3 Time Tracking Software Fails Every Business Owner Should Know

Time tracking tools are quick becoming popular in various industries. More and more businesses are choosing to implement this system to improve employee efficiency and increase revenue. However, with so much focus being put on how almost miraculous these tools effects are, most forget that these too have challenges.

But in order to fully appreciate its benefits and understand why it doesn’t always work, you will first need to know exactly what it is.

What Is Time Tracking Software?

One of the most valuable yet often overlooked business resources is labor hours. It has such an impact on a company’s profitability that not giving it enough attention can be disastrous. Inaccurate recording of labor hours can result in loss of revenue.

According to CronForce, a business solutions provider, time tracking software is a program that allows you to accurately keep track of the time spent working on a project or task. It takes the guesswork out of numerous business processes.

Accurate time tracking helps improve a company’s billing process. For example, a plumbing company that maintains the plumbing system of an apartment building often charges by the hour. By using a time tracking software, plumbers can record the amount of time spent on working at the apartment building. That company’s billing department then can ensure invoices are neither over nor under billed.

Time tracking tools for business can also ensure that project have the right amount of people assigned to it. Historical data on the number of hours each employee spends on their task can show if sufficient people are working on the project. If a certain task takes about 16 hours, then in order to complete it within 8 hours, two people will need to be assigned.

Without time tracking tools, the risk of missing deadlines is a lot higher.

In addition, the tool also ensures that employees are productive during work hours. The best time tracking tools allow individuals to record time spent on specific tasks so it will be easier to measure his or her efficiency.

Different Types of Time Tracking Tools

The importance of time tracking in business is certainly obvious. And this is why, choosing the right one is crucial. Below is a list of the different types of time tracking tools available.

1. Stand Alone – This is one of the most common types of system. The software simply records the employees’ time in and time out. It counts the labor hours and generates a report that can be used for payroll purposes. However, it does not include the specific tasks the employees are working on. Data is limited but it still delivers basic results.
2. Integrated or Linked– This type of system is becoming more popular as companies look for ways to improve their business processes. Time tracking is integrated or linked to other departments such as accounting, billing and payroll.

Reports no longer need to be manually generated and transferred to other systems. This reduces discrepancies that can be due to human error. For example, when preparing salaries, manual typing of the labor hours in the payroll system is a tedious process. A mistake with a single digit can be disastrous and one that can be avoided with an integrated time tracking software.

Billing external clients also become an easier task with this type of system. Since the labor hours are automatically generated into the billing and invoicing system. Inaccurate invoices become less likely.

Benefits of Time Tracking Software

Regardless of the size of the company, businesses are choosing to automate their system. And this is because of the benefits time tracking tools bring.

Time tracking tools can increase the profit of a business. It is able to do so in different ways. In order to become profitable, a business must be able to manage costs and increase revenue.

One of the best ways to improve revenue is to ensure that accurate invoices are sent out to external clients. When billable hours are processed efficiently, the company gets paid the right amount. While this may seem trivial to some, inaccurate billing can have a huge impact on the business’ revenue.

Time tracking also helps monitor and empower employees. Employers and managers are able to measure attendance and efficiency without the need to breathe down anybody’s neck. Employees are given a chance to manage their productivity without the added on pressure of someone constantly checking in on them.

Labor is one of the most expensive operational costs, so being able to efficiently manage it with a time tracking system is crucial.

In a nutshell, time tracking can drive profitability by improving processes that increase revenue and reducing costs through efficient management.

Why Time Tracking Fails

While time tracking certainly delivers solutions that company’s benefit from, it is important to understand the flaws of this automated system. Below are the top 3 reasons why time tracking tools fail.

1. Manual Override – Most systems rely on the honesty of employees on recording their attendance and work hours. Individuals simply key in the time they clock in or the number of hours they spent working on a task. So even if an employee came in half an hour late, they can still report that they came to work on time.

Offices with few employees are able to control this more efficiently as there aren’t a lot of people to monitor. However, companies that have more manpower or employees that work at remote offices are more vulnerable to this fraudulent practice.

Other systems base the recorded time on the clock of the workstation used. While this may seem more efficient, there is a feature that affects it accuracy. Supervisors or even the employees themselves are given access to manually override the information recorded. So despite the system initially catching tardy employees, these can be changed to reflect otherwise.

When inaccurate data is recorded on the system, it makes the automation virtually useless. Labor hours can be padded which will certainly have an impact on billing and accounting. External clients may be billed for more hours than what was actually rendered and the company doesn’t have an accurate view on the activities of its employees.

Falsified overtime or hour worked is listed by Law Explorer, an online legal resource as one of the categories for payroll fraud. So, while the system does improve time tracking processes, not implementing policies with regard to keeping the data secure may have disastrous results.

2. Insufficient Details – Companies often use the data recorded in time tracking tools as a way to monitor and measure the efficiency of their employees. This allows employers and managers to plan out their strategies on how to make the business more productive and profitable.

However, systems are not always set up properly to be able to capture the necessary details. For example, if a company had a training team, it might only have three tasks listed. These would be training, admin tasks and coaching.

With the limited choices, the Training Manager will be unable to identify how efficient each trainer is. If one trainer lists 4 hours under admin tasks and another one only lists 2 hours, then it would be difficult to determine the discrepancy.

In order to address this, the specific actions such as creating reports, preparing training materials and answering emails that fall under admin tasks are identified. This will make it easier for management to provide solutions to improve efficiency.

However, the opposite can also have a negative impact on time tracking. If there are too many options then employees might simply pick anything at random to save time.

To be able to gather the needed data, employers and managers need to ensure that the system is formatted properly. It is also ideal to revisit the way the system is set up and make changes based on employee behaviors. For example, if there are a lot of incorrectly recorded activities, then it may be beneficial to simplify the list.

3. User Error – While payroll fraud is a serious problem with time tracking software, it isn’t always the reason behind inaccurate data. There are times when employees simply get confused or make a mistake when using the system. The dilemma is on how to identify which is which.

Some employees might erroneously key in the wrong time for a variety of reasons such as pressing the wrong key or even forgetting to clock out. Regardless of whether it was deliberate or accidental, the data will still be corrupted.

Companies can address this by ensuring an efficient roll out or on-boarding process on how to use the system is done. This includes giving everybody time to get used to the time tracking system the business will be transitioning to.

Companies also need to set up a process to help employees get help in correcting their mistakes before it impacts payroll and other business units. This should be a process that doesn’t consume too much time and quickly addresses employee concerns regarding the system.

Despite these challenges, time tracking tools reviews by other users show that it is still software that’s worth investing in. The benefits still outweigh the challenges making it a system businesses should take advantage of. Visit CrowdReviews.com to see a list of time tracking tools providers that can address your business needs today.