What is a Timesheet?

A timesheet is used to record the number of hours worked. The timesheet was born in the 1950s, when the American Bar Association realized lawyers were making far less than dentists and doctors. The A.B.A.’s solution was to have its practitioners sell their services in hours. To track those hours, the legal profession created timesheets.

A company’s greatest resource is its time. When employees are using their workdays efficiently, deadlines are met, deliverables are made, budgets are maintained—and the business is successful. On the other hand, when your workers aren’t spending their hours productively—or they are, but you don’t have total clarity into what they’re doing—it’s incredibly hard to keep all the balls in the air. In the end, organizations that don’t watch the clock typically fail.

The vast majority of agencies these days still use the concept of "billable hours" to charge clients. However, that’s just one benefit of timesheets — and you don’t have to be an agency to get them. Monitoring and recording how employees spend their time is important for every single company (corporation, mid-size business, SMB, start-up), set-up (remote, on-site, partially distributed), and work-force type (salaried, exempt, freelance, contract, temp).

In this guide, we’ll cover timesheet benefits, both for you and your workers; the various types of programs, and their unique pros and cons; how to find the best timesheet app for your needs; and the strategies you can use to get the most out of your timesheets.

Ready? Let’s get started.

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Dave
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Dave Nevogt

Chapter 1
ROI of using timesheets

The ROI of Using Timesheets

Implementing a timesheet policy drives noticeable results—and fast. Check out the many ways timesheets will help your company.

1. Accountability

The number one biggest reward of having employees track their time? Increased accountability. Unfortunately, people waste precious hours (yes, plural) each day on completely useless tasks, including talking on the cell phone and texting (50%), gossiping (42%), surfing the internet (39%), and browsing social media (38%).

And this phenomenon isn’t limited to your lowest performers. According to Salary.com’s annual survey, the number of people proverbially twiddling their thumbs at work is increasingly climbing: from 69% to 89% in one year. That means if you employ 20 people, roughly 18 of them are entertaining themselves on your dime.

The final nail in the time-wasting coffin: millennials engage in non-work activities more often than older workers. This cohort values down time more than previous generations, so they’re more likely to take periodic breaks. If you’re connecting the dots, this statistic suggests employers will see the number of employees taking personal time while on the clock increase each and every year.

You can curb this growing problem by requiring that your workers account for their time. When people know they’ll be asked to provide detailed records of what they did each day, and for how long, they’re far less likely to use their time non-productively.

I’m not trying to suggest people who, say, check Facebook at work are selfish, dishonest, or even lazy. On the contrary, studies show resisting distractions is enormously hard to do. An added benefit to the timesheet is that it gives people a concrete reason to stay focused and engaged.

2. Project Management

Every project experiences bottlenecks and obstacles. However, simply knowing how much time each team member is putting in can make all the difference. As this blog post points out, timesheets are useful to project managers in three main ways.

First, they show team leaders how available their workers are. When you’ve got an urgent or new task you need to quickly assign to the person with the least work, you can check out the timesheets—and see which of your employees still have enough hours left in their schedule to tackle it.

Second, timesheets allow you to prepare for delays. Imagine one of your team members gets sick and is out of commission for a couple days. Since her non-attendance is noted on her timesheet, you’ll remember to redistribute the work or push back the due dates to compensate.

Third, they tell you how long specific workers spend on assignments. For instance, let’s say you ask your designer to create some graphics for social media. He sends you the visuals after one day; on his timesheet, he’s noted six hours. Now, you can estimate how long it’ll take him for similar assignments in the future.

3. Billable Hours

Time management

Thanks to a cognitive effect called the planning fallacy, humans are bad at estimating time. And the more steps involved in a process, the worse our ability to predict how long it’ll take becomes. To give you an idea, most of us could gauge with semi-accuracy how long arranging a dinner for ourselves would take. But an event for the entire team? Our guesses would likely be all over the map.

Unsurprisingly, the planning fallacy has a hugely detrimental effect on our rates. To give you an simplified example, suppose you just asked Jessie, your photographer, and Joe, your copywriter, how much time this week each of them will individually need to finish a client project. Both of them tally up their hours in their heads—vastly underestimating the total—and give you a number. You add those numbers up, multiply the sum by your rate, and send an estimate to the client. Not only do Jessie and Joe end up spending far more time than they’d predicted (cutting into your profits), but they miss the deadline.

However, if you used timesheets, you could see how long comparable projects took them in the past. Your time and rates estimate will be far more accurate; plus, you won’t disappoint the client.

4. Greater Work Satisfaction

Once you know exactly how employees are spending their time, identifying your best, average, and under-performing team members is simple. You might have already come to your own conclusions, but nothing verifies an opinion like data.

This information is highly useful. First, you can deal with the people who aren’t pulling their weight—by giving them a warning, putting them on a performance plan, or in extreme cases, letting them go.

Not only will your entire team’s efficiency improve, but you’ll bolster team morale as well. After all, there’s little people hate more than watching their coworker slack off without consequence.

Chapter 2
benefits of employee timesheets

Benefits to Employees

Even with such a long list of advantages, you might still be unsure about time-tracking. I’ve heard many managers say, "This system sounds great—but my employees will never go for it."

While it’s true many people are resistant to the idea at first, ultimately they discover time-tracking is a win-win. Yes, your employees benefit as well! Let me explain.

Increased Trust and Transparency

Have you heard of illusory superiority? This is a common cognitive flaw that leads people to assume the best in themselves and the worst in others. In other words, you and your managers may be unconsciously attributing the least favorable traits to your reports.

The only way to combat this subjectivity is to get objective data. If your employees are tracking their time, there’s no way you can under-estimate how hard they’re working—because you’ll have the facts right in front of you.

On their end, employees don’t have to worry they’ll be underpaid or underappreciated. Your professional relationship becomes dramatically stronger, because there’s now trust and transparency flowing in both directions.

More Incentive to Focus

incentive to focus

Simply keeping track of their time makes people more productive. Of course, this benefits you (as the employer), but don’t forget, employees want to be more efficient for their own sake as well.

When they’re concentrating on how they’re spending their time, they’ll find ignoring distractions to be much less difficult. Many people become hooked on the more efficient versions of themselves that emerge when they’re tracking their time. In fact, I’ve seen employees start using time tracking software for their side projects and off-the-clock tasks—that’s how much they appreciate the effects.

Less Paperwork

If you’re using an electronic timesheet solution, your employees will have unprecedented visibility into their time. This information is helpful for non-salaried workers, who are typically eager to know at all times how much vacation and sick days they have left. Many software programs will give them all the answers at a single glance, eliminating the need for them to ask another person.

Yet salaried workers and contractors can use this data, too. Let’s say you have someone on-staff who’s planning on taking a couple days off the following week; by carefully monitoring her hours, she can make sure that she’s spent enough time working so that her absence won’t be detrimental. A freelancer, meanwhile, could use his timesheets from the week to gauge how much work he’ll have in the next seven days—which will then tell him how many additional projects he can take on.

Chapter 3
types of timesheet systems

Types of Timesheet Systems

Of course, no two timesheet systems are created equal. Here’s a run-down of your options, from most to least sophisticated.

Paper Timesheets

In the era of cloud computing, it might seem unbelievable that businesses are still using paper timesheets. While physical records are definitely becoming outdated, they do have two advantages: cost and simplicity.

Printing a huge stack of paper timesheets is relatively cheap, especially when you compare it to buying software. (In fact, here is a free timesheet template and a free time card calculator.)

Paper timesheets are also simple; you hand copies to your employee, they fill them out and turn them in, you approve them, and you’re done.

But although paper timesheets might be better than no time-tracking system at all, they’re still incredibly flawed. Employees lose them all the time; not only does this throw off all of your records, but many employees will forge replacements.

Plus, reconciling paper timesheets makes the chance of human error really high. Add the strong possibility your numbers are wrong with the probability one or more of your employees forged or didn’t turn in their hours, and suddenly, your data is so inaccurate that it’s useless.

That’s not to mention filling out a paper timesheet is both tedious and inconvenient. Let’s be honest, most workers will resent the chore.

Spreadsheet Timesheets

spreadsheet timesheets

Asking employees to track their hours in a spreadsheet is one step up. Unlike a paper timesheet, it’s incredibly difficult to lose, damage, or destroy a digital timesheet. In addition, employees tend to like this option more because pulling up an Excel spreadsheet and plugging in hours is fairly quick and easy. And when it comes to cost? Well, thanks to tools like Excel Online, Google Sheets, and Ethercalc, this option is extremely low-budget.

If you’re going to take this route, I suggest checking out Zapier’s round-up of the 12 best spreadsheet alternatives.

However, it’s still problematic. There’s an enormous amount of trust involved in asking employees to manually record their hours—and not just trust that they’ll put down exactly the right amount of time (no more, no less), but that they’ll be able to accurately estimate that time in the first place.

According to a study from AffinityLive published on Harvard Business Review, the typical worker is horrible at filling out timesheets. A staggering 40% of people don’t track the time they spend answering or sending emails, despite the fact this chore takes up a large percentage of their workdays. Only three in 10 people "always" or "often" track the time they spend in their inboxes.

The result? Each worker is responsible for a $50,000 decrease in revenue… per year. The firm estimates that, in total, erroneous timesheets cost the U.S. economy $7.4 billion every day.

You might be wondering why people are so unreliable when it comes to this particular task. AffinityLive suggests it’s not their fault—since it’s hard to log your activities as they happen, "many people deal… by spending Friday afternoons trying to remember what they did over the course of a week in order to fill out their timesheets."

It’s therefore not shocking their estimates (which are taking place several days later) are off.

Manual Time-Tracking

As you can see, making your timesheet system easy for employees is crucial. Without a relatively frictionless experience, you’re not going to get good data.

Software that enables employees to track their time can be a solution. These tools still require your workers to do something—such as turn an electronic timer on and off, or tell the platform which projects or clients they’re working on—but they definitely automate a lot of the process.

Because employees are only minimally involved in the process of time-tracking, they’re far likelier to participate. Unsurprisingly, that means the information you’re getting will be closer to reality.

These apps also usually show user data over time, which can be really helpful and motivating for individual workers. Traditional timesheets only display a person’s hours from the last week or month; a digital timesheet, on the other hand, can show how much they’ve worked over the past 30, 60, 90 days, or custom date range.

Yet we’re ignoring the elephant in the room: accountability. You’ve already seen the statistics showing even the most well-intentioned people waste time at work, and unfortunately, most employees aren’t going to reflect this wasted time on their timesheet.

Your numbers will probably always be inflated, meaning that you won’t reap the full impact of those benefits I discussed.

Automated Time-Tracking

Luckily, there’s a solution. Automated time-tracking software like Hubstaff takes the ease and simplicity of manual software to a whole new level—when your employees begin and end their workdays, all they have to do is press "Start" and "Stop," respectively. It doesn’t get more effortless than that.

Since Hubstaff and similar platforms monitor user activity, you’ll never have to wonder if your timesheets are accurate again. Random screenshots of their screens give employees an incentive to stay focused; however, if they’d like to, say, check Twitter, they can pause the timer, browse through their newsfeed, and then restart the timer when they’re done.

You get instant clarity into what each team member is working on and how far along they are, which every project manager knows is invaluable. Also handy: you can see exactly which URLs and apps specific employees are using. Use this information to guide your tools and resources investments; for example, if your reports use Photoshop constantly but barely touch Zeplin, you’d want to re-subscribe to the first and drop the second.

Your HR director, accountant, or payment manager will immediately benefit from this software as well. It makes payroll automatic. Since you know every submitted timesheet is right, there’s no need to go through a lengthy approval process; furthermore, you can integrate the software with your payment platform (like PayPal, Payoneer, and Bitwage), so the correct funds are automatically transferred to your workers’ accounts.

Some platforms, including Hubstaff, even include scheduling functionality. With this feature, you can add one-time or recurring shifts to your work calendar. If someone doesn’t show up or the schedule is changed, you’ll get a handy email alert, giving you the power to resolve issues before they blow up.

Chapter 4
optimal timesheet system

How to Choose the Optimal System

Once you’ve decided to invest in automated time-tracking software, the next step is figuring out which software.

First, think about what you’d like the platform to include. Do you want time-tracking, and only time-tracking? Or do you want an all-in-one system, so you can handle timesheets, invoicing, payroll, scheduling, and project management from a single dashboard?

Next, factor in your type of company. Will you be sending out billable hours to clients, or are you using time-tracking solely for internal purposes? If it’s the former, look for the option to download or email client versions of your reports.

After that, you should consider how many people will be using the software. Small teams usually require less robust systems, for obvious reasons. Larger teams, on the other hand, will benefit from a whole range of features. Furthermore, will you have different types of workers on the same platform? For instance, many of our clients use Hubstaff to track time for both their freelancers and their full-time employees. Because Hubstaff’s settings can be customized for all kinds of workers, this set-up works out well; however, some tools won’t support different use cases. And while you’re thinking about usage, it’s worth reflecting on scalability. Sure, a solution might work for you right now, but make sure it will also work when you’ve added 10, 20, even 30 more people to your team.

The way your employees work is also important. Do they work from home, or in the office? A little of both? If they need to log hours away from your physical workplace, then on-site software won’t suit your needs. Would you like your team members to have access to a mobile app, as well as a desktop version? Finally, do your employees frequently travel to other locations for work? If so, you’ll need a system that enables GPS and location tracking.

Time and Attendance Software Features

Having a checklist of features will streamline your buying process. In addition to traditional time logging and reporting functionality, here are the other common add-ons:

  • Real-time overview of who is present and who is not, who is actively working and who is taking a break, and who is close to overtime
  • Historical data for attendance and productivity
  • Vacation time and sick leave management, including the ability to approve requests for time off and keep track of days accrued
  • Employee scheduling
  • Location and GPS tracking
  • Accounting and invoicing integrations
  • Accountability features (periodic random screenshots, activity levels, etc.)
  • Project management capabilities

Other Things to Consider

After you’ve developed a comprehensive idea of the features and functionalities you need, you’ll also want to think about price, reliability, and support.

For example, some organizations charge a single enterprise license fee, meaning once you’ve bought the rights to use the software, you can add as many employees as you’d like.

Others (like Hubstaff) charge based on team size, which gives you the flexibility to adjust your plan to your changing workforce and only pay for what you’re using.

Being able to choose from several plans is also useful. You may not need all of the features of the most advanced plan, but the most basic plan might not suit all of your needs. Since every team is different, most one-size-fits-all solutions end up not fitting anyone.

Don’t forget to look into each platform’s definition of a user. Some platforms count everyone who’s ever logged in or used the tool as a "user," meaning that you could be charged for employees who stopped working for you months ago. In general, I recommend looking for a product that distinguishes between "dormant" and "active" users—and only counts the second toward your fees. This distinction is especially important if you hire people on a per-project or short-term basis.

Reliability is extremely important as well. Imagine what would happen if your time-tracking software suddenly went down; not only would you lose valuable data, but your ability to accurately pay your employees or bill your clients would abruptly vanish. Check out each option’s customer case studies and third-party reviews to make sure you’re buying a solid product.

Last, but certainly not least, research the level of support you’ll get with each platform. Is there a well-written and in-depth knowledge base? Are there support representatives ready to help you with any issues—and if so, are there several different ways to contact them (chat, phone, social media, email, etc.)?

Chapter 5
timesheet apps

Timesheet Apps

Ready to make the leap to timesheet software, but not sure where to begin? Here’s a run-down of the top apps.

Hubstaff employee timesheet app

Hubstaff

If you’re looking for simple, easy-to-use online timesheet app your employees will love , Hubstaff is a great option. The software is always running invisibly in the background, so the your employees can simply press the timer when they want to start working and press it again when they’re done.

You’ll see who’s online and offline, their activity levels (color-coded so you can take a quick glance at any moment), and how close each person is to reaching their set hours for the week (if that’s a feature you’ve enabled).

Plus, Hubstaff offers optional random screenshots and URL/application tracking. This data is incredibly useful if you’re trying to improve team efficiency.

The software benefits employees as well, as it ties into your payment system. Once you’ve chosen a pay period (weekly, twice a week, bi-monthly, or monthly), your workers will automatically be paid for the time they’ve worked.

Hubstaff even provides GPS and location tracking (for employees who travel or work in the field, like sales representatives, for instance) and attendance scheduling (for those who work in shifts).

You can effortlessly export reports as PDFs, CSVs, or Quickbook files.

ClickTime

ClickTime

Want to give your employees an uncomplicated, straightforward way to fill out their timesheets? ClickTime might be the right fit. It boasts a minimalist time entry interface platform: After a user logs in, they pick the appropriate client, project, task, and number of hours.

At the end of a reporting period, they simply press "Submit timesheet." Conveniently, employees can enter time both on their computer and phone (via a mobile app).

In addition to time logging, ClickTime also lets workers upload receipts. You can approve or deny the expense from the same platform you use to approve or deny hours.

Timesheets

Timesheets

Timesheets is a cloud-based solution for time tracking, project management, and expense reports. It’s best for on-site employees, as it records their physical presence rather than their digital activity.

People electronically punch in, giving managers a real-time overview of who’s at work and who’s missing. Furthermore, employees can categorize their timestamps, add notes to their entries, and request time off.

Timesheets gives you a lot of flexibility—depending on what you need, you can have workers use a timer, make daily project entries, or fill out their timesheets at the end of the week.

The platform also enables expense tracking and reports. This option comes in handy when you have traveling employees; for instance, if you hire technicians, they can track their mileage, hours, and on-the-road expenses, then turn in their payment requests to a single place.

Tsheets

Tsheets

Tsheets is pretty similar to Timesheets; in fact, their features are almost identical. With Tsheets, you get mobile and desktop time punching, optional GPS tracking, PTO and vacation requests and approvals, and employee scheduling.

This tool also comes with employee reminders. If your employees are always forgetting to clock in and out, being able to send them a friendly message is an effective way to boost the quantity and quality of submitted timesheets.

However, it’s worth noting that Tsheets (and Timesheets) doesn’t show you what your employees are working on—only that they’re working. Many of the benefits of time tracking go unrealized if you don’t have real-time insight into your workers’ progress and productivity.

Chapter 6
introduce employee timesheets

Get Team Buy-In

Once you’ve decided on a system, it’s time to get your team’s support. Sure, you could tell everyone, "Here’s what we’re doing; if you don’t like it, I’m sorry." But the problem with this dictatorial approach is twofold: first, it demonstrates poor leadership and a lack of concern for your employees, and second, you lose the opportunity to rally some excitement around the plan.

You want your workers to be motivated to fill out their timesheets or use a time-tracking system. Not only will the results be more accurate, but you won’t be creating any unnecessary resentment.

Be Clear On the WIIFM (What’s In It For Me?)

It doesn’t matter how wonderful someone’s character is—if you want to convince them to do something, show them the WIIFM (What’s In It For Me?).

I suggest referring to the top three benefits of timesheets for employees that I covered earlier, specifically: higher productivity, less paperwork, and greater transparency.

Depending on which system you implement, your team members will also see other gains. For example, if you use Hubstaff, you can guarantee your workers that they’ll always get paid on time, and with zero effort on their end.

Use a Free Trial to Find a Champion (or Five)

If you’re considering a software system that offers a free trial, you’re in luck. The "try before you buy" period is the perfect opportunity to find an internal champion for the platform—who can then sell it to their coworkers.

This technique is used in sales all the time. Because people are more likely to listen to and ultimately agree with an opinion from a peer than an order from their boss, it’s incredibly powerful.

Your first step is looking for someone who’s already interested in the solution. As sales expert Richard Ruff points out, you should consider multiple people before settling on the one with the greatest potential.

During the trial, your champion should take an active role in talking to their colleagues, figuring out what they like and don’t like, and promoting its ROI. The great thing about champions? One begets the next. By the end of your 30 or 60-day trial, half of your team could already be sold on the new system.

Provide Positive Reinforcement

After the training wheels are off and your team is officially onboarded, make sure you provide plenty of positive reinforcement.

Recognition is one of the top two drivers of employee motivation—yet almost 80% of workers haven’t received even a "Thank you" from their manager in the past six months.

With that in mind, use the timesheets system to your advantage. Let’s say you use Hubstaff, which shows you how productive each employee is being. Is one of your workers consistently productive? Don’t let his efforts pass by the wayside. I recommend shooting him an email saying, "Hey, thanks so much for your hard work. I’ve noticed you’re on the ball day in and day out, and I really appreciate it."

This quick comment will make your employee feel great. Plus, he’ll be even more incentivized to use the tool going forward.

Implement Creative Rewards

employee rewards

In addition to more traditional forms of recognition (like saying "thank you"!), some agencies have adopted fun, imaginative methods for motivating employees to fill out their timesheets.

Minneapolis-based agency Colle+McVoy, for example, has created the TapServer: a "multi-keg beer deployment system" that uses RFID tags to see if the thirsty person has filled out their timesheet. Everyone who’s turned in their sheet that week gets a pint.

JWT Brazil also uses booze, but its system is a little more extreme. The agency has a stocked fridge that only unlocks once all the timesheets are in—if a single one is missing, the team has a dry night.

Looking for some non-alcoholic inspiration? I love how The Martin Agency does things. They keep track of who’s filled out their timesheets with a list (so low-tech, but so easy), and whoever’s on the list gets to enjoy a gourmet breakfast, barbeque lunch, and unlimited candy and hot chocolate.

Of course, these rewards aren’t possible for remote workers. If you’re hoping to treat people from far away, go for a gift card, ebook, or fun or useful gadget. Alternatively, send them a delicious snack in the mail.

Log Your Own Time

"You expect your employees to track their time. It is a good idea to show them that you are accountable as well," explains Yast writer Rikke Westvig.

She points out that when you and your managers track your own time, you demonstrate solidarity with your reports. Plus, you’ll probably discover pockets of time in your own schedule that you could be using more efficiently.

Transparency is one of the most powerful yet under-utilized tools available to leaders. You can instill immense trust and respect in your team simply by using the same system as them and sharing your results internally.

Don’t Penalize Employees

I’ve covered how to use positive reinforcement and why it’s so effective. You may be thinking, "If one method is good, two has to be better—I’ll use the carrot and the stick."

However, I highly recommend against negative reinforcement. Research proves rewards are far more persuasive than punishments; moreover, if you’re too aggressive with your penalties, team morale will shoot down faster than you’d believe.

So if some of your employees don’t turn in their timesheets on time or at all (or if you’ve installed software, but they don’t use it), don’t penalize them. Instead, have an honest conversation about why they’re struggling to fulfill this task. Do they simply forget? Are they worried about the consequences of submitting their time, because they know they’re working less than they should?

In some cases, you may need to let go the people who can’t or won’t adopt the system. But that should be your last option, and it should come after you’ve tried to resolve the issue in a friendly, open, empathetic way.

Never Withhold Pay

Whatever you do, do not withhold pay from employees who haven’t submitted timesheets. In an effort to get people to turn theirs in on time, some employers have started keeping paychecks.

Not only does this move fall squarely in the "negative reinforcement" category, but more importantly, it’s illegal. You must pay people for their time. Even if you don’t know how much they’ve worked because you don’t have their timesheets, the law says that’s your problem, not theirs.

Here’s what you can (and should) do: link your time tracking system to your payment tool. To give you an idea, many of the agencies who use Hubstaff also pay their workers through the platform. Employees and freelancers implicitly understand that tracking their hours is the easiest, quickest way to get paid for those hours. Consequently, they don’t need any extra encouragement to use the software.

Chapter 7
timesheets resources

Timesheets Resources

Free Timesheet Templates

Free timesheet templates that you can download and use how you like.

Hubstaff
All About Timesheets

The various types of timesheets as well an look at their history.

Wikipedia
Employee Timesheet Software Options

Five of the best options for employee timesheets.

Hubstaff Blog
The Importance of Timesheets

Why timesheets are so important in professional services.

Axium
How Timesheets Improve Your Business

A look at how timesheet software can have a positive impact on your business.

Hubstaff Blog
Get Your Employees Submitting Timesheets Faster

Tips on how to get your employees to turn in their timesheets when you need them.

Hubstaff Blog
Work Smarter with Employee Timesheets Software

How to make your life and the lives of your employees easier with timesheets software.

Hubstaff Blog
How to Pay Your Remote Employees

Find the best way to pay your team with this comparison of the most popular payment services.

Hubstaff Blog
Workers are Bad at Filling Out Timesheets

See just how much inaccurate employee timesheets end up costing businesses.

Harvard Business Review
The Benefits of Time Tracking

An infographic that details the many benefits of time tracking to employees and employeers.

Hubstaff
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