Beyond simply understanding how long someone has worked, tracking your team's time using time tracking apps like Hubstaff provides many benefits.
For instance, according to The Lean Advantage Report, Hubstaff users who integrated AI tools cut down 30 minutes of unproductive time per person per day. For a 50-person team, that translates to over 500 hours saved each month and an annual cost savings of $150,000.
Here are sixteen reasons time tracking could benefit your business and employees.
1. Increase profitability
Accurate time tracking directly correlates to profitability. With accurate time tracking, timesheets, and payroll, you can gain better visibility into billable vs. non-billable hours, cut down on unwanted overtime costs, provide better project estimates to clients, ensure compliance standards are met, and avoid expensive repercussions.
By providing a detailed overview of how individuals allocate their time and resources, time tracking software can also help you eliminate time-wasting activities, prioritize tasks effectively, and optimize workflows.
Further, data from online time reporting empowers organizations to identify areas for improvement, allocate resources strategically, and create a more productive culture that contributes to overall success.
2. Enhanced billing accuracy
Billing is one of the most delicate aspects of running a business—even a small error can lead to legal repercussions or financial loss.
An astounding 98% of upper management is pulled into payment disputes. In fact, a Versapay report found that even over 60% of C-level executives have dealt with lawsuits or threats due to invoice disputes.
Employee time tracking plays a pivotal role in preventing these headaches. Capturing exact hours worked on specific tasks or client projects ensures accurate billing, transparent records, and fair compensation.
3. Data-driven decision making
You can also use your team's time tracking data to make better business decisions.
Time tracking facilitates data-driven decision-making by giving organizations details on how time is allocated across various tasks, projects, and teams. The data generated through time tracking allows for a comprehensive analysis of resource utilization, project progress, and individual performance.
The best time tracking tools provide valuable, real-time data that can be analyzed to make informed decisions. Whether hiring additional resources or optimizing workflows, the data provides a foundation for strategic choices.
4. Set clear objectives
More accurate time tracking aids in setting clear objectives. By providing a detailed understanding of how time is utilized within an organization, you’ll have an easier time scoping projects, developing budgets, and setting goals.
Project management and tracking costs are simple when you have more employee data. By analyzing time data, teams and individuals can identify priorities, assess task durations, and understand where efforts are most impactful.
5. Increase productivity
In the business world, productivity is king. Anything you can do to increase team performance will directly impact your bottom line. For business owners, employee productivity tracking can be a great way to see which projects move the needle.
A time tracking app like Hubstaff allows teams to stay on task with ongoing projects. See where any potential hiccups are in the day-to-day, and use that data to create strategies that help your team be more productive in the workplace.
Additionally, you can access performance metrics beyond just a basic record of your employees' time. With the best productivity time tracking tools, you can see:
Activities that consume the most time
Times when team members are most active
The apps and websites that make teams most productive (or become distractions)
Insights into utilization rates and time spent in meetings vs. working independently
Hubstaff is a time tracking software platform that does more than log hours. With built-in productivity monitoring and workforce analytics, teams can uncover patterns such as focus trends, inefficiencies, and unusual activity. Employees can use these insights to:
6. Improve work-life balance
More and more companies are shifting to remote work, and the 9-to-5 is becoming less prominent. Modern workforces are prioritizing flexibility, so it's up to businesses to accommodate that need.
With more accurate time tracking, businesses can see what work is getting done, manage idle timeout settings, and prevent money leaks. This allows them to offer perks like remote and hybrid work, asynchronous work schedules, and the ability to work from anywhere.
![Image showing work-life blend with work, relationships, health, finances, and more]()
Individuals can use this same data to establish boundaries around their work hours to prevent overwork and burnout.
Time tracking contributes to an improved work-life balance by providing individuals with:
A clear understanding of how they allocate time for projects
Set realistic goals, prioritize tasks effectively
Identify potential areas for increased efficiency
Time tracking not only makes that flexibility possible; it makes it work. A time tracking tool lets employees keep track of their work and create timesheets anywhere and anytime.
7. Manage projects better
Project management can't exist in a vacuum. For businesses to be successful, they'll need people with strong collaboration skills, superb time management, and a great project manager to oversee everything.
Time tracking manages projects better by providing:
A structured framework for monitoring and allocating resources efficiently.
A granular analysis of how teams spend time on various tasks
Insights into potential bottlenecks that are causing project delays
Better resource allocation ideas for project managers
Help make informed decisions to keep projects on track
With a clear understanding of time investment, project timelines, and individual workloads, managers can proactively address challenges, optimize workflows, and ensure team members work on tasks that align with project priorities.
The best time tracking tools make life easier for project managers and businesses. They ensure every team member can track time for projects and tasks to gauge real-time project spending and adjust project scope as needed.
8. Provide transparency
Time tracking allows stakeholders to see a detailed breakdown of how much time is allocated to specific tasks within a project. This transparency provides insight into the progress of different project components, enabling better decision-making. You can establish trust with an accurate record of how much time is spent on tasks.
With time tracking software like Hubstaff, team members can log hours automatically and give transparency into their work, which can help managers keep team members accountable.
![How time tracking helps both employers (better planning, accountability, well-being) and employees (proof of productivity, work-life balance)]()
9. Communicate progress better
As team members track time, they'll be able to let their managers know if they can hit deadlines before it’s too late, making it easier for teams to communicate their needs to co-workers and managers.
Beyond individual contributions, the collective benefits of employee time tracking extend to strengthening team collaboration. As team members communicate their progress and potential challenges, it fosters a culture of openness and mutual support.
10. Improve client communication
Time tracking serves as a powerful collaboration tool for client-facing projects. Detailed breakdowns of time spent not only foster trust but also facilitate open communication between your team and clients. Clients gain a clearer understanding of the intricate details of project development, allowing for more informed discussions and collaborative decision-making.
This transparency strengthens the partnership, as clients appreciate the ability to track project timelines, milestones, and progress in real time. By sharing insights from time tracking, your team can actively involve clients in the project journey, ensuring their expectations align with the efforts invested and adjusting for a successful outcome.
11. Reduced time on administrative tasks
Beyond payroll, time tracking tools help businesses reduce time spent on other admin tasks. The ability to track time for specific tasks and even see real-time spending on a project-by-project basis helps companies visualize how much it costs to add an employee to a project.
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That said, leadership can also apply this same logic to employees' time when they are not working on core tasks. This work might include things like:
Employee pay rates don't usually change based on the type of work you assign to them. Therefore, classifying tasks is a great way to ensure employees are properly utilized.
12. Adherence to compliance requirements
Certain industries like health care, manufacturing, or government contracting must adhere to compliance requirements that mandate accurate timekeeping. Time theft and fraudulent timesheets (even accidental instances) are punishable by law and could result in expensive penalties.
13. Promote accountability
Time tracking is an excellent tool for increasing employee accountability. Especially when businesses have distributed teams across the globe, time tracking becomes a tool for visibility.
Hubstaff survey data shows that 67% of leaders reject the myth that holding remote or outsourced employees accountable is harder. Transparency tools play a key role in maintaining that trust.
![67% of leaders reject that holding outsourced employees accountable is harder.]()
When time tracking is in place, employee accountability increases because:
Expectations are clearly defined. Employees understand their expectations and how their time should be allocated.
Performance becomes measurable. Managers can objectively assess productivity and progress based on tracked hours and task completion.
Work patterns are visible. Teams gain insights into how time is spent, helping identify inefficiencies or areas for improvement.
Focus and ownership improve. Knowing their time is being tracked encourages employees to stay on task and take ownership of their work.
Support and recognition are easier to provide. Time data helps managers spot where assistance is needed and who deserves praise, positively reinforcing accountability.
14. Helps you identify & retain top talent
Leading time tracking software includes detailed performance and activity monitoring features for productivity measurement. This information is especially valuable for managers when identifying high-performing team members.
As a result, time tracking becomes a powerful tool for recognizing and rewarding top performers. This not only boosts morale but also helps retain top talent — and drives long-term success for the business.
15. Eliminates inefficiencies
Tracking employee time can help you see the big picture — whether that’s the time it takes to complete certain tasks or what's causing delays.
For instance, when a knowledge worker is pulled into too many meetings, time tracking tools like Hubstaff will reveal how their focus time has decreased due to these interruptions.
In this instance, managers can help protect the employee’s time by carving out more time for core work.
instead of focusing on core work, this worker spends significant time in meetings. This provides a clear signal of inefficiency. Additionally, time tracking sessions often include activity data, allowing you to spot time wasters more easily.
With time tracking tools, you can:
Identify how much time is spent on specific tasks or projects
Highlight interruptions like excessive meetings
Gain insights into lost productivity or inefficiencies
Detect patterns of low activity or common time-wasters
16. Better task documentation
Another advantage of time tracking is improved task documentation. When employees log their time against specific tasks/projects, it creates a clear, chronological record of what was done, when, and for how long. This helps teams better understand workflows, track progress, and provide accountability—especially useful for billing, reporting, or reviewing project timelines.