The Uses and Benefits of Tracking Time
One of the important aspects of business payroll is tracking the time that employees spend working for the company. The function of payroll processing is dependent upon accurate collection of the information regarding the number of hours employees work.
However, the time tracking data is not restricted for use in payroll solutions only. The tracking time information, when properly collected, can be beneficial for use in automating project management, project costing and tracking, as well as client billing automation. Not many payroll service professionals give substantial attention to these potential benefits of tracking employee time. It is a challenge for companies and HR professionals to get the most out of their time tracking efforts.
Why track time of your employees? There has been a major shift in the way businesses operate over time. Only a few decades back, payroll was based on the power that originated from the capital. Businesses and companies back then were capital centric. When employees consisted mostly of labourers, tracking time was not as important. In today’s era, companies have a people focus and employees are much more than a physical labour force; they are the human resource for a business. That is why small business companies need for their resources to be utilized in a way that benefits both them and their employees. That is what gave rise to the concept of tracking employee time using timesheets.
What are timesheets?
The proverbial timesheets are simply a means to record the amount of time a company’s employees spend on different jobs or assignments. There are many ways of recording this time. A widely popular and used way to do that is using software for tracking time.
Uses of employee time tracking
The main use of timesheets is to determine payroll, however, this is not the only use as mentioned before. Timesheets are also used to record the starting and ending time of certain tasks as well as the duration. The task-wise break down of time spent helps in challenges like project management, costing and billing. They are also used for evaluating employee performance. The ability of detailed timesheets, when used right, to identify problem areas of a project is increasingly helpful in driving and shaping up corporate strategy.
Benefits of tracking time
Among the basic benefit of helping with payroll processing, tracking time has numerous other benefits as well. Some of the benefits are as follows: Time tracking reduces costs in three significant ways for a small business owner. First of all it makes payroll processing more efficient. Second, it makes hidden costs appear on the time sheet so you can target and reduce them. Third, it helps with the automation of billing clients and invoicing processes. The revenue increase from tracking time comes with automating the billing processes. Automatic billing makes it much easier for the company to generate correct invoices for hours worked.
This helped with determining the cost of the consultants as well. The automation of billing also speeds up the payment process and the company gets to make-do without the hassle of handling manual bills. Thus, payroll services ultimately help resolve problems in many of the other areas of the business.
How Time Tracking Improves Productivity
When small businesses track time for the purpose of payroll services and payroll processing, they don’t always have a complete idea of how else they can benefit from the info recorded on the timesheets. However, many small business entrepreneurs do use time tracking information to their advantage. The various other very beneficial uses of tracking employee time include its use in customer project management, project costing, and client billing and invoicing. While all of these are great uses of time tracking information, this is not where the benefits of recorded timesheets ends.
Once companies have the time tracking information collected for payroll purposes, it can also be used to track down, target and eliminate any inefficiencies in the work processes. You can use this information to develop a plan to increase overall productivity in your office. This will eventually translate into a happier environment, more satisfied employees and hence higher business profits.
Where to Start?
An entrepreneur can start the process of increasing overall productivity by evaluating the time tracking techniques. If you do not already have a software for tracking time of employees, then make it a point to purchase one. Compare all the available time tracking software options carefully and choose the one that best suits your payroll needs. Once you have bought the right software for tracking time, have it installed on the work stations of all your staff.
Get with tracking time on
Get your employees to track time for the tasks performed every day. Collect the relevant information for at least one month. The henceforth collected information will give you a clear idea about how your staffs spend their time. This knowledge will help you in the next stage of productivity plan development.
Set up the stage
Once you know about the employees who are using their time productively from the timesheets or from the software for tracking time, select them to be the team leaders for your productivity planning.
Identify the issues
Evaluate the timesheets to see what are the ways other employees are wasting time and how. More often companies find some common reasons for time wasted. It could be that your employees are concentrating more on trivial stuff and thus missing out on the main work, or spending too much time online or with emails.
Take your employees into confidence
Call a company-wide meeting and talk about the information collected through the software for time tracking. Make sure your employees understand that you want to work ‘with them’ on their time management instead of working against them. Ask them for suggestions on how to increase time-related productivity.
Devise an action plan
You can start by dividing employees into different teams according to the main cause of the wasted individual time. Let the productive employees be the team leaders as identified from the time tracking. These leaders will be responsible for managing their respective group’s time efficiently.
Implement the action plan
Each team will have a certain goal based on the information from their timesheets, such as spending less time online and reducing overtime. The team leaders will be responsible for implementing a strategy to meet the goals.
Keep tracking time and collecting information. Review the information thus collected and after one month see how far has it been implemented, and how far the teams have met their goals.
The payroll department
In a small business, the payroll department can usually function as the ‘team leader’ over all departments, for the payroll personnel is closer to the financial bottom line of the business. When all data is evaluated using percentages, the human mind doesn’t get distorted by preconceived personal ideas of what is important. An important example: Rs. 1,00,000 means one thing to me and another thing to you. But, 100% means the same thing to both of us. Payroll processing that bases decisions on the % sign serves the small business owner in many ways!