Time Tracking Software for Small Business: 5 Reasons to Have It
Manually tracking employee hours is a time-consuming and inefficient process that can lead to costly errors. But what if there was a better solution that would improve efficiency, boost employee productivity and ensure compliance? Keep reading to learn the top five benefits of switching to an automated time tracking software for small business organizations.
Time Tracking Software for Small Business: 5 Reasons Why It’s a Must-Have
#1. Eliminates Manual Processes
If you are manually tracking employee hours each week, then there’s a good chance that your process flow looks something like this:
Step 1: The employee writes down their hours on a timesheet and either scans and emails the document or hand delivers it.
Step 2: A supervisor — usually the small business owner or the Payroll Manager — reviews and approves the timesheet.
Step 3: The manager manually enters the data into Excel.
Step 4: The information is used to drive the payroll process.
This system can be compromised by something as innocent as illegible handwriting or key punch errors e.g. if the Payroll Manager types 73 instead of 37 into Excel. And, once an error is recorded, it’s often difficult to pinpoint the discrepancy after the fact.
These hidden costs can hurt your bottom line a significant way. In fact, the American Payroll Association estimates that the human error rate associated with manual timecard processing accounts for between 1% and 8% of payroll costs.
Automating these steps allows employees to track their hours regardless of their location thereby reducing the potential for manual errors and saving labor costs involved in tracking these hours. In addition, by having access to real-time, accurate employee data at your fingertips, you can expect to save hours of effort in the back office payroll process.
#2. Enhances Job Costing
An automated time tracking system will reveal how employees spend time and where, since they can easily input job codes, services items and project codes into their online timesheets.
This data will help you to:
- Understand your true labor costs;
- Determine whether projects are on time and on budget;
- Produce invoices more quickly and easily justify the numbers;
- Create accurate project bids based on real-time data;
- Generate more realistic financial forecasts to drive business growth; and
- Gain valuable insights into the overall health of your business
#3. Boosts Employee Productivity
As you are beginning to see, time tracking extends far beyond just logging accurate hours. With the right tools, you’ll gain insights into the factors that block productivity and create an action plan that results in better resource allocation. For example, you can quickly identify when one of your team is close to burnout and needs more support to complete their deliverables.
In addition, the fact that employees can visually track their progress every day through an application (desktop or mobile), gives them a sense of self-responsibility to make their hours count. This level of autonomy can be very motivating and empowering for your team.
#4. Improves Scheduling
Most automated time tracking solutions allow you to build employee schedules directly in the application and share it with the entire team. In addition, updating schedules has never been easier. For example, if someone requests time off, you can easily edit the schedule and advertise the open shift through the app.
Online timesheets also allow you to assign tasks to individual team members through the application. Your employee will receive a notification in the app to accept the task and beginning tracking their progress.
#5. Helps Maintain Compliance with Labor Laws
Closely monitoring staff productivity through automated time tracking, ensures that your team is receiving a fair wage for the work they produce. This goes for exempt and nonexempt employees alike.
Furthermore, by staying abreast and compliant with all Fair Labor Standards Act (FLSA) regulatory changes, your small business can avoid the stress and costs of unexpected lawsuits.
3 Popular Time Tracking Software Solutions
There are many time tracking software solutions out there to choose from but not all are created equally. Let’s take a look at three of the most popular below:
Apart from easy-to-use time tracking Toggl gives you powerful and flexible reporting capabilities to help you win back your time.
Integrations: 100+ integrations including Salesforce, Zendesk, Google Drive and Trello
Cost: Toggl offers three pricing options – Starter ($9 per user/month), Premium ($18 per user/month) and Enterprise ($49 per user/month).
In addition to time tracking, Hubstaff offers the added benefit of employee monitoring. You can set up Hubstaff to take screenshots and record mouse and keyboard activity levels while employees are tracking their billable hours. This is an excellent solution if you have remote workers on your team.
Integrations: Integrates with many project management solutions like Zoho as well as accounting platforms like QuickBooks Online. See more Hubstaff integrations and add-ons here.
Cost: The basic plan starts at $5 per month per user and goes up to $449 per month for 90 users.
TSheets has its pulse on FLSA compliance. The app helps you to “automate overtime rules, customize pay rates and preset complex overtime calculations for easy, accurate payroll.”
Integrations: QuickBooks, Xero, Expensify and more
1 user – free forever
2-99 users – $4 per active user + $16 base fee per month
100+ users – $4 per active user + $80 base fee per month
For more information on TSheets, click here.
Whichever system you select, it is important to offer training to your team in terms of accurately tracking their hours and productivity.
Integrate Your Time Tracking Software for Your Business and More with MyRQB
Automating time tracking for your employees an excellent stepping stone to gaining better control over your business finances. However, there still remains a laundry list of other business critical tasks such as bank reconciliation, accounts receivable and accounts payable, that require a lot of your time as a small business owner.
By transferring these tasks to a team of experts you can focus on what you do best — driving innovation, wowing your customers and motivating your employees.
If you’re ready to scale your business, then contact our team today to learn how we can meet your small business bookkeeping needs.
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