Timesheet software for accountants: The essential tool for productivity increase?

Productivity: just a buzzword or not?

People productivity.

Team productivity. 

Task productivity. 

Everyone talks about “productivity” and why it matters but…unfortunately not many of us understood it until:

COVID-19 happens to all of us.

And in a millisecond, many of us shifted our working procedures (and habits) from classy offices to our living rooms. Like a meteorite it hit us – it is not about how much we work but, more importantly, how we work.

For a better understanding of what has happened to all of us and how it affected productivity (or it didn’t?) scroll down and see how timesheet software for accountants saves the day.

P.S For a better understanding of what productivity means and how timesheet software for accountants can increase the productivity of your employees and the company as a whole, and why it matters, we’ll briefly explain what productivity really is.

And productivity – along with economy and profitability – is a core ingredient of efficiency.

Especially if we are talking about the enterprise.

But, to be 100% precise, productivity should not be focus only on enterprise companies (even though they have the biggest effects) and many SME or SMB companies can benefit a lot by optimizing productivity.

Where to start optimizing productivity?

This is a question that we hear a lot.

All CxOs are very well aware that productivity is key for a profit. But it is hard to understand where to start and what to optimize first.

That’s why we will give you here a tip where to start – labor productivity.

Why labor productivity and not something else you would ask?

Well, labor productivity if it is well optimized shows the efficiency of work but if not…will burn your profit in a second.

And this is the point where we need to understand how important is the ratio of labor input and results achieved.

What should be your goal with labor productivity?

The goal of every business entity is to:

  • increase the productivity of its employees,
  • achieve the best results compared with the work effort invested

Increasing labor productivity does not automatically mean achieving the set goals of the business entity, but it is one of the key factors.

An increase in labor productivity is often associated with increased exploitation of employees. However, our many years of experience in employee management show otherwise. Increasing productivity will not have a negative impact on the position of employees. In fact, it will have a positive effect, in terms of increasing the motivation and satisfaction of employees with the work they perform. Namely, employees who perform their tasks with less time spent will be more motivated to come to work. This will additionally influence the increase in productivity.

Whether the increase in productivity will have a positive impact on both the company and employees, or whether their goals will be compatible, depends on a number of factors such as:

  • adequate employee selection
  • employee relation management
  • company management goals
  • strategy for their implementation
  • …..

But, you should be aware of one thing…

Conflict of interest over labor productivity

If you think that technical implementation is crucial you will be surprised. An increase in productivity is in direct correlation with internal conflict.

That is why it very important to understand that if the positive effects of increasing productivity are appropriated only by the company, there will be conflicting interests of the company and employees.

This scenario will, in the long run, lead to a drop in productivity due to:

  • frequent turnover
  • opportunistic behavior of disaffected employees. 

timesheet software usage

On the other hand, if employees feel the positive effects of increasing productivity, to mutual benefit and satisfaction, a continuous increase in productivity will be ensured in the long run.

Another important aspect of productivity is its impact on the wider community. Increasing the productivity of employees and companies will have a positive impact on society in general. More efficient use of resources can contribute to the creation of more output that will be useful for the company. While on the other hand, employees can perform other useful activities.

Timesheet software for accountants and productivity increase

Recording and analysis of the time with timesheet software for accountants can be a very useful tool to increase the productivity of employees, and thus the company and society as a whole. Below will be more information on how time data employees spend and their analysis can contribute to increased productivity.

What is the relationship between timesheet software for accountants and productivity?

Productivity factors can be objective (technical-technological and socio-economic) and subjective which are related to knowledge, qualifications, abilities and personal characteristics of employees as well as employee management, direct organization of their work, the organizational structure of the company, management system and similar.

Objective factors can only be influenced indirectly and in the long run. Subjective factors are under the control of the company. The analysis of the time spent by employees can help us to effectively influence subjective factors and thus increase the productivity of employees, the company and society in general.

In case you decide to use timesheet software for accountants, based on the records of employee time and analysis of time spent per employee, activities, service lines, projects, clients, etc. you will be able to identify where the problems are and try to overcome them.

 Analyzes can be done on different bases, but for the purposes of this text, four basic dimensions have been identified that must be observed as a whole in order to determine whether and in what way it is possible to increase productivity:

  • Staff
  • Internal organization and procedures
  • Services
  • Clients

We will first start with an individual analysis of these dimensions. Later we will look at the impact of each of them on the final conclusions and decisions.

Individual analysis

Time records in timesheet software for accountants allow you to determine how much time each of your employees spends, and thus how much it costs you to provide a certain type of service per hour, on the one hand, as well as what income your company earns per hour of employee work, service delivery, or engagement for the client. Of course, a combined analysis of these indicators is possible. If you are not satisfied with one or more of the above indicators, it is necessary to perform an analysis of the time spent on each of them.

To simplify the analysis, the assumption is that the costs per hour of an employee are fixed in the short term, that the ratio between the cost of employees per hour on the one hand, and revenue per employee, service, or client, on the other hand, represents a measure of employees productivity, as well as that the increase in productivity is measured by an increase in hourly income, which will be ensured by more productive work of the employee.

How to optimize productivity per employee with timesheet software accountants?

If you are not satisfied with productivity per employee, it is necessary to perform an analysis to determine the causes and take measures to increase it. It should first be seen whether the employee has the appropriate knowledge, skills, abilities and experience to perform the activities assigned to him for a particular client. If it is determined that the employee insufficiently possesses all of the above, it is necessary to consider the possibilities of his professional development

However, if an employee possesses all the above, but still is not qualified or is too qualified to perform the activity. Consider entrusting activities to another employee. Also, the possibility of hiring an employee to perform other activities in the company, or to engage in providing services to other clients, may be considered. If there is no possibility to implement any of the above, the option may be to terminate the cooperation with the existing and hire a new employee.

After you optimize productivity per employee, the next step is to analyze the internal organization and procedures. It is necessary to determine whether:

  • the way the employee works
  • vertical and horizontal communication
  • compliance with other projects
  • work dynamics and relationships with colleagues

is organized in an appropriate manner and considers the possibility of certain changes to reach the optimal solution that will increase the productivity of the employee.

How to optimize productivity per client with timesheet software for accountants?

If you have determined that there is no problem on the part of the employee or that appropriate training can solve them. As well as that the company’s organization is set to allow productive behavior and productivity is still unsatisfactory. It is necessary to consider changing the way of providing services. Especially if you determined that the service is unprofitable for a large number of clients and employees.

After consideration of the internal possibilities for increasing productivity, (employees, organization, procedures and services), based on timesheet software results, it is necessary to reconsider the relations with clients. In relations with clients, the agreed scope of engagement should first be reviewed. Consider whether we perform only activities that are contracted or other activities that are not invoice. It is then necessary to re-examine conditions and relationships with the client to determine whether it is possible to achieve better efficiency here.

If it turns out that it is not possible to increase efficiency within the existing relationship, it is necessary to review the contractual relationship with the client. If it is not possible to achieve better conditions by amending the contract, the possibility of terminating the cooperation and finding new clients that will provide higher productivity should be considered.

By conducting all the above analyzes based on data from timesheet software for accountants, it will contribute to:

  • the creation of an optimal structure of employees
  • internal organization and procedures
  • as well as a portfolio of services and clients. 

These analyzes will not only allow you to establish the optimal structure of employees and organizations, as well as a portfolio of services and clients at a given time but will also help you define the vision, mission, goals and strategy of future business.

What kind of mindset you should have while optimizing productivity?

As can be seen from previous presentations, records and analysis of time spent by different categories, as well as measuring productivity based on the given analyzes, is not a goal as itself. Increasing productivity in all these categories, and consequently increasing the company’s profitability is not the ultimate goal. You should use the analysis and records of time spent as a tool that will allow you to create an organization where all stakeholders will be satisfied in the long term. Only in this way – having a mindset for the long term –  will you ensure the long-term sustainability of your company and the achievement of its goals.

Productivity analysis and opportunities to increase it, will allow you to identify the strengths and weaknesses of your company, as well as opportunities and threats in future business, and most importantly to make the right decisions in a timely manner.

The analysis resulted from timesheet software for accountants or other time analytics that can lead to the conclusion that certain employees need to be additionally trained, assigned to perform other activities or to other clients, or ultimately replaced. Further, the analysis can lead to the conclusion that it is necessary to change, improve, or otherwise establish the internal organization and procedures. Also, you can conclude that the portfolio should include new services, improve or otherwise design existing ones, or simply eliminate certain services or parts of them from the portfolio. 

Finally, analysis can help you redefine relationships with specific clients, if necessary, and terminate cooperation, as well as anticipate whether potential clients are qualified to establish cooperation at all.

What should you do with diagnostic productivity gaps?

And this is one of the most important things your company could get while considering productivity optimization – diagnostification of productivity gaps.

By having to know those productivity gaps, you will be in a position to create a proper solution for each case.

For example, if in any part (employees, activities and clients) you notice unsatisfactory productivity as a ratio of cost and income per unit of time, it is necessary to analyze each of the above dimensions (employees, internal organization and procedures, services and clients) and determine where there are opportunities for improvement. 

Dimensions must be observed in correlation, i.e. how a change in one will affect the others and vice versa. 

Selective analysis can lead to faulty conclusions.

If you find that a particular client is low-productive, you need to determine where the cause of low productivity lies. The cause can be related to the client himself, but also the employee, the internal organization, the service itself, or most often to several dimensions at the same time.

If you try to solve the problem only with the client, without analyzing other dimensions, you may end up cooperating with a client who was not the cause of low productivity and thus causes multiple damages, in the form of loss of profit, dissatisfied client, dissatisfied employee, and unresolved low productivity problem.

On the other hand, if you determine the real cause of the problem you will have multiple benefits:

  • of higher profits
  • satisfied customers
  • satisfied employees who will be more motivated to work
  • better internal organization and procedures
  • or better service that adds value to your customers.

The same applies to the productivity of employees or activities, the damage or benefit can be multiple depending on how you approach the problem of low productivity.

The following is an analysis of how you can use timesheet data to measure, analyze, and improve employee productivity. Consequently, you improve:
  • the productivity of the entire company,
  • the satisfaction of all stakeholders,
  • the development of the company in the long run.

Timesheet data as the foundation of productivity analyses

If you perform an analysis of the causes of low productivity taking into account all relevant factors as mentioned above. The quality of the results will primarily depend on the accuracy of the data entered. Here we come to the most significant problem of using timesheet software for accountants in order to increase the productivity of employees, the company and society as a whole.

Activities details - Employees

Data in timesheet software for accountants can be entered incorrectly for several reasons:

  • In order to conceal poorer results in one client or in one activity, employees may transfer excess time spent over expected to another client or activity, where they spent less time than expected, thus creating a misconception about the profitability of a particular client or service.
  • If they work for several clients in several different activities (this is especially true for employees in higher positions), inaccurate data entry can affect the accuracy of their entry. The longer the entry period, the less reliable the data entered will be, as the employee will not be able to make an accurate estimate of the time spent on each activity and each client.
  • There may be other reasons for incorrect entry, such as simply unintentional errors whose probability of occurrence always exists.

How to solve these problems, together with the problem of time required for data entry?

One way is to automate input. So, we have solutions that enter data into timesheets based on images of the engagement plan. They connect timesheets with phones and computers, enter the beginning and end of activities while the program itself calculates the time spent, etc. However, these solutions have limits and the subjective factor significantly affects them.

The biggest challenge of using timesheets to increase productivity in the future will be to:
  • ensure the accuracy of data entry
  • minimize input time while respecting the integrity of users as human beings.
Artificial intelligence can solve this problem, but then it goes to the other extreme. The solution is somewhere in between.

What are the types of timesheets I can use?

Today you can find thousands of different types of timesheets. In such a competition, it is very difficult to choose the one that best suits your needs. 

Depending on the business you do, the way you do it, the structure of employees, customers, services, data you want to get, the possibilities of their analysis, the purpose of using the results of the analysis, etc., certain solutions will suit you better than others. 

It may seem at some point that this is exactly what you are looking for. However, after a certain period of use, you may find that the solution you have chosen does not suit you. No matter how much experience you have and no matter how much you are confident while presenting the product or using the demo version that the solution suits your needs, you will want to change something over time.

In the next paragraph, we will present to you what basic types of timesheets.

Basic timesheets everyone should use

One of the most common divisions is the time period they cover, i.e. how often you need to enter the input of information:

  • Daily timesheets
  • Weekly timesheets
  • Two-week timesheets
  • Monthly timesheets
  • Project timesheets (covering the duration of the project)

The question is how to choose the optimal solution. It depends on many factors, but above all on:

  • the number and types of services
  • the number of clients that one employee serves
  • as well as the period when you invoice or report to clients.
In any case, fill in the timesheet before invoicing or reporting to the client.
It is necessary to make the entry as often as possible because this will increase the accuracy of the entry and shorten the entry time. Especially if you have several types of services that you provide to a larger number of clients in a short period of time. On the other hand, if you have one type of service provided to one client, it is enough to make an entry once a day or once a week.

The frequency of input also depends on the trust between you and the employee, the higher the input, the less frequent it may be, and vice versa.

Timesheet types

Depending on the form and medium through which you can fill them, timesheets can be:
  • Online timesheets
  • Desktop timesheets
  • Timesheets in paper form
The advantages of online timesheet software reflect in:
  • the possibility of tracking entries in real-time
  • automatic data processing
  • obtaining different types of reports for analysis, etc.
The main disadvantage of online timesheets is the possibility of data loss or theft. What are the advantages of online timesheets, are the disadvantages of desktop timesheets, and vice versa. Timesheets in paper form are being used less and less. We do not see the essential advantages of using them, except that they make subsequent corrections of the entered data difficult.
 
Depending on whether you create data reports for one or more employees, timesheets can be:
  • Individual timesheets
  • Team timesheets

As with previous divisions, both have certain advantages and disadvantages. Reports for individual employees may provide more analytical information. On the other hand, they provide little opportunity for comparison with other employees. The advantage of team reports is that you can perform a comparative analysis by specific categories. However, the number of categories by which you can perform the analysis is limited.

Conclusion

In conclusion, depending on whether you use timesheet software for accountants only to record the time employees spend or to analyze historical data while making estimates and times scheduled in the future, timesheet software is here to stay.

And to help you optimize productivity while boosting your profit in the long run.

There are different types of timesheets, from those that serve only to record attendance at work, to those that give you the ability for different types of analysis to make strategic decisions determining:

  • the profitability of employees, services and customers
  • preparing invoices
  • increasing productivity and efficiency of the company at all levels
  • defining mission, vision, goals and strategies

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