November 29, 2022
time tracking tool

Time Tracking Software: Why it is Important for Your Organization

You have probably heard before: Time tracking is key to understanding how your time is being spent. Time tracking is essential to understand how your time is being spent personally and professionally. It is essential for productivity, insight, and a healthy workflow. This is important for everyone in any organization or society. It doesn’t matter if you are an executive, manager, or team member. Time management is crucial.

When it comes to business, there are many things that you need to know. What time is tracking software best? How can I use time tracking software to track projects? What are the best time-tracking practices? We’ll answer all your questions in this guide.

What is a time tracking?

Let’s begin with the basics. The time tracking method is used by businesses to record the hours worked by their employees. This is used to determine how employees are compensated for their time on tasks or projects.

Time entries can be used to calculate payroll. They also serve as a way for managers to see where their employees are spending their time and how long it takes to complete a task. Knowing which tasks take the longest will help you assess whether your time was well spent. Not necessarily the most difficult tasks require the most effort or provide the greatest value. Sometimes, the opposite is true.

Time tracking has many benefits

Individual employees often find the time tracking insights a great source of information. What percentage of your time are you spending browsing the internet, going through your inbox, searching for documents, or trying to locate one in a stack of folders? Although these are not considered major daily tasks, if they accumulate, they can become some of your most time-consuming and non-billable activities. Is that right? Harvard Business Review’s survey about filling out timesheets shows that the U.S. loses $7.4 billion per day in productivity due to workers who don’t record their hours.

Time tracking offers many benefits for businesses:

1. Transparency in work processes

You will make your business transparent by making time registrations an integral part of your daily routine. You can keep track of your work process and gain insight into the duration of each job. You will also be able to identify which tasks are constantly being put off and prioritize work. Time tracking software eventually provide a bigger picture for employees. They can look back at their work and optimize productivity and keep track of what others have been doing.

2. Employee accountability is increased

Employees are more focused when they need to record time. They also know that they must report the hours they spend on tasks. Everyone realizes the clock is ticking, and everyone tries to be productive. Employees will begin to see patterns and trends in their workweek and try to reduce non-billable hours.

Time tracking can help you reflect and adapt. Ask yourself

  • Was the task geared towards a larger goal? (e.g., the business mission).
  • Did the task merit such a large amount of time?
  • Would your time be better spent?
  • Was the goal of the task to achieve a career or personal goal?
  • What concrete changes were the result of this task?

Once you have answered these questions, it is time to think about whether or not something can be done differently to make your workflow more efficient. Is there a way to improve the organization of the work? Do the software and hardware need to be updated? Did you find that you had to wait for someone or something to complete your task? Was there anything that annoyed you? It’s time to change it. These are important questions you should ask yourself and your team. Prioritize the tasks according to their importance, and then allocate your time accordingly.

3. Understanding your billing and operational efficiency

Time tracking is essential to increasing operational efficiency in a service-based business. It goes into your billable utilization reports and highlights each contributor’s productivity levels and the whole organization. You can then track the time spent on client work and bill accordingly. In turn, increasing the number of billable hours is a way to make your business more profitable.

4. Know where there is the highest resource demand

The time spent is an important indicator of the resources required. This shows whether a particular department requires more resources in terms of the workforce or other inputs. It also gives insight into who adds the most value to the organization. This information is vital for both the individual and the entire organization. One person could do all the work. This situation could signify that something needs to change to make everyone feel the same, such as redistribution of work and sharing of workload.

5. Monitoring how much of the budget is burned

How can you keep your project budget in line? Track your time again! You don’t need to do any additional steps to determine how much budget has been used. Employees fill out their timesheets, registering time spent on tasks and projects. Just make sure the hourly rates and costs are correct.

Different types of time tracking

You can get a more objective view of your company with employee time tracking. However, it would help if you did not confuse project time tracking and personal time tracking. Let’s take a look at the differences between them.

1. Tracking personal time

 Many software tools are available to help you track your digital time. For example, can track your digital time across all devices. What websites and apps do you use most often, and how often? This data is then categorized and provides valuable insights and an overall productivity score. This score allows you to compare your workday week to week, gain insight from your experience, and adjust your workflow accordingly.

2. Project time tracking

 For larger organizations, time tracking tool can be done directly on tasks. This is often possible with solutions that combine resource and project management. These solutions make it easier for you to manage your tasks across projects and organizations and provide valuable insight to help you and your team manage your time more effectively.

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