Anyone running a business knows that time is one of your most valuable resources. Business owners need to track time usage the same way they follow cash flow. That’s where timesheets come into play.
In particular, businesses with hourly employees need timesheets to determine wages for each pay period and process payroll. However, timesheets are also helpful for calculating overtime pay of salaried employees (those with regular hours), forecasting project timelines, and increasing business efficiency.
Keep reading to learn:
- The business applications of timesheets
- How to use paper timesheets to log employee hours
- Alternatives to paper time cards
Why You Need Timesheets
An employee timesheet records how much time each employee spends at work. Timesheets can be tracked on paper or digitally using a spreadsheet or tracking app.
Whenever an employee begins working, a new time entry (or record) is created. Timesheet records can include details such as the task, project, or client that the employee spent time working on.
Keeping accurate records is an essential function for any business, and tracking time is no exception.
Here are a few ways businesses use timesheets:
- Payroll processing. Business owners review timesheets at the end of each pay period to calculate wages for each employee.
- Project tracking. Project managers use timesheets to track projects’ progress and ensure they stay on schedule and under budget.
- Management accounting. Management accountants analyze timesheet entries to figure out which tasks require the most resources or delay work.
- Accurate billing. Businesses that bill based on time use timesheets to bill each client accurately based on the work done.
- Logging hours. Employees record their work hours, overtime hours, lunch breaks, and other breaks using timesheets.
Businesses that employ hourly workers rely on timesheets for billing, payroll, and budgeting. You can also use timesheets to calculate overtime pay for salaried employees if it applies.
The Fair Labor Standards Act (FLSA) requires small businesses to keep employee records (including hours worked) for all non-exempt employees.
When it comes to running a successful business, timesheets are a must.
Paper Timesheets Template
When creating your paper timesheets, you need to include columns for the following:
- Employee name
- Date/day of the week
- Start time
- End time
- Number of hours worked
Alternatively, you can use free printable templates for your employees. Here are free timesheet templates you can use to track your employees' time. Just click "Copy" to get your own template to edit!
Click here: Weekly Timesheet Template
Click here: Biweekly Timesheet Template
Click here: Semi-Monthly Timesheet Template
To calculate payroll, multiply each employee’s hourly rate by the number of billable hours worked during the pay period.
Benefits of Using Printable Time Cards
Many businesses still rely on paper timesheets. Printable time sheets are accessible for all employees to understand and use.
Using paper timesheets lets your employees feel like they have agency over their time tracking instead of being monitored by a supervisor or timesheet software.
Costs of Using Printable Time Cards
If your business is still using paper timesheets, it may feel comfortable to do things the way you always have. However, printable time cards usually end up costing much more than the paper you use to print them.
The two highest costs of using paper timesheets are time and accuracy. Time is as valuable to your business as money. That’s why tracking time is essential. However, your time tracking activities shouldn’t take up the majority of work time. Compared to digital alternatives, paper timesheets consume massive amounts of time.
If you use paper timesheets, you need to take time to distribute and collect them. After that, someone is responsible for submitting them to the project manager and finance department. Finally, another individual has to manually calculate payroll or enter data into a spreadsheet or payroll software.
Even if you optimize your distribution and collection process, paper timesheets also leave more room for human error. Team members may report inaccurate hours, accidentally or on purpose. Likewise, the team responsible for data entry and payroll can easily mistake one handwritten number for another.
Although paper timesheets are better than none, we recommend looking for a time tracking system that saves time and improves accuracy.
Alternatives to Paper Timesheets
Recording time entries digitally offers several benefits. In addition to saving time and reducing clerical errors, digital time records give leadership more insight into efficiency and productivity.
In other words, if you want the ability to analyze your business’s time usage, it’s best to have digital records.
If you’re using paper timesheets and then transferring the data to a spreadsheet, why not capture the data in a spreadsheet?
Microsoft Excel and Google Sheets are two examples of spreadsheet tools you can use to record time entries and run payroll. You can turn your paper timecard template into a spreadsheet or look for Google Docs or Microsoft Excel timesheet templates online. Instead of using printable time cards to clock in every day, your employees can record work hours directly in a spreadsheet.
You can create one master spreadsheet or give each employee their own sheet and merge the data on a biweekly or monthly basis, depending on your payroll. If you use Microsoft, you can find simple Excel templates for employees to fill out and submit, and then you can merge them into a master spreadsheet.
Google Sheets, on the other hand, offers online timesheets that make it easy to collaborate. Businesses that use spreadsheets for time cards should make sure to set permissions before inviting employees to edit. Employees shouldn’t be able to edit anyone else’s time records but their own. Furthermore, sheets used for data aggregation and analysis shouldn’t be editable.
Time Tracking Apps
You started a business because you saw a great opportunity, and now you have some employees to help you. But, incorrect time cards can add up to costly penalties every pay period.
Make sure you’re using a time tracking tool to stay in compliance with labor laws. If you want to take it one step further, you can use a payroll app like Hourly, which incorporates time tracking and makes it easier to run payroll, track your labor costs and avoid penalties.
Typical time tracking app features include:
- Online punch cards
- Employee monitoring
- Idle-time tracking
- Payroll automation
- Tax document tracking
- Sick leave and PTO management
Some apps focus on maximizing productivity by analyzing idle time, counting employee keystrokes, and using random screen recording. Alternatively, you can also use CSV data exports to analyze productivity on your own.
While employee monitoring offers several perks from a management perspective, it can take a toll on employee morale if it’s not implemented carefully. As a business owner, it’s always best to stay transparent with your employees.
Now, it might seem like time tracking apps only apply to businesses where employees work on a computer all day, but that’s not the case.
Successful businesses need to have good time-tracking practices. And it’s not just about payroll anymore.
Time tracking ensures accurate billing and lets business owners analyze the efficiency of business operations. With a reasonable time tracking solution, you can increase your productivity and keep your clients happy.
To learn more about solutions that simplify your business, explore Hourly’s time tracking and workers’ comp solutions.