20 Top Time-Tracking Best Practices

The history of time construction reveals its clear links with work. Today, time is strictly and uniformly enforced in contemporary culture that we tend to forget it is not innate to the natural world; it is a man-made construct intended to describe, monitor, and control industry and individual production.

“We take this concept of time, this amorphous entity, and translate it into one of the most objective tangible entities: money,” says Robert Levine, a psychology professor at California State University-Fresno and author of A Geography of Time. “A person gets paid by the hour; a lawyer gets paid by the minute.

Time perception is very tricky. One may feel like slaving away for a long time only to find that barely an hour has passed. The perception of time is subjective, therefore we need an objective way to evaluate how we spend our time. Here time tracking comes in handy.

But make no mistake: time tracking is yesterday's news. In medieval Europe, for example, wages were daily, and they were determined by the natural mode of telling time in that age: the sun.

The industrial revolution in the 19th century bought the technology for more precise clocks and, with them, heightened attention to the hourly work schedule. Employers started to carefully track work attendance, with timestamps marking employees’ arrival and departure every day. Meanwhile, companies also began to adopt principles of scientific management (often called “Taylorism” after its founder, Frederick Winslow Taylor), to try to increase production.

You have most likely heard it before – do not forget to track your time! Time tracking is key to understanding how you spend your time, personally and in business. It is key to productivity, insight, and a healthy workflow. Time tracking is equally crucial to everybody in an organization, or society, in general. Whether you are a CEO, a manager, or a team member, keeping track of your time is paramount.

But when it comes to business, many questions come to the surface, like:

  • What is time-tracking?
  • What are the main benefits of time tracking?
  • What are some time-tracking best practices?

In this guide, we try to answer them all.

What is time-tracking?

Let us start with the very basics.

Time tracking is the measurement and documentation of the hours worked on any project or task. The measurement result is essential to make sure employees receive proper compensation. 

Time entries are crucial for both the payroll and managers to scale how much time it takes to complete a specific task. The most time-consuming tasks are not necessarily those that require the most effort to finish or bring the most value. Often, quite the contrary.

Time tracking is a multifaceted diamond. You can be its loyal supporter thanks to all its benefits, but at the same time, you can be skeptical of it due to its misuse.

Time tracking and its success is a matter of perspective and company culture. If employers use it as a tool of control, then it hampers employee creativity and motivation. When properly used, time tracking fosters productivity and engagement, and it boosts profitability. 

These two use cases above are the most common reasons why businesses implement time tracking software, often referred to as timesheets. 

What are the main benefits of time tracking?

The insights the employers get from time tracking can be an eye-opener. How much time do you spend browsing the web, looking through your inbox, or trying to find that one document in a pile of folders? These may seem minor daily activities, but accumulated, they are some of the most time-consuming non-billable activities in your workweek. Harvard Business Review’s survey on filling timesheets shows that the U.S. economy wastes a wholesome $7.4 billion/ day in productivity simply because of workers who have not recorded their hours. 

On a professional level, there is a plethora of time tracking benefits both for companies and employees:

Tracking time boosts productivity

If you want to boost your productivity exponentially, tracking time gives insight into optimal work patterns throughout the day, particularly to assist employees in work-from-home environments. Optimal work patterns include the influence of your circadian rhythm on mental efficiency. Some people are highly productive in the morning, while others work better in the evenings. When do you engage best in deep work? Time tracking can give you an objective answer, allowing you to optimize your productivity, giving you a significant confidence boost.

Tracking time gives transparency into the work process

Making time registrations a staple in your routine automatically makes your business more transparent. It allows you to stay on top of the working process, offering insights into the completed jobs and their duration. Additionally, you understand which activities are constantly put on the back burner and start prioritizing work better.

Time tracking tools provide the bigger picture for employees. They can look back at their workloads and optimize productivity while keeping tabs on what everyone else has been doing.

Tracking time increases the employee accountability

Accountability comes as second nature when you acknowledge all your hard work. Time registration makes employees more responsible for their work, knowing they must report hours spent on tasks. Everyone realizes that the clock is ticking and tries to be as productive as possible.

If you strive to minimize the non-billable work, it is time to consider what and how to change for the better, making your workflow more efficient and effective. You become aware of your contribution and role.

Tracking time augments the profitability

Another benefit is that time tracking increases profitability. Time tracking is an excellent proof of work. Not only does it identify top performers (and even reward them), it also spots possible project inconsistencies, miscommunication, and poor time/ budget estimates. So, time tracking can also be a metric to assess your company turnover rate.

Time tracking facilitate workload distribution

Time is a key measure of critical resources. It shows whether employees feel overworked, a department needs more resources and gives you insights into who brings the most value to the team. Managers see which employees are under or overbooked. They can adjust their workload to get everybody to the same level by redistributing or sharing responsibility and workload.

Moreover, it allows you to manage and work on multiple projects simultaneously. By keeping track of time consistently, you can tell how many hours you can or should put in for a specific task or project.

Time tracking reduces multitasking

When you track time on a set task, you do not want to switch between tasks as often since it is a hassle to keep adjusting your timesheet entries. Whenever your mind wanders, you can glance at the timer and remind yourself of the task at hand. So, in a sense, time tracking also improves employee work-life balance. It reduces the chance of burnout. It reminds you to take a break, to rest, not to overwork yourself. Make sure you take a short break every hour or so. Time tracking gives you the cue to call it a day when working remotely.

What are the best practices of time-tracking?

Most employers know why they need to track time, but do you know how to make the most out of it? Do you know how to get your employees to follow your policies?

If time tracking feels more like a necessary evil than a business asset, read on and let our top 20 time-tracking best practices guide your first steps through time tracking:

Time-Tracking Best Practices

  1. Start with a free demo and a pilot program
  2. Have clear policies on what should/should not be tracked
  3. Make sure everyone understands why you track time
  4. Keep the trust alive
  5. Set time tracking goals for the team
  6. Train your employees
  7. Train your managers to ensure consistency
  8. Tie tasks to projects or clients
  9. Encourage the avoidance of multitasking
  10. Use your time data
  11. Have everyone on the same tracking schedule
  12. Record time daily (do not wait for Friday afternoon!)
  13. Assign someone to check timesheets daily
  14. Lock previous month timesheets
  15. Keep the categories simple
  16. Make time tracking data transparent
  17. Be clear about hourly vs. salaried time tracking
  18. Automate the process as much as possible
  19. Don’t track every little thing
  20. Lead by example

Let's check each one of them:

#1. Start with a free demo and a pilot program

The classic saying “you should try it before you buy it” makes sense with a new employee time tracking policy. What is the management motivation? What will it do for your culture? Do you have a clear idea of the policies you want around it and why? Have you communicated all the above to your managers and team members? Booking a demo and trying a pilot to make sure it fits it is the best practice for time tracking, and it also allows the perk of being able to correct any bugs before a full rollout (= fewer headaches for you in the future).

#2. Have clear policies on what should/should not be tracked

Ensure everyone is clear on what tasks and time should be and not be tracked. For example, together with HR, you should plan and add a policy to incentivize people to start their time AFTER the coffee/bathroom morning break. The result: no more wasted 10 minutes of payroll/ company time for employees every day (that means lots of money saved in a year).

#3. Make sure everyone understands why you track time

As it is so much more than just for payroll!

It is human nature to feel that time tracking is a management way of “watching you.” Often though - it is not! Management wants analytical HR insights for a better, faster, and smarter decision-making process based on real-time people data. It is a way of handling your remote workforce since you are not in an office together. Whatever your company reason/s are, convey them to your team and remember the following best practice - keep the trust alive!

#4. Keep the trust alive

Trusting employees can be challenging, especially if you have been burned before by someone forging time. Solid policies and following at least these best practices will keep your trust in your employees alive. For those who follow the rules, trust is crucial to their happiness. After all, people leave managers, not companies. Make sure you trust them in their time tracking, and they will reciprocate.

#5. Set time tracking goals for the team

Think of incentives that get your team or teams into the spirit in a fun way. Promote and reward regularly the proper use of your time tracking system.

Hint: involve key employees and managers to figure out what would get people going, instead of just assuming you as the owner, CEO, or “big boss” know!

#6. Train your employees

When you tell your team something, tell them three more times to be sure they hear you. Time tracking is no different. Train employees to the point that they can do it in their sleep. Ensure they understand the system and train them in various scenarios (i.e., demonstration, videos, guides, and practice fake timesheets).

#7. Train your managers to ensure consistency

Same as the above best practice on training employees, you will want to make sure your managers are all on the same page. If an employee asks two different managers the same question and gets two answers, expect to have issues on your hands. Having the management team accountable and on the same page will go a long way to avoid problems.

#8. Tie tasks to projects or clients

Figure out what should be “internal” or “company” time, and make projects to track this time as well; then link as much as possible to projects or clients to get the most accurate billing. 

#9. Encourage the avoidance of multitasking

Have you ever sent an email to the wrong person? Embarrassing mistakes like this don’t happen when you are entirely focused. One thing at a time produces the best and most consistent results and leads to the most accurate billing from time tracking to your clients.

#10. Use your time data

Not sure if you need to hire or downsize? Use your time data to give you the answer. Need a client referral story on timing and budget? Your statistics can outline exactly how much time each task took. If you track effectively, your time data tells you almost anything you want to know about where your employees spend their time. Data makes it easy to spot and correct inefficiencies, notice who adds the most value and inform strategic decisions about the future.  

#11. Have everyone on the same tracking schedule

If you want a happy workplace environment, you know the chore lists must be shared and equal. Set a schedule that makes business sense: if a team tracks time daily, make sure all teams do it too. If timesheets are locked for one group at 5 pm Friday,  they should be for all groups (unless there is a business case on why).

#12. Record time daily (do not wait for Friday afternoon!)

You might think: if the employees have to fill their timesheet less frequently, it will not be such a burden. But it is the reverse.

Do you remember what you had for lunch three days ago? I don’t. The same goes for work. It is frustrating to enter a significant amount of time at once, for an extended period, and after a long lag. Employees will have to remember what they worked on way back on Monday, waste time remembering, going through their notes and calendar, end up forgetting most of the stuff, and entering ambiguous data. A best practice is to keep it simple and classic: clock in when you settle into your desk for the day (remember Best Practice #2. Have clear policies on what should/should not be tracked) and clock out your time tracking before you leave for the day. Do it every day.

#13. Assign someone to check timesheets daily

When you first introduce time tracking, people will regularly forget to fill their timesheets, or they will wait too long and get frustrated. So, put someone in charge of checking timesheets and reminding people to fill them before they leave work. 

A work hours tracker will not only track the time worked in hours and minutes per workday, but you also gain access to rich time reports. The time clock application provides the weekly hours worked and helps with the payroll calculations.

#14. Lock previous month timesheets

Everyone should change their time entries without requiring approvals for every little change (a typo, attach a missing tag).

But, there is a point when you don't want things to change anymore. To avoid confusion or uncontrolled editing of time, locking timesheets at the end of a week or month is the best practice to get the most credible data. Once timesheets are locked, you can safely send the client or payroll the report. More importantly, people will know that there is a cut-off period and that they should get their timesheets in order.

#15. Keep the categories simple

Time tracking isn’t resume building - no need for emphasizing. The fewer details you need to fill, the greater the chance timesheets in your timesheet app will be accurate. But how much detail do you need? It depends on how granular you need the reports to be. Save your team time and confusion by keeping things as straightforward as possible. Try categories like “Editing,” “Meetings,” and “Employee Training.” Keep it clear and consistent across projects, and make sure you keep the lines of communication open if a project is missing something; empower employees to ask if they feel another category is needed.

#16. Make time tracking data transparent

You can limit who can see time tracking entries to admins or everyone. For some data, it's ok to limit only to admins (in the case of private projects).

But, you should strive to make the process transparent. Others can see who worked on what, see that people regularly fill their timesheets, and be motivated to do the same (i.e., follow the crowd). You can enable the Employee Self-service, where each employee will have access to data about time at any time.

#17. Be clear about hourly vs. salaried time tracking

Managers can establish trust by keeping things as consistent as possible for their teams and should have a firm line on how, who, and what positions track time and why. Come up with a policy for hourly and salaried employees and the time tracking expectations around them.

#18. Automate the process as much as possible

Automation is increasingly insinuating itself in our lives, from monitoring the quality of our sleep with our phones to updating the optimal temperatures by air conditioners. We expect mundane and repetitive tasks that distract us from what matters to be as automated and hands-free as possible. The same goes for employee time tracking. Consider how much more time your team could have available for priority items and eliminate as much as you can in their way. You can do so by having pre-programmed timesheets or allowing them to duplicate time logged if their days tend to be very similar.

#19. Don’t track every little thing

Tracking time is an overhead task that no one enjoys. The more details and precision you require, the greater the chance you'll get incomplete and inaccurate data (especially if you didn’t spend enough time on Best Practice #3. Make sure everyone understands why you track time).

A general rule of thumb: if it takes more than 15 minutes, it deserves its time entry. For example: if you are taking a bathroom break, don't track it - just add it to the project time. If you are taking a lunch break though, either you don't track it or tag it as a break.

#20. Lead by example

Time tracking should be from the top down. Employees will want to see their managers and leaders obliging by the same best practices and policies. It also can help with our Best Practice #6. Train your employees  - if your leaders and manager are tracking time too, that will make them better trainers!

In case if you want a summary if this list to share it with a colleague, here is a picture of it.

Wrapping up

Successful leaders go to great lengths to prove there is no workaround time tracking if they aspire to increase productivity personally and professionally. Team members can use time tracking to work towards their personal and shared goals - spending time where the most value occurs. Managers use time tracking insights to get an accurate overview of the team peak performance, overall well-being and productivity, and even task distribution.

As an executive, use insights and data from time tracking to steer your organization in the right direction put the strategy into action, and ensure that every individual manager, and team member, understands and pulls the organization, not apart, but towards the same mission, with the same vision in mind. That is the recipe for a successful organization.

Friendly advice – waste no more time. Start tracking your time today. All the time tracking data is a testament to hard work, consistency, and (pro)active behavior. And there’s always room for improvement. So, pick a time tracking solution of your choice, and hit the start button.