Besides getting their work done on time, what is the most important thing every employee is expected to do? If you guessed ‘accurately record their time worked’ , you’re right. As employers, you expect employees to be diligent about entering an accurate account of how they spent their time on the job. Depending on the work, you might expect time to be submitted hourly, daily or weekly. Without accurate time tracking, you cannot accurately bill the customer.
Instead, you find yourself tracking down employees and logging the time for them, only to find out later that critical details were left out in the transfer of information. Customers are calling to clarify what was done. What should have been a simple task is now consuming valuable time from multiple employees.
Relationship between time entry & project profitability
The ability to run a profitable organization depends on your employees doing their work and tracking their time as efficiently as possible, so their billable time can be invoiced quickly. It’s no surprise that the more quickly you can get an invoice to the customer, the more quickly you will be paid for the work. This is one of, if not the most, important things a company can do to influence positive cash flow. Of course, if the details on the invoice are inaccurate or incomplete, you will spend more time researching what work was completed, reversing and re-issuing corrected invoices. When this happens, cash flow is negatively impacted and your company can become stressed for cash if this becomes the norm.
Importance of time entry at your fingertips
In today’s high tech economy, we expect instant gratification on almost everything we do. Text a friend – immediate reply. Search a website – immediate response. Apply instant gratification to day-to-day business processes for your services organization. Prepare a customer invoice – expect all timesheets to be in the system…only to find some are missing. Knowing you cannot complete the task until all timesheets are submitted, you take a deep breath, collect your thoughts and start reaching out to the employees. When all time is submitted and approved, the invoicing process continues.
Why are timesheets late?
There are perfectly valid reasons why timesheets are late. The employee may be so focused on producing a delivery that they lose track of time and leave the office before entering their time for the day. The employee turns off the computer for the day and walks away before entering their time. Your employer requires time to be entered before end of the business day, Friday. You decide to wait and enter the time worked at the end of the day Friday. Only Friday comes and goes and you realize over the weekend that you forgot.
What is the cost of not having timesheets entered on time?
The answer is simple; most people don’t believe it. Without timesheets being entered, the invoices cannot be sent. If you cannot bill the customer, you cannot get paid. The longer a person waits to record their time worked, the higher the likelihood they will forget the details of where their time was spent. This happens to everyone – young and old.
How do you prevent these issues?
You recognize the importance of enabling your employees to enter their time at their fingertips. Doing so means provisioning a time entry app that works on the device of choice. Whether the employee carries a smart phone or tablet as part of their mobile/remote role or they spend their day sitting in front of a desktop computer, enabling the entry of time at their fingertips is critical:
- Time can be entered as soon as it is worked
- No more late timesheets
- There is no need to follow up with employees for missing timesheets
- Details, for time worked, are submitted accurately because they are fresh in the employees’ mind when entered
- Invoices are generated on schedule
- Customers pay your invoice
The following week starts the process over. Time is worked and recorded as it is completed because you’ve provided them with a tool that works where and when they work. Execution of this repeatable cycle recognizes the importance of allowing employees to enter time at their fingertips.
Example: how time entry software needs to align with how, and where, your employees work.
You manage a business that sells IT hardware and accessories – computers, servers, laptops, etc. Each time a machine is sold, the customer also purchases your services to install, setup, and train on the use of the new machine.
A project is set up for the customer. Each step is a milestone. You know the three steps take a total of three months to complete because you’ve been selling machines and services like this for years. Your policy allows you to invoice the customer after each step is completed. When the project manager tells you the install phase is complete, your accounting staff is authorized to bill the customer.
When they verify that all of the time spent on the install has been approved, if any time is missing, incomplete or needing clarification, the project manager gets engaged in another review. In the event the details are lacking, the employee may be need to be involved to clarify their comments.
Only after all time for that phase is reviewed and approved, will the invoices be generated. Whatever time was required of the project manager or employees to correct/edit timesheets is non-billable.
When the setup phase is complete, the time review and approval process will be repeated. Again, only after the time is approved can it be billed to the customer. When the final step of TRAINING is complete, all remaining time is approved and invoiced.
If someone failed to enter time at any point during the project, you had to write off time. This cuts into your profit margin. This is why it is critical to check for missing, incomplete, and inaccurate timesheets prior to billing each phase of the project. Don’t leave money on the table!
Why would you have missing timesheets? There are many reasons:
- ‘I forgot’
- ‘The software was not accessible’
- ‘I only had my tablet/phone with me, and the software doesn’t run on a mobile device ’
If you’ve heard these reasons, it’s time to talk to your software provider or look for a better solution. Until you fix the root problem, you will be accumulating non-billable time, which translates to time that must be written off. Don’t be a victim of poor software. Instead, look at better software alternatives that align with how your employees work. A great time entry solution can take the pain out of time entry. The right time entry software makes it easy for the employee to capture their time worked and helps your organization achieve great profit margins.
Evaluating your time (and expense) tracking solution
Sometimes employers think they have a good time tracking solution in place when they don’t. Let's review how you can tell if you have a good time tracking solution in place:
- Do you know how long it takes your employees to enter time?
- Do employees complain that it’s too hard or it takes too long to enter time?If so, do you know why?
- Do employees submit hours with insufficient details on what work was performed?
- Are you missing timesheets when you are ready to invoice?
If you cannot answer these questions quickly and confidently, it’s a red flag that you need to revisit the time entry software your company is using. There should be no excuse for time being missing, late or incomplete.
Employers should demand their time tracking software make it easy for employees to perform this basic task. In fact, time and expense software should conform to the employee’s schedule, meaning if the employee needs to enter time hourly they can do it. If they need to enter it daily or weekly, they can do it. If they need to enter time on the job site, they can do it. If this is the single improvement you make to the day-to-day routine for your employees this year, you will shorten the billing cycle, shorten the number of days until paid, improve cash flow and increase your profitability
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