Whether you are an employee or a business owner, time tracking at work has many benefits. Freelancers can 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. Track Invoicing and Time Card Reporting
Let’s face it, your time is valuable, and you need 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 ruin a relationship is due to a dispute over money. Suppose you have a good customer that you are doing work for and have been accidentally overcharging them and didn't realize it. In that case, this could cause them to end business relationships with you or your company.
Employees should be having their hours logged accurately. When hours are correctly logged and reported, it reflects accurate time card reporting. These hours contribute to the invoicing and payroll process. If anything is incorrect, then it can harm the company’s profitability. Avoid this by using a time tracking tool that will allow you to reflect your working hours for a proper invoice and time card report.
2. Track Payroll Accuracy
Many companies rely on accurate payroll to keep their business operating. It is essential to learn how to decrease payroll errors, and the slightest 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 overpaid amount.
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 fewer days off. 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 companies break the law. Whether this is intentional or not is a different topic. However, when it comes to proper time tracking, it is imperative 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 2 years?
In addition to keeping employee time cards for two years, an audit may be performed, resulting in a lawsuit if a small business owner cannot provide the requested documents. An article by on the clock 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 critical to help protect a company’s future.
4. Track 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 utterly worry-free like you should be.
Modern employee time clock systems allow you to check in to see who has punched in and out. By tracking who’s on the clock, 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 not to commit time theft. Holds employees accountable by knowing their boss can quickly and conveniently bring up the data needed to see if they are working when they are supposed to be working. One of the most significant benefits of this is that it saves a business owner money from paying an individual for the time they did not work, thereby improving profits.
5. Track Project and Job Costing
Do you have jobs and projects that you need to know how much time is spent on each one to bill correctly? Maybe you have a few different projects going on, and you are starting to confuse or forget how much spending on each job. You may be shorting yourself out of a lot of money if you are not tracking your time. OnTheClock offers a solution for employers and employees to hand enter and adjust hours worked. This is a beneficial feature for billing jobs and monitoring how much time was invested on a specific job.
It is also essential to track your employees’ time for each particular job to gauge whether you are staying within budget. If you bid on a job for 'x' amount of hours and start 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 initially anticipated. Avoid 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 more significant issue than most would assume.
Some of the four most common paid time off categories include, but aren’t limited to:
Each employer is different, and some employees may earn their PTO from accruing time or the 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, 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 better understanding how PTO can be tracked at work. No matter how you may choose to distribute paid time off, it is vital to have it correctly 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? Or how about having an understanding about projects you have to complete for the day. Using a project management app would certainly be a solution for improving your schedule.
A time tracking system can also offer you a way to schedule employees to know who will be working and at what time they will be clocking in. It also allows you to keep employees’ hours worked balanced according to your business plan.
Say you have 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.
Grow Your Organization by Tracking Time
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