7 Reasons Why You Should Track Time at Work

Whether you are an employee or a business owner, time tracking at work has many benefits. Freelancers have the ability to document the duration of time they spend on a project while employers can track an employee’s time from clocking in and out. Below you will see some benefits why you should track time when working.

1. Proper Invoicing and Time Card Reporting

Let’s face it, your time is valuable and it is important for you to be compensated accordingly. Say you are a Freelancer and you are creating invoices based on the duration of time you spent on a specific job. Wouldn’t it be nice to know exactly how much time you spent so you could bill properly? The last thing you want to do is shortchange yourself by taking a wild guess at your hours worked.

Another way to look at proper invoicing is avoiding overcharging a customer or overpaying an employee. One of the biggest reasons that ruins a relationship is due to a dispute over money. If you have a good customer that you are doing work for and you have been accidentally overcharging them and they realize it, this could possibly cause them to end business relationships with you or your company.

Employees should be having their hours logged accurately. When hours are logged and reported, it reflects accurate time card reporting. These hours are then used to process invoicing and or payroll. If anything is incorrect then it can harm the company’s profitability. This can all be avoided by using a time tracking tool that will allow you to reflect your working hours for a proper invoice and time card report.

2. Increase Payroll Accuracy

Many companies rely on accurate payroll to keep their business operating. It is important to learn how to decrease payroll errors, and the smallest payroll error could add up to cost big money over time. According to an article by Entrepreneur.com, payroll errors can cost a small business between $4 - $9 every pay period not including the amount that was overpaid.

In addition to keeping your payroll within budget, payroll accuracy also keeps employees satisfied and happy. Happy employees are known to have higher work productivity and take less days off. In fact, an article by Happy Serious Learning reports that unhappy employees are likely to take 15 additional sick days per year.

3. Abide by Department of Labor Laws

Often times companies break the law. Whether this is intentional or not is a different topic. However, when it comes to proper time tracking it is extremely important to abide by the laws. Did you know the Department of Labor requires employers to keep records of employees’ hours worked for a minimum of 3 years?

In addition to keeping employee time cards for 3 years, an audit may be performed which could result in a lawsuit if a small business owner cannot provide the necessary documents that are being requested. In an article by on the clock, it reports the tally of new Fair Labor Standards Act (FLSA) cases has risen above 7,700, a new record. This is a strong indication that employee time tracking is becoming more and more important to help protect a company’s future.

4. Know Who is Working and Who is Not

As an employer, do you ever wonder who is being honest with their time while you are away from the office? Maybe you find yourself thinking about this when you are on vacation instead of being completely worry-free like you should be.

Modern employee time clock systems allow you to check in to see who has actually punched in and out. By seeing who’s in, it will provide you with the details of employees that are on the clock and the time in which they clocked in and clocked out.

This feature also gives the employees a reason to not commit time theft. This holds the employee more accountable by knowing their boss can quickly and conveniently bring up the data needed to see if he or she is working when they are supposed to be working. One of the greatest benefits to this is that it saves a business owner money from paying an individual for time that was not worked, and therefore, improving profits.     

5. Project and Job Costing


Do you have jobs and projects that you need to know how much time was spent on each one in order to bill properly? Maybe you have a few different projects going on and you are starting to confuse or forget how much time that was spent on each job. You may be shorting yourself out of a lot of money if you are not tracking your time.

It is also important to track your employees’ time for each individual job so you can gauge whether or not you are staying in budget. If you bid a job for “x” amount of hours, and it is starting to run over, then your business will be losing money from the additional time worked.  

In addition to losing money from overworked hours, you could find yourself dealing with an unhappy customer because the job is taking a lot longer than originally anticipated. Ovoid this headache by tracking your project and job costing as soon as possible.

6. Tracking Paid Time Off

Many companies offer paid time off to their employees. When PTO is tracked accurately it allows everyone to be on the same page so there is no dispute or questions regarding who took what days off and when. Surprisingly, this is a larger issue than most would assume.

Some of the 4 most common paid time off categories include, but aren’t limited to:

  • Vacation time
  • Sick days
  • Holidays
  • Personal days

Each employer is different and some employees may earn their PTO from accruing time or from time allotted.

Accrued time is when an employee accumulates a certain amount of time per week towards paid time off. For example; an employee may earn 2 hours of PTO for every 40 hours worked. These numbers are just an example, but should give you a better understanding.

Now when an employee has an allotted amount of PTO this means he or she is given a specified amount of days or hours for the year. For example; an employer may allow 10 days of paid time off per year to be used however the employee chooses.

Again, each company is different and these are only examples used for the purpose of better understanding how PTO can be tracked at work. No matter how you may choose to distribute paid time off, it is important to have it properly tracked and documented.

7. Keeping Your Work Schedule in Order

When you think about your daily routine it is easy to see that everything you do is on a schedule. You may wake up, eat breakfast, brush your teeth, get dressed and head out to punch the clock. Whatever the order may be, you are on a schedule. So why shouldn’t your work schedule be the same? Think about it for a minute… when you need your business to operate at its best potential, don’t you think it is important to have the employees properly scheduled to get the job accomplished?

A time tracking system can also offer you a way to schedule employees so you know who will be working and at what time they will be clocking in. It also allows you to make sure you keep employees’ hours worked balanced according to your business plan.

Say you have a group of 12 employees and some of those employees are supposed to work the day shift while others are supposed to work the evening shift. Wouldn’t it make sense to have a formal schedule in place so everyone can be on the same page? This would eliminate confusion and employees going over or under their hours worked.

Enjoy all the benefits that will help grow your company, increase profitability, reduce payroll expenses and much more by signing up for a 30 day free trial with our employee time clock.

a thought From Pearl on 12/24/2018 ...
When employees clock in and out with irregularities how can you make adjustment without altering what they have done. My employee clocked out late repeatedly. On the clock calculated overtime for that employee. How do I fixed that
reply from OTC - Hello Pearl, Sorry to hear about the issue you are experiencing. This sounds like a simple and easy fix in your settings. Please feel free to contact us and we can quickly help you with this.
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