How to choose the best time tracking software and systems

Choosing time tracking software or services for your organization requires a thorough assessment of your current business operations. Here's a look at key features to keep in mind.

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Tracking, measuring, and accounting for an employee's time is an essential part of business enterprise management, regardless of industry, product, or service. Determining how long a product takes to manufacture or how many hours a service took to complete establishes the basis for calculating cost, price, and ultimately profit.

In generations past, businesses relied on rudimentary tools like the timeclock and manual timesheets to track employees and the cost of their labor, but these days automated software and services are called upon for that management function. By employing features like real-time tracking, versatile timesheets, project management, cloud computing, and mobile compatibility, modern software and services not only generate accurate time data, but also increase efficiency throughout the organization.

Choosing the right time tracking software or service for your company requires a thorough assessment of your current business operations, especially as it relates to employee activity, the manufacturing process, and the determination of billable hours for services. Only with such an assessment in hand can you begin to choose characteristics and features that will improve your time tracking capabilities and overall operational efficiencies.

A systematic approach to assessing and choosing the best time tracking software and service for your business will improve the selection process and allow you to document it for future reference.

NOTE: Our premium sister site, Tech Pro Research, offers this article as a PDF download, along with a tool to help you document your research.

Type of system needed

Before you can begin evaluating features of time tracking software and services, you must determine why you are tracking time. Some of the questions you need to answer during this assessment process include:

  • Are you trying to determine the cost of labor required to manufacture a product?
  • Are you looking for a system to track billable hours for the services your business provides?
  • Will your choice of software be required to track time spent on specific projects? Specific products? Specific tasks?
  • Will your time tracking software or service be used to calculate employee payroll? Will that include payroll tax calculations as well?
  • Will your time tracking software or service be used to calculate invoices for products or services?
  • Will employees use the new system to manage time off, vacations, personal days, and other self-management functions?
  • How much integration with existing systems (project management, payroll, human resources, finance) will be required of your new time tracking software or service?
  • What reports and analytics are required of your new system? Is customization of reporting methods and portability of data a priority?

SEE: Time management tips for tech professionals (free TechRepublic PDF)

Potential benefits

At first glance, tracking employee time may not seem like a difficult or high-priority activity requiring specialized systems, but the benefits of effective time tracking software and services are compelling:

  • Increased productivity. Modern time tracking software is used to optimize the productive capacity of your business workforce by defining clear goals and deadlines and holding employees accountable for their activity.
  • Less effort for time capture. Manually tracking time, especially if your employees' time must be allocated to several projects during a day, can be extremely tedious and time-consuming. Automated systems, once adopted by your workforce, can track time without the unproductive overhead of manual systems.
  • Transparency. For service providers who get paid by the hours worked for a client or on a project, accurately tracked and recorded time, backed by presentable documentation, can prevent costly and time-consuming disputes over invoices.
  • Improved accuracy. Consistent time tracking increases accuracy and makes strategic planning more effective. It can be invaluable to have a reliable estimate of when a project will be completed because you can see exactly how long each activity takes and make predictions with that information.
  • Empowered employees. Under the right management, employees with a clear understanding of when projects are supposed to be completed can take ownership and adjust workflow as needed to meet deadlines.

SEE: Remote working 101: Professional's guide to the tools of the trade (ZDNet)

Features

There are dozens of major vendors of time tracking software and services, and practically all offer a complete set of basic features. However, finding the niche features you determined were important during your assessment should narrow your choices significantly. When considering each feature and characteristic, be sure to also factor in ease of use and the willingness of your workforce to adopt the new system.

Time tracking

Obviously, all the software and services in this category should be able to track time. The differentiator is how well they do it. The more automated the system the better, but no time tracking system can be 100% accurate—look for software and services that allow you to adjust tracked time easily when necessary.

Online timesheet

Whether tracking time for a specific project or just in general for payroll purposes, a centralized, online location for timesheets, individually and collectively, is a must for modern businesses. This is where cloud services may offer an advantage.

Project management

If your business is driven by the completion of projects rather than products or services, your new time tracking software or service must have competent project management features.

Invoicing

Accurately and properly invoicing for services and products often requires the accurate tracking of a worker's time. If you already have an invoicing application, you should look for integration features. If you require an invoicing system, it may be possible to find that feature in one of the time tracking solutions.

SEE: SMB best practices: Templates for creating estimates, invoices, and billing statements (Tech Pro Research)

Alerts and notifications

Although highly dependent on the work environment of your business, the ability to notify management or employees of problems regarding project completion, or overtime, or other time management concerns, could be of paramount importance to your operations. All time tracking software and services will have some form of alert system; look for features that match your business needs.

User management

For your business, it may be important for your time tracking system to categorize functions based on teams or departments versus projects or products. In those cases, you should look for systems that provide those types of features.

Tags

Particularly useful for larger organizations, the ability to tag or categorize employees, teams, projects, or even parts of the workday will help query data during the development of specific reports and the application of analytics.

Reporting

One of the primary benefits of a modern sophisticated time tracking system is the ability to transform the data produced into readable and actionable reports. The more options and flexibility offered by the system the better—look for reports, dashboards, graphs, and mobile device access.

Time-off reports

A specialized tool, often overlooked but extremely important for workforce planning, is the time-off report. Particularly in labor situations, knowing how many workers you have and what skills they bring with them can be the single tidbit of information that makes a workday productive.

Team view

Another potential productivity enhancing feature is the ability to view time tracked activity at the team or department level. The information this feature provides can be beneficial to both management and individual team members.

Analytics

One of the biggest benefits of an automated time tracking system is the ability to transform the raw data generated by employee activity into usable information. More sophisticated time tracking software and systems may reveal hidden patterns of behavior that could transform business operations.

Payroll integration

No matter how well you track an employee's time, at some point that employee will have to receive compensation for their work. If your time tracking system does not also calculate payroll, it should, at the very least, be able to transfer data to an application that will.

Exportable data

Complementing its own analytical capabilities, your choice of time tracking software or service should be able to export data into formats other applications can use.

Offline availability

While cloud-based systems may offer certain advantages, you time tracking system must still be able to operate when the cloud is not available. Loss of an internet connection should not shut down your business operations because employees can't log their time.

SEE: Feature comparison: CRM software and services (Tech Pro Research)

Mobile device accessibility

With an always-connected mobile workforce, the ability to reach your time tracking system should include mobile and remote devices. Your choice of software should reflect this reality.

Archiving

Time and payroll records contain basic business management information and should be archived as part of ordinary recordkeeping. Your choice of time tracking software or service should have an archive feature, preferably one that integrates with already established protocols.

Technical support

As is to be expected with any business-related software or service purchase, technical support should be available 24/7 and that support should be responsive and effective.

Pricing

The cost of acquiring time tracking software or services varies widely with the vendor and the features offered. All reputable vendors should offer a free trial period where their software or services can be thoroughly tested. Some vendors even offer a free version of their software, assuming your business meets certain requirements.

While it varies widely, you can expect the overall price for time tracking software and services to range anywhere from free to $25/month to $10/user/month. Large enterprises may have to request a formal price quote.

Relationships

The business relationship you have with the vendor of your time tracking software or service can often be a key factor in your decision-making process. In many ways, you are forming a business partnership with your vendor and will want to look for a relationship that fits your business culture and your expectations of performance.

Measure and rate relationship factors like these to determine the best fit for your business:

  • Ease of use
  • Quality of reports
  • Availability and responsiveness of support
  • Professionalism
  • Level of expertise and experience

Major players in the time tracking software industry

There are dozens of vendors in the time tracking software and services industry, but a few major players come up again and again in online surveys of the industry:

Caveats

Like it or not, the modern business enterprise must conduct its operations in a highly regulated environment. Time tracking employee activity could raise several privacy issues as well as alienating your workers. Automating time tracking, while potentially beneficial to productivity, should not be used as a blunt instrument to micromanage employee activity. Subtly combining newly created efficiencies deriving from better time tracking with other productivity measurements approved and accepted by stakeholders will be more acceptable to all involved.

Without a doubt, widespread adoption by employees and management of any new time tracking software or service should be the primary goal. Achieving buy-in from all stakeholders before deploying a new system, including training and setting of measurement parameters, will make for a smooth and successful transition. Documentation showing exactly what is to be achieved with a new system, and explaining how that system was chosen and why, is an important first step in this process.

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