Are you wondering if time tracking is really worth it? If we are being honest, it is a practice that takes up some time and effort and brings another task to your employees’ workload. Additionally, you need to be truly careful when analyzing your reports, and even that can’t guarantee success.
Yet, many companies have established this activity as one of their most important business practices. We are here to show you exactly why time tracking is important and give you some tips for time tracking practices that will bring you the best results.
Explaining time tracking
Right now the market for different time tracking platforms is booming. This is largely true because of the 2020 pandemic. Many businesses had to adjust their work to a new remote workforce, and that is when the true values of time tracking became apparent. It is also made the modern meaning of time tracking apparent to a wider audience.
Time tracking benefits come from the fact that the process of time tracking through a dedicated software solution also brings insights into other aspects of any business. Modern time tracking mostly doesn’t rely on a simple clock-in and clock-out principle. Instead, the software or timesheets also explain what exactly has been done during work hours of any given day.
In other words, modern time tracking solutions don’t only show how long an employee has worked. Instead, they point to and analyze trends in any business. These trends can regard employees’ workday structure, but also project health and progress, relationships with clients, costs of different projects and resources invested in them, etc.
All these factors explain why time tracking is important, but we wanted to bring you real examples as well. So, without further ado, let’s see what are the true time tracking benefits.
This is one of the biggest time tracking benefits, as well as one of its basic goals. The records can be proof to you as an employer but also be used in invoices as a record of billable and non-billable activity.
There are multiple ways to record any employee’s work. yet, some are considered better practices than others. For example, some companies will track employee movement or even record them during the entire workday. The less invasive, but still intrusive option is taking screenshots of your employees’ computers or tracking their keystrokes.
These methods aren’t as effective as they may seem at a glance. In contrast, less intrusive, trust-based methods of collecting data are better received and encourage real positive changes. As your employees see you trust them when it comes to reporting, their reports will be more accurate and paint a realistic picture of the way projects go in your company.
There’s no reason to lie – each business has the ultimate goal of making a profit. Time tracking platforms offer numerous ways to keep track of your finances. They also provide reports that point to good as well as questionable business practices.
Keeping an Eye on Profitability as a Time Tracking Benefit
Each company has the goal of making its projects profitable. This means that the costs of a project (the resources, time, and pay for your employees) have to be lower than the price the client will be paying. Time tracking allows you to gather real-time data that can show warning signs of your costs being higher than your profit. Here are some examples of warning signs:
- A project is taking more time than expected, so the price of a working hour drops
- Materials and other resources cost more than you’ve accounted for
- The client is expecting certain activities not to be charged even though they are related to the job
You can solve these issues before they become a serious problem, and make sure you don’t undercharge. You can negotiate your contract and apply a solution that will prevent you from losing money. This can be done by negotiating your contract, either by raising the price or including additional fees with different rates.
Similar to the previous example, it is also important to keep an eye on your projected budget and the actual costs of the projects. One of the biggest reasons why time tracking is important is the ability to see if your costs are larger than your projected profit.
Of course, you can do this manually, but time tracking provides complete reports in real-time. Hence, it can also show whether your methods of fixing your budget are working or not. You can simply eliminate the step of calculating and recalculating, as time trackers will do it for you.
Accurate and Automated Billing and Invoices
While some clients are more relaxed when it comes to billing, it is always a good practice to have the possibility of an itemized invoice. A good time tracking software makes creating these documents simple, and even accounts for different rates if your contract calls for them.
You can avoid bargaining and unpleasant exchanges with your clients by showing them exactly how much time, effort, and resources went into the finished product.
Pricing adjustments and estimates
Changing the rates, or even the way you charge is a normal part of growing as a company. You need to adjust the estimates to actual costs and the methods you use. Yet, you need to do it while remaining in the competitive price range.
If you make time tracking a regular business practice, you will be able to project the costs and profit among similar projects accurately. You can apply this principle to different aspects of projects as well. For example, you’ll know how much a type of task takes time-wise, as well as how long its different elements take to complete.
Understanding resource demand
Time tracking benefits include seeing which aspects of the business process need more attention. This can mean improving the work environment, updating the tools employees use, holding more meetings with the team to find a solution, etc.
Naturally, certain departments will have more pressure on them. The same can be said about team members, since, for example, senior employees have more responsibilities and a larger workload than their junior counterparts.
All these factors have real-life consequences, and they can hinder your business. That is why time tracking is important, as it will point you to these problems and enable you to take steps toward fixing them.
Improvement to Work Processes and Productivity
This is one of the best benefits of time tracking, as it results both in personal and company improvement. Understanding how an individual or a team functions during their workday can help them restructure their time to be able to use their most productive periods to the maximum.
Many freelancers decide to track their own time as well. This may seem obsolete, as they don’t have a manager to report to. Yet, they still decide to track their time and run reports. That is because they recognize the potential that lies in understanding exactly how you work. Having an insight into the rhythm of your day and most productive periods.
To put it simply, no one can work for eight hours straight. Especially not every day. Some people are at their most productive in the morning, while others need a couple of hours to start their day. Knowing when to focus on the most important and time-consuming tasks and when to allow yourself a break is crucial to increasing productivity.
Knowing your own strongest suits is a huge advantage. However, this isn’t where the time tracking benefits stop. Understanding how your teams work can help you restructure their days and allow for breaks when they’re actually necessary.
Implementing more flexible work practices can bring company productivity up. This is true since this approach will allow every member of your team to fulfill their potential. They will also not feel as pressured as they would with a stricter schedule.
Of course, a relaxed environment simply isn’t possible in every company. You should think about this approach in the context of your industry and client demands and adjust it accordingly.
Not all tasks are equally important. Good time tracking software makes the distinction between tasks that need to be done regularly and ones that you can automate or skip altogether.
The most obvious example of these tasks is time reporting itself. Different time tracking software solutions offer a variety of options on how to prove how an employee has spent their time during a workday.
Whether you decide to use an automatic timer, a system that relies on screenshots and keystroke tracking, or a trust-based timesheet program, your employees won’t have to create tedious reports every day. Instead, they can use the software’s features to provide crucial data.
On the other hand, different administrative actions can be automated too. For example, the software can lock previous reports after a certain time so that users can’t edit them. Again, this would be a tedious everyday task that – counterproductively – takes some time to complete. In other words, tracking time can help your employees save time, but also keep them from forgetting to do a menial, yet necessary task.
Team and project management
Knowing whether a team needs more resources and a better workload balance is just one of the benefits of time tracking. Having a deep understanding of how your teams work and how long they take to finish their portion of the work can help you manage them better.
Transparency and accountability
Many time tracking platforms allow entire teams to see all their current tasks. This means no one can slack unnoticed. On the other hand, the overachievers who work beyond their abilities will understand what is expected from them. This, further, will prevent them from overworking themselves and crashing down with burnout.
Working in an environment where it is clear who is working on which task and their progress is evident helps improve the general atmosphere in the company. Employees are more likely to accept their own share if they can see the workload is balanced fairly among team members.
Setting objectives and tracking progress
Setting objectives, especially time-related ones, means a lot of guesstimating in the beginning. As your company grows and gets more clients, you will be able to predict the time and resources you’ll need with more precision. Yet, this process can become quicker and more accurate if you utilize the benefits of time tracking.
Previous projects all reflect on your current workload, and your current projects are an insight into your future ones. This means you will be able to make realistic estimates of how long a project will take and the resources you’ll have to invest in it.
One of the time tracking benefits is the ability to compare your current active project with your previous ones. If a project is more taking more time or resources, the time tracking software will record these anomalies. Then you can consider your options on how to keep the job profitable for you and satisfactory for your client.
Catching these discrepancies as early as possible is the key to staying on top of your game. Time tracking will allow you to do so without the constant need to calculate and observe.
Of course, as we have previously mentioned, you can’t expect the same speed and capabilities from every employee. Hence, you’ll need to make adjustments to the schedules as you go, but time tracking can give you a baseline. Then, later on, you can use this data for employee progress assessment as well.
This practice is also among the more positive ones in business. Namely, the employees who don’t care about their personal development are rare. Having a conversation with their superiors and knowing their hard work is noticed and appreciated will mean a lot to most employees.
To put it plainly – noticing and pointing out an employee’s progress signals that you care about them. this applies both to their professional and personal development.
This is a great way to let an employee know their employer appreciates them and sees them as a person and not only a moving part of their business. In return, the employee will have the motivation to work as hard as their abilities let them.
Finally, it will also mean the employee won’t be looking for another job opening soon. In other words, you will increase employee retention and, by nature, cut down the costs and time needed to hire and train new workers.
Reviewing and comparing past and current work
We have been talking a lot about the monetary aspect of time tracking. Even though the financial benefits are obvious and easily provable, there are even more benefits of this practice. To put it simply – time tracking creates a catalog of projects. This catalog showcases employee productivity, costs, and pricing, but also points to the changes you’ve made along the way.
You don’t always have to focus exclusively on your current jobs. Taking a broader view of your past practices and jobs can help you make sure you’re on the right track. Comparing the ways you’ve changed the way you work, and seeing the concrete results of the changes will explain positive business practices and the steps you should take in the future.
We hope our article has helped you if you wanted to learn why time tracking is important. As you can see, this practice can improve your business practices from start to finish. The elements you can observe include:
- Planning projects
- Time and resource estimates
- Tracking project progress
- Managing your teams
- Improving work conditions and company morale
- Improving both personal and company practices
- Staying on track budget-wise
- Billing accurately and invoicing
- Revising all aspects of your business accurately
Time tracking is a business practice that can bring many positive short and long-term changes to the way you conduct and observe your work.
Whether it’s on the financial, productivity, or planning level, or if it concerns the entire company or your personal habits, using time tracking software is proving itself to be one of the most important new business practices.
We are aware that time tracking isn’t a popular tactic in general. Yet, we also know this comes from the employees’ resistance to micromanaging.
The importance of time tracking comes from the versatility of its features. You are supposed to utilize all of its potentials. This is done by seeing it as a long-term solution rather than a way to control your workers’ every move. The difference between these two approaches will be obvious both when it comes to your company’s profit and your employees’ mood and satisfaction.