesheets can also provide detailed insights into your business. You can maintain online timesheets using Google Sheets or Microsoft Excel templates, or you can use cloud-based software to record time and store timesheets.
Your employee timesheets can help you better understand your employee productivity, your business costs and even your business model.
Timesheets can be modified to give you deeper insight into your business. Here are three things timesheets can help you improve.
An employee timesheet captures the number of hours your employees work. But with an employee timesheet template, you can also track how your employees spend their time. If you discover a disproportionate amount of hours spent on a particular project over others, then this may indicate ineffective use of resources or poor performance.
Tracking activity-specific work on a timesheet can provide insights into employee productivity, allowing you to better allocate business resources in the future. For instance, if your employees are spending too much time on administrative tasks when they should be spending that time on more client-related projects, then you can investigate why.
2. Costs of doing business
Similar to tracking productivity, tracking time per activity can uncover unexpected costs of doing business. Perhaps employees are spending time on tasks that are not productive for growing your business. It could be because the technology is not robust enough to perform tasks quickly, or it could be because improper focus has been placed on unnecessary activities.
Unless you understand the time going into each work activity, you won’t be able to offset those costs in the overall price of your goods or services.
How do you land on a number to quote clients? Do you consider the time spent by your employees? If not, you should.
Pairing hours worked with a specific activity is helpful for overall job costing, and thus, adequately quoting clients. An effective employee timesheet template should help you keep track of hours, activities and projects.
Components of an employee timesheet
Timesheets can be as simple as a Google Sheets template or an Excel timesheet template and formula to calculate hours worked. They are managed through enterprise-grade software that automatically tracks time-based on employee activity.
QuickBooks Time cloud-based time tracking solution within QuickBooks that provides everything from unlimited live phone & chat support to GPS tracking. Regardless of which system you employ, every employee timesheet should include some common elements: time tracking mechanisms, hourly rates and a calculator.
1. Time tracking software
Time tracking seems straightforward. An employee records how much time he or she works and enters the number in the timesheet. However, if you add a little more colour to your time tracking mechanism, you can gain better business insight.
For instance, tracking the activity or project where employees are spending their hours can help you understand productivity, problem areas, need for additional resources and other planning elements (as mentioned earlier).
Additionally, your time tracking system should include consistent time intervals. While employees are typically paid an hourly rate, time can be tracked at different intervals. For instance, law firms typically accrue time billed to clients in six-minute increments.
2. Hourly rate
A timesheet is a system for employees and contractors to record how much time they work and enter the number in the timesheet. An employee timesheet template should include the regular hours and overtime hours worked. Some projects or activities might warrant a higher or lower hourly rate.
A good employee timesheet template provides segments of hours worked on each project. You, as the employer, can use these segments to pay hourly rates on a per-project basis. For instance, you can use the timesheet template to break it out into different projects and allow employees to input the associated hours that went into each project.
This will give you better insight to see which project was the most time consuming for your employees and how each of those projects impacted your bottom line. You can easily alter the timesheet template to suit your business needs.
3. Timesheet calculator
The timecard calculator brings both the time tracking and hourly rate components together for a gross payout amount. The timesheet calculator automatically aggregates any regular hours and overtime hours worked during a pay period. It then applies the appropriate pay rate and multiplies it by the total hours worked.
The total will be an employee’s gross pay. Taxes, benefits and other deductions will need to be subtracted from the gross pay amount. That final amount is the amount that will hit the employee’s bank account.
Timesheet best practices
Responsibility for timesheets ultimately falls on the business owners. However, maintaining the data entry component of a timesheet for all your employees isn’t very efficient. You can instead create company policies that require employees to log in and input their own hours. Then you can sign off as a manager (or owner).
Time tracking, minimum wage compliance, overtime payments, record keeping and classifying your employees correctly (eg. hourly or salaried, employees or contractors) is your responsibility as the employer. If you fail to track pay per federal and state laws, the consequences can be heavy. Wage and hour lawsuits commonly appear as class action suits that can drain your company.
The exact details of your time-keeping process will vary based on the method of your employee timesheet as well as the recording period you choose (eg. daily, weekly, biweekly, semi-monthly or on a monthly basis).
However, here are some best practices that you should understand.
Make timekeeping a team activity
Make sure to include your employees in time tracking. Remember to encourage employees to comply and to input their hours on a weekly or even on a daily basis. To encourage employees to fill out their timesheets, carve out some time on their calendar each day or each week.
Make time tracking quick and easy
A quick and simple timesheet system can be very valuable for your small business. Employees will find it harder to stick to something that takes too much time out of their already busy day, so make sure that your time tracking system is user-friendly.
You can use time tracking to look at how employees spend their time throughout the work day. To get the most value, you can take a comprehensive look at how your employees are spending their time so that you can improve your operational efficiency. Your goal is to make sure your employees are spending time on activities that continue growing your small business
Make sure all employees are using the same format for dates, times, and project codes so that you can run reports quicker and transfer timesheet data over to your payroll. Ultimately, setting up a great timesheet system that is valuable and user-friendly is a team effort.
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