Time Tracking Process (Step by Step) Guide

Time Tracking Process (Step by Step) Guide

September 8, 2022

The time tracking process represents all activities related to employee time tracking. As there are many ways to track time, there are many nuances to time tracking as well.

Historically, there have been many instances of measuring time. However, once the entire world settled on the Sumerian 24-hour system, it was a little easier. That is to say, humans have always yearned to have a way to measure time.

The time tracking process is the natural sequel to this milestone. Even today, businesses are losing up to 7% of their profits due to time theft

time tracking process

What Is a Time Tracking System?

Time tracking systems come in a variety of shapes, sizes, and methods. What they all have in common, however, is their goal.

Namely, from the earliest instances of the time tracking process, the systems were put in place to help business owners, managers, and higher-ups better understand their business. The methods all present the time the employees spend on different tasks.

This information is important, as it can show the employer both their business’s strongest suits and potential issues.

The time tracking process can be a frightening issue. This is especially true if you’ve never done it in the past.

However, the closer you get to the concept, the less scary it is. That’s why we are here to help you understand the process without creating a feeling of hostility even before you start tracking time.

We are here to help you find your way around different time tracking techniques from A to Z.

What Is the Purpose of Tracking Time?

Most employees’ animosity toward time tracking comes as a knee-jerk reaction. Namely, implementing time tracking into your workforce’s daily routine can seem like an attempt at micromanagement.

On the other hand, it can also give the impression of distrust and dissatisfaction. Let’s think about it. Your boss has suddenly decided to make your entire team submit their timesheets. What does this communicate?

However, as scary as time tracking sounds, its purpose isn’t to create a negative atmosphere or punish the employees.

Micromanagement vs Transparency

If you are worried about micromanagement, let’s think about that as well. Some time tracking platforms offer the option of tracking the employees’ computer activity. This can be as detailed as tracking document names, keystrokes, or taking timed screenshots.

However, most employers choose to conduct the time tracking process differently. Most likely, you will either track your time automatically or fill out timesheets.

The point of time tracking isn’t to let the higher-ups know which employees to put on the chopping block. On the contrary, most bosses want to reduce the time they spend managing their employees.

Additionally, the consensus is that time tracking shouldn’t be used to spy, but to help instead. Any organization can benefit from the transparency gained by introducing time tracking.

Namely, team members understanding how their projects are progressing and how much time they’ll take is a benefit to everyone’s planning accuracy.

Time Tracking Methods

Hearing the words Time Tracking in and of itself can create a feeling of resentment. However, once you become more well-versed in the time tracking process, you may find yourself feeling the opposite.

The process itself depends on the time tracking methods your company will be using. There are multiple systems that can be implemented, ranging from clocking in and out to extremely refined systems.

As you can imagine, the time tracking process will depend on the method you are using. So, let’s see how it all looks.

The time tracking methods we will be looking at are:

  • Clock-in and clock-out
  • The honor system
  • Pen-and-paper timesheets
  • Excel timesheets
  • Timesheet software
  • Combined timesheet and automatic tracking systems
  • Monitoring
  • Biometric time tracking

Clock-in and clock-out

This method is most often used in workspaces that aren’t looking for precision when it comes to the employees’ activities. In other words, this system only collects information on arrival and departure times.

Since the employees aren’t logging their activity, this time tracking process relies on accuracy only on the aspect of time. That is to say, the times should be recorded as accurately as possible.

Just how are you going to be as accurate as possible? The technical progress of this time tracking process has helped with that.

The pen-and-paper method

This is one of the earliest types of time tracking. It is very straightforward, and we can all assume how it goes. Still, let’s describe it.

  1. The employee arrives at their workplace.
  2. There is a paper they need to sign. The time of their arrival is either automatically recorded or checked by another employee for accuracy reasons.
  3. The employee goes on about their day.
  4. Once the workday is done, the employee checks out by signing another paper.

If there is no need for any additional details, it is safe to suppose the position of the employee doesn’t require it. In other words, this method is best used in factories or construction firms, for example.

The Punch Card Method

The pen-and-paper method can be very time-consuming. Many lines were formed just to track employee attendance. In other words, work time was shortened. Hence, a quicker attendance system was invented in 1888: the time clock.

This machine worked on the punch-card principle. So, the steps were exactly the same as with the pen-and-paper method, but the process didn’t involve signatures. They were replaced with each employee’s punch card.

The first method that includes punch cards had them simply moved from an “away” column to a “present” column to signify the employee is at their place of work.

This way, the managers could see exactly who was present and who wasn’t at a glance.

The other method included swiping the cards through a punch machine. This way, the management could know at what time each team member showed up.

The obvious issue with the punch card method is the issue of buddy punching. This is the practice of moving (or swiping) a coworker’s card along with your own.

The Modern Solution

Many contemporary companies don’t have the need or the means for a different time tracking process. however, the issues that come with the method aren’t easy to fix.

Hence, a new way to clock in and out came to be. This method usually involves an attendance “kiosk”, which can be a computer or a literal kiosk at the worksite.

The employees, in this case, have an application on their phone and swipe the said phone to a device that registers their attendance. Each app user has a unique key, so the machine can’t be ‘’tricked” into logging an absentee in.

These types of apps sometimes also offer a geo-fence. That is to say, an employee can check in only while they’re at a specific location.

As most people wouldn’t go as far as giving their coworkers their phones for the entire day, the issue of buddy-punching has been solved with this technology.

The Honor System

The honor system is possibly the simplest one when it comes to time tracking. At least when it comes to the employees. Managers, on the other hand, could have different opinions.

Here are the steps:

  1. The employee works on a task until they’re done with it.
  2. They look at the time and make as accurate an estimation as they can.
  3. They report to their manager with this estimation.
  4. The manager calculates every team member’s salary based on these reports.

There are two important issues with this time tracking process – accuracy and manager exhaustion.


The employees aren’t obligated to provide any proof for the time they spend on a task. This means that they must rely on guessing the true time a certain activity took.

As you can imagine, some will be wildly inaccurate by accident. Others, on the other hand, will do it on purpose to be paid more.

Overworking the managers

Imagine being the manager in this situation. All responsibility for calculating the salaries and keeping accurate records is on you. Probably doesn’t feel too easy. Especially if you’re managing a large team.

This method also takes a lot of time on the managers’ side. That is to say, they will probably be too overwhelmed with keeping track of each team member’s activity to have the time and capacity to pay attention to their other tasks.

Even though we said the honor system is the easiest for the employee, it can become frustrating for them as well. No one likes going to their manager for every little activity.

This is why the honor system is falling out of favor. Moreover, it has been replaced by time tracking software solutions in many companies

Old School Timesheets (Pen-And-Paper)

This time tracking practice is still popular among smaller teams. It is the simplest form of timesheet reporting, as it doesn’t require the employees to use any technology. If we’re not counting the pens and papers, that is.

Here is how this time tracking process looks:

  1. The employees time themselves on different tasks. this can be done through the office clock, a watch, or a mobile phone.

1a. The employees receive timesheet templates with dedicated space for different important information (i.e. the task, project, client, hourly fee, etc.)

  1. Once they finish a specific task, they note the time and write it down.

2a. There is also the option of accumulating the information during the day and writing it down after all planned tasks are done. This way, the employees don’t have to focus their attention on the timesheets repeatedly during the day

  1. The managers receive the timesheets, review them, make changes where necessary, and calculate employee salaries

This time tracking method makes note of the trust the employer has for their employees. However, reviewing the timesheets is, yet again, time-consuming. Additionally, you will be relying on the employees’ memory. In other words, these types of timesheets aren’t as accurate as some more complex systems.

Automated Timesheets (Excel and Timesheet Software)

This time tracking process is identical to the previous one. The only difference is the tool used to track time.

Excel Timesheets

Excel allows employees to add as many columns as they want to their timesheets. This is a great option for companies with different departments dealing with vastly different tasks.

An issue with this method arises when certain employees don’t have access to computers. They include manufacturing and cleaning staff, contractors and builders, etc.

Excel offers a great variety, but the issue of accuracy isn’t fixed either.

Timesheet Software

Timesheet software is similar to Excel, as it is a computer program you can track your time through. However, dedicated software is created for a single purpose – tracking employee time and tasks.

While Excel gives many general options, these platforms allow more customization related to time tracking specifically. In many of them, managers can create templates for employees.

These templates can be customized down to the specific position, or more general, so all team members can use them.

Usually, time tracking software is simpler to set up and use for time tracking than Excel. This is also partially due to Excel’s tendency to fumble up entire columns if a single mistake is made

Tracking Systems that Combine Timesheets and Automatic Timers

Currently, this time tracking practice is among the most popular ones. This is true as it combines the accuracy of the clock with the trust factor of timesheets.

Here is how our platform handles time entries:

  1. Each team member is given a role and permissions.
  2. Managers and authorized employees create the main elements for time tracking – projects, clients, and tasks.
  3. Additionally, managers set the employees’ hourly billing rates. (the employees can manually edit them for certain projects if a different fee has been agreed upon).
  4. The employees start tracking time on a specific task by clicking a button. A time clock measures the time from that point on.
  5. Once they’re done with the task, the employee clicks the button again to let the system know.
  6. Time Analytics creates time entries based on the tracked time and logs them in the timesheets.
  7. The employees can make changes and manually add entries they haven’t had the time for, for example, client communication.
  8. The program delivers a wide variety of performance reports to the managers and allocates the costs to the clients automatically as the employees log time spent on their projects

As you can see, the hybrid solution of automatic and manual entry is great when it comes to covering all your bases. That is why Time Analytics uses it, among other things.

Monitoring Tracking Systems

This type of time tracking solution sounds great, and it can be a huge asset to your business. After all, it completely eliminates human error.

Yet, these systems also have their own issues. Namely, machines can make their own mistakes. For example, if your tracking system relies on computer activity (and most of them do), it can register even the most important phone conversation with a client as inactivity.

Let’s look at the way these systems work in general.

  1. The software is installed on employees’ computers (and, optionally, mobile devices).
  2. The managers set the program up. This usually means
  • Dividing different applications and web pages into Useful and Not useful categories
  • Banning certain domains
  • Optional screenshot setup
  1. The employees go about their day while the time tracking programs monitor their activity.
  2. The program runs in the background and registers employee activity. It then calculates the employees’ productivity and salary based on their interaction with their devices

4a. If selected, the platforms will take timed or random screenshots and/or deliver inactivity warnings and reminders to the employees who don’t show any activity for a certain period (i.e. 15 or 20 minutes)

As you can imagine, this method isn’t particularly popular among the employees. The main reason is the feeling of being constantly watched, but there are also privacy concerns. These concerns are usually expressed with solutions that track keystrokes or take screenshots, as the company can get sensitive information from the employees.

Biometric Time Tracking

This time tracking process is yet to reach the wider public. It is usually used in highly confidential places of work. In other words, in the places where it’s equally important to keep the employees inside, and the outsiders outside.

There is multiple biometric time tracking processes. They include

  • Fingerprint scanning
  • DNA and blood sampling
  • Retina scanning

As you can see, these methods are no laughing matter. They show mutual trust between the employer and the employee but can be a risk for both sides as well.

These methods are, as we have previously stated, not very common. This means that most of us aren’t going to encounter them in our lifetime.

Yet, with the tendency toward more secure identification, one can’t but wonder how the future will look. Especially considering the leaps in science happening in our time.

The Importance of Using a Time Tracking Tool

A dedicated tool makes the time tracking process much simpler. This applies both to managers and employees.

You may be wondering how is a time tracking system going to prevent the employees from time theft. The answer is – it won’t in the beginning.

As you could see, almost all time tracking systems can be tricked. It isn’t even that difficult, as you can enter data as you please.

Yet, we are forgetting about those managers who now have more time to manage, as they don’t have to micromanage anymore.

The difference between the employees increasing their hours and those who track their time by the rules will be clear in a very short time.

Additionally, the dedicated systems for the time tracking process give the management a lot of additional information. In other words, you will be receiving reports that can steer you to specific actions that will increase your business’s productivity as well.

The Importance of Finding the Best Tracking Software for Your Company

The time tracking software market is chock-full of different solutions. Each of these platforms has its strengths and weaknesses.

It is extremely important to choose the time tracking software that fits the needs of your organization. There is no cookie-cutter perfect solution that is better than all others.

This means that you’ll have to consider some factors related to your company to be able to eliminate the outliers that wouldn’t work for you at all.

Your industry and MO will be the first element to consider, as a construction company has different time tracking concerns than, let’s say, a law firm.

Secondly, you need to see how quickly can the members of your staff pick up the software’s requirements. That is to say, the design of the platform is very important.

Finally, you need to understand the quality and depth of the reports you will be receiving. If you’re trying to improve your business, why not use all the assets you can?

Parting Words

Both professional and personal time tracking methods have become natural parts of our lives. If you have been curious about the time tracking process, and implementing one in your business, now is the right time.

Don’t allow your competition to get too far ahead of you. Optimize your workflow, learn who your biggest clients are, and make informed decisions by using the benefits of time tracking.



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