Although time is one of the most important resources for businesses, it is often spent in a careless way. Thus, it is not surprising that companies which embrace the concepts of regular time tracking have more chances to succeed even in a highly unstable environment, outdoing those competitors who don’t pay time tracking the attention it deserves.
Time tracking on a laptop
Time tracking (also known as time keeping) is the term used to denote a process of recording the time spent on different projects or tasks by time based professionals or the employees within a company.
The history of employee time tracking began more than a century ago. The first time clock is said to have been invented in 1888 by Willard Bundy, whose brother set up the Bundy Manufacturing Company (later IBM). The idea of tracking the time of employees is still pretty much the same as in the late 19th century, but the methods employed to do it have changed greatly.
With the advent of IT technologies, computed based systems have started to be used for tracking an employee's time. Time tracking software makes this process automated by providing users with a fast, user-friendly and flexible way to record, analyze, adjust and report time, cutting down on errors and saving much time and efforts. Time tracking software is used mainly for:
Charging time to customers
Project analysis
If time tracking software is chosen and used correctly, it is sure to provide the company with an extremely fast return on investment. Although it is hard to believe that a company’s financial performance can be enhanced in as little as 2-month period, it proves to be true. Let’s see why it happens.
Increase Your Billings
Time tracking performed every day is certain to increase your company’s billings almost instantaneously because no minute of billable time is overlooked as it’s often the case with recording time once a week or once a month. When a few minutes here and a short phone call there add up instead of being forgotten, a company saves a substantial sum of money. The results of time tracking studies have revealed that companies shifting to daily time tracking generally improve their billings by 5-10%.
Accelerate Company’s Cash Flow
Daily time tracking helps to accelerate cash flow by a minimum of a couple of days and in many cases by several weeks.
If delayed to the end of the week or month, time tracking can become a difficult task, taking much time and efforts to be fulfilled. Because it is perceived as a burden, employees often procrastinate with producing the weekly or monthly data timesheet. Such delays can last for days or even weeks, and since a company’s entire cash flow cycle depends on the last employee who hands in their timesheets, much time is lost during this process.
By shifting to easy daily time tracking and by implementing proper time tracking software, a company guarantees that its invoice preparation process starts is completed in time, which automatically speeds up cash flow of a company.
Better Project Management
Daily time tracking is of great assistance to project managers, making it easier for them to manage time and budgets. Consequently, potential budget problems are determined in a timely manner, when it is not yet too late to solve them. In addition, customers are satisfied because the projects are well-run and problem free.
Even those companies that work on fixed price basis will find using time tracking software beneficial. They can easily assess each project and identify the most profitable kinds of projects and clients.
Benefit to Employees
While it may seem that it’s only employers who benefit from using automated time tracking applications, this is not true. Employees benefit as well because they start feeling more confident about what they do and know for sure that their efforts will be rewarded.
Types of Time Tracking Software
There is a multitude of time tracking programs. Some time tracking applications (known as standalone software) have only a limited number of features, enabling their users to record timesheets and make reports. Generally, small and medium sized companies do not need anything more sophisticated than this. Larger companies may require time tracking software that can be integrated into an accounting system so that timesheet data is directly linked to company accounts. Another type of time tracking software is integrated into a company’s payroll system, helping to work out the salary of each employee. Freelancers and contractors often prefer time tracking software that is integrated into a billing system since it significantly facilitates billing time to customers. Finally, companies that deal with large-scale projects which take several months to complete usually prefer time tracking software that is integrated into project management systems. Its major advantage is the feature of graphing the work and time being spent on every single project or task.
How to Choose the Best Time Tracking Software
The importance of choosing the appropriate time tracking software should not be underestimated. First of all, it is recommended to identify the needs of your company and make up the list of requirements.
Companies can benefit from a selection of time-tracking software such as web-based services, Windows/Mac/Linux OS applications, software running on handhelds, and add-ons to some small business accounting programs. Most vendors provide either a free trial or a demo system. Open source time tracking is also possible.
Typically, the cost varies from zero dollars (for open source options) to $5,000 for software with more than a hundred user licenses.
Pay a special attention to the following features when deciding whether time-tracking software is right for your company.
Reporting Tools
Reporting features really matter in any time tracking program. It’s better to have as many options as possible. For instance, check whether you can quickly generate a report that shows the amount of time you spent between June 30, 2009 and December 3, 2010, doing a certain task (such as making phone calls) for a certain project.
Export Options
Exporting is also necessary because it allows you to use the time-tracking data in more ways. Besides, if your software includes this feature and you choose to switch to some other application later, your data from the previous program won't be confined to that application’s file format. Therefore, make sure the program has an option of exporting data to Microsoft Excel, PDF or other formats.
Support for Multiple Users
This feature facilitates the process of collecting time tracking data from multiple users.
Mileage and Expenses Tracking
Some companies might need the feature enabling the tracking of the costs related to projects or customers.
Recent Revisions or Updates
Small software companies that specialize in time-tracking software development might not update or revise their programs on a regular basis. If you are interested in some program, try to find out how recently it was updated. Such kind of information is usually placed on FAQ or support pages.
Vacation Accounting
This is a very useful feature that makes it possible to account for vacations or days off requested or taken by employees.
Try before You Buy
It would be a good idea to create an account where time tracking can be performed for free to see how such programs work. For example, small companies might consider trying out an open source web-based program Anuko Time Tracker, a free and simple option that solves 80% of time tracking issues.
When choosing appropriate time tracking software one shouldn’t forget that what’s right for one company may not be right for another. Anyway, it’s always worth getting familiar with the subject, developing a plan, and tire kicking. The key to success is: stay focused on the company objectives you want to accomplish and choose a solution for the improvement of the whole company.
