Why Poor Timekeeping Might Ruin Your Business

Poor Timekeeping

By Brea Phillips 

Poor timekeeping is a costly habit. 

Having worked in the time tracking industry for over 5 years as a Customer Success Manager, I’ve spoken with hundreds of clients who have all had varying levels of success in implementing time tracking within their organization. While timekeeping may initially seem like a mundane task, each of these organizations soon realize how important proper timekeeping is for the health of their business.

Imagine the following scenario: 

After shopping around for the right solution, you implement a time tracking system and convince your begrudging staff to begin logging their hours. At first, your employees fill out their timesheets daily, meticulously documenting their efforts in real time. You see that they’re logging entries multiple times a day, right after each chunk of work has been completed. And with weekly timesheet submissions, you’re sure that the data you’re receiving is always up-to-date. Everything seems to be going swimmingly. 

But then your team gets busy; some new project inevitably begins to overwhelm them. You slowly start to notice that their timesheet entries are becoming fewer and far between. You let it slide, however. After all, you understand that your team is working hard, and they’ve already shown that they typically fill out their timesheets promptly in the past. So you decide that you don’t need to reprimand them, instead accepting their tardy timesheets. Big mistake.

This behavior goes on for a few weeks. Eventually – you notice that your entire team is filling out their timesheets the day before they’re due. Your staff is now logging a week’s worth of work all at once. 

Now, I am going to ask you honestly: what were you doing at 9:38am last Tuesday morning? Unless you have a calendar event that you can refer to, chances are that you won’t remember; the vast majority of people can’t. 

When healthy timesheet habits aren’t enforced in your organization, the data that you receive is going to be as faulty as the human memory. And the cost of this faulty data adds up quickly. 

The Financial Cost of Incorrect Timesheets

Many organizations round their billing to the nearest quarter of an hour; so every 15 minutes spent on a task gets billed to their clients. And, in many cases, professional services firms will round up to the quarter hour as well, meaning that 10 minutes of work gets billed as 15 minutes. While it may not seem fair to the client, the cost of context switching easily justifies the expense. 

As it turns out, many employees never record the small increments of time that they spend on clients. Tasks such as answering emails, responding to inquiries, or preparing for meetings often go untracked. A recent study cites that “40% of workers report never tracking time spent reading and answering emails.” Apart from the time lost in context switching, this untracked time can lead to huge revenue losses. 

Let’s take a look at some math to see how quickly these poor timesheet habits can lead to disaster:

Imagine that you have 10 employees who each bill out at $250.00 USD an hour. Joe Bob Jones forgets to log billable client correspondences for 2 clients every day, losing a total of 30 minutes of billable time.

  • $250.00 x 0.5hrs = $125.00 USD (daily lost revenue from Joe Bob Jones) 
  • $125.00 x 5 days= $625.00 (weekly lost revenue from Joe Bob Jones) 
  • $125.00 x 21 days=  $2,625.00 (monthly lost revenue average based off of 21 work days in a month) 
  • $2,625.00 x 10 – $26,250.00 (total company wide lost revenue per month with 10 employees)

As you can see, your company would be losing a total of $26,250 every single month. Extrapolated out for an entire year, that is an annual loss of revenue totaling $315,000 USD

A Downward Spiral of Inefficiency

When poor timekeeping habits arise, lost revenue isn’t your business’ only forfeiture; your team’s efficiency will also decrease. 

Employees who don’t complete their timesheets consistently struggle to remember what tasks they performed. This causes them to spend an inordinate amount of time filling in timesheets at the end of a cut off period. 

Often, this delayed time entry leads to late timesheet submission, causing managers to have to chase down laggards and remind them to submit. 

And, if employees aren’t consistently paying attention to their timesheets, they’ll likely miss timesheet rejections from their managers or the accounting department as well. Now the accounting department is hounding managers, managers are hounding employees, and the client’s invoice is sent late. 

As you can see, when timesheets aren’t filled out promptly, a cascade of costly time-wasting activities ensue.  

How to Make Sure Your Team Tracks Time Regularly

If the scenarios above sent shivers down your spine, don’t worry – there are steps you can take to prevent such situations from ever occurring. With the right time tracking software, you can enact safeguards that allow managers to quickly identify and correct poor timesheet habits before they become a problem.

  • Set Up a Time Entry Completion Dashboard: Being able to view your team’s timesheet completion at a glance allows you to coach more effectively. By requiring a minimum number of hours to be entered each day, you’ll see who is meeting their deadlines and who is logging last minute. And, when you notice incomplete timesheets, you can notify employees of their tardiness directly from your software interface. 
  • Send Automatic Email Notifications: No one wants to be known as the “Timesheet Enforcer” within their organization. Not only is it a time consuming activity, but it can also foster resentment. So rather than constantly reminding employees to complete their timesheets, you can have your software do it for you. Your timesheet software should have the ability to send automatic email notifications reminding employees to log their hours. You can program these emails to be sent a day or two before timesheets are due, improving the odds that employees submit them on time. Additionally, you can set up reminder emails for managers to approve timesheets. This way, your finance team will receive the data they need on time, every time. 
  • Make Time Entry Easy: One of the best ways to ensure that timesheets are filled out regularly is to make time tracking easy. By choosing an app with multiple time entry options – such as a mobile time tracking app, Slack integration, or online interface – you’ll remove any excuse for tardiness. To make things even easier, some time tracking softwares will allow you to copy over time entries from a previous day or week. For employees who work on the same projects often, this can be a huge time saver.

When it comes to enforcing healthy time entry habits within your organization, you’ll want to rely on technology and automation to help out.

Correct Bad Habits Before It’s Too Late

Like any bad habit, the more deeply entrenched poor timekeeping becomes within your organization, the harder it’s going to be to uproot. That’s why it’s best to build a culture of time tracking from the beginning, nipping any problems in the bud before they arise.  Even once that culture has been established, it takes effort and oversight to ensure it continues. 

Ultimately, poor time keeping has the potential to ruin your business as you lose both time and money. But, on the flip side, proper timekeeping will help you collect hard earned revenue, streamline workflows, keep managers up-to-date on project statuses, speed up the invoicing process, and accelerate the monthly closing of books.


About the Author

Brea Phillips is a Customer Success Manager at ClickTime — a cloud-based time tracking software with over 20 years of experience servicing myriad industries. In her work, Brea helps organizations use technology to accurately quantify their team’s efforts. When she isn’t helping improve business efficiency, Brea enjoys spending time with her husband and child, on the Sacramento River Delta; volunteering for her local community, and of course her 3 dogs.

About admin

I write about technology, marketing and digital tips. In the past I've worked with Digital Tech, Tirupati Trip. You can reach me at softvisiondevelopmentofc@gmail.com

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