Timesheet

What is the purpose of a timesheet?

A timesheet is used for time tracking—to monitor the number of hours employees work, so businesses can track time accurately. Timesheets are essential for recording the hours spent on specific tasks or projects, which helps businesses with payroll processing, project management, and overall time management.

What does a timesheet include?

Employee timesheets typically includes fields for:

• Tracking employee work hours, with time entries noting when employees clock in and clock out during the workday or workweek

• Total hours worked, including overtime hours

• Specific tasks employees perform. The timesheet may have different lines or areas for different tasks.

• Start and end times for work periods, plus the number of hours spent on work time

• Employee hours scheduled vs. employee hours actually worked

Timesheet use cases

Timesheets have many use cases—some related to time management and some to other business functions, like payroll. Below, we’ll go over some of the most common.

Payroll processing

Timesheets are integral to accurate payroll processing, since they allow employers to track employee time and issue payment based on the correct number of hours worked. This helps make sure that employees are paid accurately and on time, every time.

Wage management

Timesheet records provide a clear and detailed account of employee work hours, which helps employers manage wages effectively. They also help track overtime. With these records, employers can project their future needs and accurately budget for wage costs.

Invoicing

Freelancers, or independent contractors, can use timesheets to invoice clients accurately. By tracking time spent on billable tasks, they can be sure they invoice for the proper amount based on the hours logged for their work.

Resource management

Timesheets play a key role in resource allocation. Companies can better plan for future projects and allocate resources more efficiently when they have a clear picture of employees’ work and hourly rates on similar projects in the past. By analyzing past employee performance, employers can project their future needs and budget for resources.

Accounting

For accounting and record-keeping, timesheets provide a reliable source of information on hours worked and labor costs. Accurate timesheet records help businesses stay compliant and organized when it comes to tax reporting and financial audits.

Why do businesses use timesheets?

Businesses use time sheets for many different reasons—we’ll explore a few of them below.

To reduce time wastage

First, timesheets help businesses identify areas where employees could optimize their time. By monitoring work hours and employee productivity, companies can minimize time wastage and make sure their teams are working as efficiently as possible.

To bill more accurately

Timesheets also allow businesses to track client billing and billable hours more precisely. Accurate time tracking can help businesses bill their clients correctly and prevent undercharging or overcharging for services rendered.

To improve project management

Tracking time spent on different tasks can help businesses monitor project progress and timelines, helping them make sure their projects stay on track, on budget, and within their allocated time frames.

To save money

Effectively using timesheets can lead to greater profitability. This is because tracking time helps businesses control their project costs and manage resources more efficiently. When businesses track time accurately, they can better estimate project expenses and avoid unnecessary expenses.

To automate billing and other processes

When businesses automate processes like billing and project tracking, it reduces human error, eliminates hassle, and streamlines workflows. Automation requires using timesheet software, which we’ll cover in more detail below.

Manual vs. digital timesheets

Manual timesheets—from paper timesheets to punch cards to Excel spreadsheets—have traditionally been used for tracking employee work hours. Paper-based timesheets and other manual time cards rely on employees manually recording their work time, which is inefficient and can be inaccurate. 

For a long time, it was common for employees to “clock in” using a time clock or manually log their hours on paper forms. But as businesses continue to evolve in the digital age, many are moving away from manual methods and adopting digital timesheets. Digital time tracking systems streamline time entry and make it more accurate and efficient.

How to choose timesheet software

Considering time tracking software for your business? Choosing the right solution will offer your organization flexibility, ease of use, and essential integrations that meet your needs.

Key features of timesheet software

When selecting a time tracking solution, look for these key features and functionalities.

Ease of use

First and foremost, look for timesheet software that’s easy to use—not just for your HR department, but for all your team members, since this is a tool that’s likely to be implemented across your organization. Look for an intuitive interface that doesn’t require extensive training, so employees can quickly enter their work hours with minimal disruption to their daily tasks.

Multiple ways to enter time data

A flexible timesheet solution should accommodate different types of timesheets, and both hourly and salaried employees should be able to easily record time based on their schedules.

Look for a solution that offers:

• Daily timesheets

• Bi-weekly timesheets

• Monthly timesheets

• Other configurations based on your needs

Time-off requests and approvals

A timesheet system that integrates time-off requests and approvals streamlines the HR process. Employees should be able to request time off directly within the system, and managers should be able to approve or reject requests for maximum transparency and efficient scheduling.

Built-in compliance

To make sure your business stays on the right side of labor laws, your timesheet software should include built-in compliance features. For example, look for a tool that will notify you if employees approach overtime thresholds for their jurisdictions, so you can make sure to adjust their pay to the appropriate rate for their overtime hours when running payroll for that period.

Built-in compliance helps businesses stay within legal requirements, reducing the risk of labor law violations and making issues like audits and payroll disputes easier to navigate.

Mobile app

Having a mobile, self-service option allows employees to track their time and access their timesheets from anywhere. This flexibility is especially helpful for remote or mobile workers who need to log their hours in real-time.

Integration with payroll and other tools

If your timetracking software can integrate with your payroll system and other tools, you can save time on data entry and reduce manual entry errors—plus, timesheet data can easily sync with payroll and other systems.

Automation

Automation features streamline the entire timesheet management process. From automatically generating reports to calculating overtime, automation can eliminate time-consuming manual tasks so your team can focus on work that helps grow your business.

Frequently asked questions about timesheets

Is timesheet software good for small businesses?

Yes—timesheet software can be a good investment for businesses of all sizes. Look for one that is easy to use, integrates with payroll, and offers flexibility in time tracking. Look for features like mobile access, automated time tracking, and compliance tools to streamline your operations.

How do digital timesheets help reduce human error?

Digital timesheets automate time tracking and minimize manual data entry, which significantly reduces the likelihood of human error. Built-in compliance and reporting features further ensure accuracy and adherence to labor laws.