Business in every industry is moving at such a fast clip, managing projects and budgets is becoming as easy to manage as a litter of kittens in a yarn store. Navigating the ever-growing complexities of project management, client billing, and resource allocation points to an increasing need for a time tracking system. From seasoned, experienced organizations that are realizing they need to refine time tracking strategies to enterprises wanting to establish efficient workflows, consider this guide as your roadmap. Get ready to experience enhanced productivity and streamlined processes (accurate billing and resources!) across your projects.

What is time tracking?

Employees

Time tracking is a process that allows employees to record and manage the amount of time spent on tasks and projects. By logging where their time is spent throughout the day, employees can analyze their work habits and have a better understanding of how to allocate their time and even identify areas where they can improve. You may be surprised how much time tracking can help personal productivity and get employees closer to that sought-after sense of work-life balance.

There are many options for time tracking - it can be done manually with employees recording their time as entries, or (what we recommend for most) can be done by leveraging automated time tracking software. Creating a comprehensive record of time investment with a detailed breakdown of where time is being allocated is the ultimate goal.

Teams

Time tracking can be a huge help to teams working on multiple projects, especially those with cross-functional goals. Assessing the progress of projects, identifying bottlenecks, and distributing resources becomes highly manageable. Transparency reigns supreme, giving a clear picture of how members are spending their time - this enables managers to make informed decisions when it comes to doling out assignments and creating project timelines.

Employers

Employers can also gain insights into how time is allocated - this can be especially useful when managing accurate client billing (you’ll have a better idea of how long a project should take) and avoiding employee burnout (you’ll have a clear view of how much time is being spent where).

With features like task categorization, project tagging, and reporting, managers can assign specific projects or clients based on time entries. A detailed breakdown gives a granular view of how time is distributed and is especially useful for billing clients accurately. Supplying an itemized overview of the work your org performed for clients (whether internal or external) is beyond valuable. By understanding how much time is typically required for certain tasks or projects, project leads can better create accurate budgets and timelines.

What is time tracking software?

Whether used as a mobile app or desktop software, time tracking programs are designed to automate and simplify the process of time management for teams or individuals on each task or project. It’s essentially a digital solution that replaces traditionally manual methods of timekeeping (think: physical time cards, logging project timelines on a spreadsheet, etc) and increases accuracy and transparency.

Users of time tracking software can capture and document their time spent on various tasks or projects including:

  • Logging work hours
  • Assigning time entries for specific projects or clients
  • Categorizing tasks with a detailed breakdown of time allocation

Timers, manual input options, and integrations with other tools are typically a part of time tracking software.

A key benefit of adopting time tracking software is the automation capabilities. Rather than relying on employees to manually record their time, it can be automatically captured and the duration of tasks and projects can be logged. This helps decrease human error and ensures a higher level of accuracy for analysis and reporting.

Some common industries in which time tracking software is used are consulting, software development, and creative services. Project managers, team leaders, ICs (individual contributors) and even those senior execs see time tracking software as an essential tool. Having real-time visibility into project timelines and where resources are assigned truly makes for solid decision making and project planning.

Beyond basic logging of time, these tools can help with:

  • Task categorization: employees can categorize their time entries based on tasks and projects and tie them to specific clients if warranted, giving them a detailed breakdown
  • Reporting and analytics: project owners and managers can generate reports that give insights into time utilization, project progress, and overall productivity. Data and trends from these reports can be used for data-driven decision-making.
  • Invoicing and billing: have a business that bills clients based on hours worked? These programs can automate the invoicing process by generating accurate, itemized invoices that reflect the time spent on specific tasks and projects.
  • Tool integration: if you’re already using a project management or accounting or collaboration tool(s), no worries! Many time tracking tools have the ability to integrate into multiple tools.

Why is time tracking important?

For many organizations, time tracking is crucial to keeping the ship afloat. Here are just a few ways that time tracking is seen as important to businesses (no matter the size):

  • Resource allocation and optimization: with time tracking, managers can better understand how employees are spending their time. This insight enables them to know which tasks should be assigned to whom and for what expected duration, ensuring the right people are working on the right projects.

  • Project management and planning: Many teams run in a project-based environment. Time tracking allows project managers to be aware of progress at any given moment, and identify things slowing down such progress. With this info, informed decisions can be made that help ensure projects stay on schedule and within budget. The importance of time tracking in project management supersedes so many other benefits.

  • Accurate invoicing and billing: Some businesses need to bill on an hourly basis - time tracking allows them to do so with uber accuracy. Orgs can generate detailed, itemized invoices that reflect the actual time spent on projects.

  • Performance evaluation and goal setting: Performance evaluations are less painful with time tracking, as managers have direct access to data around individual and team productivity. This helps them set realistic goals and identify areas for improvement (and areas that deserve recognition and a fist bump!). It brings a more data-driven approach to the conversation.

  • Identifying time-wasting activities: You’d be shocked at the amount of needless meetings employees attend, unnecessary administrative tasks that are done, and the number of inefficient processes that continue to stick around. Time tracking highlights those areas that need change.

  • Data-driven decision making: We’ve mentioned this before but, it bears repeating - a data-driven approach with time tracking helps organizations identify trends (productive and non), assess the impact of changes made due to those trends, and helps implement long-term strategies for long-term improvement.

  • Work-life balance: When employees look at data provided by time tracking, they can better see how they have been dividing their time. They can then make adjustments in task prioritization and set boundaries to create a healthier work-life balance.

  • Improving accountability and transparency: if team members can see where their time is going, they are better equipped to hold themselves accountable and help create a culture of responsibility. This helps with visibility for managers, too, where they can create an environment where everyone is accountable for their contributions.

What is the main purpose for time tracking?

While there are many uses for time tracking, the main purpose is gaining visibility into how time is spent. In business, that usually means time allocation around tasks and projects. This leads to a more productive organization that leverages resources more efficiently. Here’s a breakdown of the main purposes:

  • Productivity management: measuring productivity is a huge benefit in time tracking. Teams can identify patterns, assess work habits, and understand where time is being used most effectively.

  • Quarterly and annual planning: With time tracking, managers better forecast for projects ahead, and help project leads track task progress, the division of resources, and timelines.

  • Division of headcount: Managers know who is working on what and for how long, making it easier to make resource forecasts that stick.

  • Billing and invoicing: Clients are billed in a fair manner due to time spent being directly correlated with specific tasks and rolled up to specific projects. This transparency builds trust and strengthens client relationships.

  • Pinpointing wins, losses, and course correction: Inefficiencies in workflows are identified quickly with time tracking. Wasted time is decreased to a negligible amount. At the same time, areas where things are running smoothly and high levels of productivity are happening are also highlighted — thanks to time tracking.

Is time tracking effective?

Time tracking can be extremely effective but it depends upon multiple factors such as:

  • Purpose of implementation
  • Accuracy of tracking methods
  • Willingness of individuals or organizations to use the data for improvement.

When implementing time tracking, it’s important to consider potential challenges. These might be around privacy concerns and the risk of creating a culture of micromanagement. Striking the right balance can mean the difference between success and failure. Having clear goals and transparent communication is instrumental in rolling out time tracking in your organization. We’ll get into potential challenges surrounding time tracking below.

What are the disadvantages of time tracking?

While the benefits (more on that further in this article) far outweigh the challenges, it’s only fair to explore potential pitfalls associated with time tracking. Here are a few:

Privacy Concerns

As mentioned previously, the potential invasion of privacy can be a challenge when it comes to adopting time tracking at your company. Managing the time around an employee’s work activities may create a sense of surveillance and raise concerns about personal space. Team members may voice concerns about having the way they spend their time at work tracked. Respecting privacy throughout this process is crucial to maintaining a healthy work culture.

Risk of Inaccuracies

Automated time tracking tools rely on users themselves manually inputting their allotted time for each task or project, or to start and stop timers, etc… Humans can be forgetful and prone to errors - especially when multitasking. This can result in inaccurate data, which in turn can undermine the reliability of tracked time. These inaccuracies may lead to skewed productivity and could negatively impact performance evaluations and project planning.

Limiting Structure

Some may see time tracking as being rigid in nature and can feel limiting. Tasks that are more on the creative end or that err toward the side of problem-solving, may not fit neatly into predefined categories or time slots. For some, a time tracker may feel as if it’s disrupting their flow or inhibiting their ability to fully immerse themselves in complex projects. Stifling innovation and hindering the quality of work can be a concern.

Micromanagement

If not managed well, adopting a time tracker could nurture a culture of micromanagement that was already there in the first place. If used inappropriately, time tracking may tell employees that management lacks trust in them. Over-reliance on time trackers could erode trust over time.

Employee Resistance

Some employees may view time tracking as ‘big brother’ watching their every move, undermining their autonomy. Resisting may lead to non-compliance and a lack of accurate data, defeating the purpose of implementing it in the first place.

What are the pros and cons of a time tracker?

When adopting a time tracker for your organization, you’ll want to look at the individual preferences and work habits of your team, organizational goals, and what success would look like by implementing a time tracking system.

Time Tracking Pros


Improvements in productivity

Meet Alex, a project manager caught up in the whirlwind of deadlines and fire drills. He’s been logging how he spends his time for just a week, which revealed he’d been spending significant amounts of time on emails and lengthy meetings. Armed with these insights, he’ll implement a more focused approach, including designated email slots and shorter, purposeful meetings. Alex is now a rocket ship of increased productivity, timely task completion, and stellar work quality.

Project management enhancement

As a construction project manager, Sarah relies on time tracking daily. Her projects have multiple phases, requiring her to track the progress of each and their associated tasks to stay on schedule. By analyzing time data, she can meticulously track where resources are assigned based on workload. This leads to a high level of team collaboration and an overall smooth construction process.

Resource allocation

Emily leads project management at a fast-paced (is there any other kind?) marketing agency. She implemented time trackers to improve resource management. She was able to pinpoint certain tasks that were taking longer than expected across the board. By identifying where workloads were uneven, she strategically redistributed tasks. She had noticed some team members were starting to show signs of burnout, but with these changes, she saw those signs dissipate. Adopting time trackers also had an unexpected effect, they became a catalyst for more equitable resource allocation and helped ensure critical projects received the necessary attention.

Accurate invoicing and billing

In a small design studio, where client billing is crucial, sits Emma, a graphic designer. Ever since time tracking was rolled out to her team, she has logged her work hours across client projects. She saw accuracy and transparency increase in client invoicing, and she was able to generate detailed reports reflecting the time she invested along the way. Shaky client relationships became solid as trust was built. Emma was able to showcase the value of the her work and build the reputation of the design studio, all while supporting the clients in a powerful way.

Performance evaluation and goal setting

Geoff is the team lead of a software development team and is leveraging time tracking as a tool for performance evaluations. He was pleasantly surprised when he saw he could measure not only individual performance but also the collective efficiency of the team. He could now set realistic goals for each team member with confidence, knowing that they would positively impact the team as a whole. Everyone would be marching in the same direction! His feedback sessions were the most constructive they’ve ever been and he could tell they ignited a sense of hope and a culture of innovation.

Data-driven decision making

Jake, an operations manager at a start-up, introduced time tracking software as a way to better support his thought process when making key decisions. With the data generated by the tool, he was able to collaborate with department heads to identify trends and patterns in work productivity and where resources could be funneled. For example, when they shifted some project timelines, they saw a spike in project progress (with a direct impact on productivity) and so other project schedules were also adapted, leading to significant jumps in team morale and KPI achievements.

Time tracking cons

As explored earlier in this article, a few challenges exist when adopting time tracking for your team or organization:

  • Privacy concerns
  • Potential for inaccuracies
  • Resistance from employees
  • Stifling creativity
  • Perception of micromanagement

However, all of these concerns are easily solved with the proper implementation of time tracking. When time tracking is adopted as a tool for empowerment, these challenges fall by the wayside. Time tracking is a way for employees to easily see how they are spending their time and identify ways to design their day in order for the fullest productivity possible - including projects near and dear to their heart.

What is the benefit of time tracking software?

When considering adopting time tracking for your organization, it can be overwhelming! There are so many benefits of time tracking software. Even if you’ve climbed on board and know it’s the best solution, how do you convey this with senior leadership and all stakeholders? We’ve come up with a blueprint just for you!

Step-by-step blueprint for discussing time tracking software with stakeholders

  1. Define the objectives for your organization

    “Time tracking can be a game-changer for us. With accurate time recording, we can eliminate human error and get precise data for project management, client billing, and even performance evaluations. We’ll get real-time insights into task durations and progress, and a clear picture of what is holding progress back. We'll be able to see what tasks are a waste of time and which have a high impact and should be invested in more.”

  2. Choosing the right software

    “When considering the right software to go with, my focus has been on finding a tool that aligns with our needs, such as on-demand reporting to help with future project forecasting. User-friendly interfaces are a must - the last thing we need is a complicated system that creates more challenges than it solves. I’ll gather a shortlist of options that could be a fit for us.”

  3. Implementation strategy

    “When rolling out time tracking for our team, it’s crucial to keep the lines of communication open. We’re going to need to clearly communicate the benefits, and understand how this move can decrease confusion we’ve been seeing associated with current workflows, and improve our project management process overall. We’ll want to address any concerns right away, to help ensure the team is comfortable with the change. Change is hard for most people, so let’s do what we can here. Let’s organize training sessions to help us all get acquainted with the new tool - that will mean less onboarding headaches and get this project launched with a strong start.”

  4. Accurate time recording

    “Accurate time recording plays a pivotal role in project management. It’s not only about holding everyone accountable, but also gives us data into project progression. This ties into transparency and fair invoicing practices and helps with conducting productive performance evaluations. We build trust with clients while also recognizing each team member for their efforts. It’s a win-win.”

  5. Project management

    “I’ve been looking into ways to elevate our project management strategies and time tracking keeps coming up again and again in my research. It’d essentially give us a constant pulse on the progress of our projects and keep us aligned with broader business objectives. I think this could be a promising avenue to explore.”

  6. Resource optimization

    “The thing that caught my attention most with time tracking was how it can really tighten up our resource allocation. The ability to see directly into how each team member is using their working hours will let us pinpoint who is overworked and who is underutilized. This could be the perfect solution to make sure skills throughout the entire team are highlighted and leveraged.”

  7. Accurate Invoicing

    “Our billing processes have been nothing short of a nightmare. Every billing cycle we’re scrambling trying to rectify inaccuracies. It doesn’t make us look great in front of our clients. If we use a time tracking system we’ll get accurate time recordings and we can be even more transparent to our clients when sending invoices. They’ll appreciate a clear breakdown of dedicated hours to each project that directly aligns with billing. It’s a huge step forward in building positive relationships.”

  8. Performance discussions and feedback

    “Our performance evaluation process is collecting dust. It hasn’t been updated in quite some time. A time tracking app can serve as an objective look when we reflect upon the past few months or year, and give us real-time data to support actual feedback that’s helpful and constructive. We’ve been saying we want to foster a culture where continuous improvement is celebrated - this is a way to do it.”

  9. Data-driven decision making

    “We love data on our team, but sometimes we’re swimming in it with no real action to take. I was thinking about implementing time tracking as the data it would unlock could really power a lot of our project and headcount decisions moving forward. Rather than anecdotal evidence or random data points that don’t really tell us anything, insights from a time tracking app could guide us in solid, informed choices.”

  10. Work-life balance

    “I’ve been feeling like our team has been burning the candle at both ends. Long hours and stress have been creeping up and I don’t think it’s warranted. I believe that implementing time tracking software could help us get to the bottom of the issue. We could see where time has been allotted and course correct where necessary. I bet more time is dedicated to areas that aren’t moving the needle, and that once we increase our efficiency factor we’ll have more time to spend on projects that interest our team, and give ample time to spend with loved ones.”

  11. Remote Work Support

    “Our company has embraced remote work through the organization, but we’re not really set up to fully support each team. If we adopted time tracking, we could leverage a cloud-based solution where team members could log and manage their time from anywhere. We’d be able to maintain accurate records in vastly distributed or remote work environments. It keeps us consistent and reliable and promotes the flexibility we’re always touting our company has. We’d be able to b even more competitive in hiring markets as well, as the nature of remote work evolves.”

Whether your objectives surround supporting the work habits of individual contributors, teams, or entire organizations, time tracking software is your solution. It’s not just a time management system for employees. It can be a lifeline. And guess what? We know just the people to help you get started. Grab your free trial of Harvest here.