iPhone
Android
At Harvest, we know timesheets serve as indispensable tools, offering far more than just a record of hours worked. For many companies, they positively impact organizational structure and provide invaluable insights into resource allocation, project profitability, and employee productivity. Beyond these operational functions, the purpose of timesheets extends deeper, even impacting an organization’s culture of accountability.
What is the value of timesheets?
Let’s face it - in this economy, every resource must be maximized to ensure growth and profitability. Rather than seeing timesheets as a record-keeping mechanism, leverage them as tools that inform strategic decision-making. Here’s some food for thought on how timesheets can impact your org:
- Resource Allocation and Optimization: Knowing how employees are using their time across different tasks and projects can help pinpoint where things are working well…and where things are going off the rails.
- Project Profitability Analysis: For midsize businesses in particular, profitability is often closely tied to project success. Timesheets play a crucial role in evaluating project profitability by tracking the actual time spent on each project compared to the estimated time. This data allows project managers to accurately assess project costs, identify areas of overruns, and adjust budgets and timelines accordingly.
- Client Billing and Revenue Recognition: By documenting billable hours and project expenses, businesses can generate accurate invoices for clients, which in turn leads to what everyone wants - transparency and accountability in billing practices. Moreover, timesheet data facilitates revenue recognition by providing evidence of work performed and revenue earned during specific accounting periods. Did you just become your CFO’s best friend? We think so!
- Employee Performance Evaluation and Development: Time data can help managers identify top performers, recognize areas for improvement, and provide targeted feedback and training opportunities. The data around timesheets for employees also helps with employee goal setting, enabling employees to align their efforts with organizational objectives and drive personal and professional development.
- Compliance and Legal Protection: In industries subject to labor regulations and legal requirements, accurate time tracking is essential for compliance and legal protection. Timesheets provide documented evidence of hours worked, breaks taken, and overtime accrued, helping businesses demonstrate compliance with labor laws and regulations. Moreover, in the event of disputes or legal challenges related to wages or working hours, timesheet records serve as critical evidence to protect the business from potential liabilities.
What does a timesheet show?
A timesheet template can go from a big picture to providing a detailed snapshot of how employees manage their days. Here's a breakdown of a timesheet example and a checklist of sorts of what a timesheet typically shows:
-
Hours Worked: The number of hours each employee has worked during a specified period, typically a day, week, or month. This fundamental data point forms the basis for payroll processing, ensuring employees are accurately compensated for their time.
-
Task and Project Allocation: This can be categorized by hours worked within specific tasks or projects. This breakdown allows managers to track project progress and identify workload distribution to better meet project deadlines.
-
Billable vs. Non-Billable Hours: Where needed, timesheets can distinguish between billable and non-billable hours. By monitoring billable hours, businesses can capture all billable work and manage their various revenue streams.
-
Overtime and Breaks: Overtime hours worked and breaks taken by employees can be tracked via timesheet. This helps businesses comply with labor regulations and helps to manage workload to avoid employee burnout, and reduce overtime-related expenses.
-
Attendance and Absences: In addition to recording hours worked, timesheets often include information on employee attendance and absences, such as vacation days, sick leave, or other types of time off.
-
Employee Productivity and Efficiency: Trends in hours worked, task completion rates, and project timelines can highlight areas of high performance (as well as problem areas).
-
Compliance and Audit Trail: Timesheet records offer documentation to demonstrate compliance with legal requirements and contractual obligations.
Why do timesheets matter?
Timesheets hold significant importance for both employees and managers alike. Here's how:
Why Timesheets Matter For Employees:
Resource Optimization: Timesheets provide visibility into how time is allocated across tasks and projects. This transparency enables them to prioritize their work effectively and focus on high-priority tasks.
Client Billing and Revenue Recognition: Timesheets ensure that employees are accurately compensated for their work by tracking billable hours and project expenses. This ensures fair and transparent billing practices, and adds to employee satisfaction and motivation.
Employee Accountability and Performance: Timesheets nurture accountability among employees, encouraging them to manage their time efficiently and meet deadlines. By tracking their hours and activities, employees can demonstrate their productivity and contribution to the team, leading to recognition and career advancement opportunities.
Why Timesheets Matter For Managers:
Resource Optimization: Timesheets benefit managers by providing insights into how resources are allocated across projects. By analyzing timesheet data, managers can identify inefficiencies and reallocate resources as needed.
Project Profitability: Timesheets are essential for evaluating project profitability by tracking actual time spent versus estimated time. This data enables managers to make informed decisions, and adjust budgets and timelines as needed.
Compliance and Legal Protection: Timesheets provide documented evidence of employee hours worked, breaks taken, and overtime accrued, ensuring compliance with labor laws and regulations. This protects the business from potential legal liabilities and disputes, safeguarding its reputation and financial stability.
Why should employees approve their timesheets?
While the task may seem routine, it plays a crucial role in encouraging organizational transparency and trust.
By approving their timesheets, employees verify the accuracy of their recorded hours and activities and usually take on more ownership of this if they are able to actively participate in the approval process. When employees can review and approve their own timesheets, they can confirm that they are being accurately compensated for their work, including overtime. Employees who can take part in this step of the process gain valuable insight into their own productivity and the contributions they make to their team. Allowing employees to participate in this way builds a culture of mutual respect and collaboration. A sense of value and empowerment grows when employee input is sought after and acknowledged.
Why is it important to track employee hours?
By embracing a data-driven approach to time management, companies can drive sustainable growth and hit quarterly objectives and annual goals. Ultimately, the importance of timesheets for employees isn't just about counting minutes and seconds—it’s about realizing the power of time to support goals from each employee to each team and finally to the company at large. Want automatic insights into budgets, team capacity, and forecasting? Grab your free trial of Harvest.
