Time tracking
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Time Tracking 101: Best Practices for Boosting Profit

Time Tracking 101: Best Practices for Boosting Profit

Time tracking software is a product of the digital era. But the art of time tracking dates way back to 1876, long before workers began their day to the familiar start-up sound of the Windows operating system or the constant pinging of an overflowing inbox.

Back then, American engineer Frederick Winslow Taylor wanted to measure industrial efficiency, so he created a stopwatch to study the length of specific tasks. Later, Henry Ford, founder of General Motors, used time tracking in his car assembly plants. He minimized waste and increased efficiency by monitoring the time needed for each task.

But that's enough of the history lesson. Fast forward to today, and knowledge workers in any industry can use automatic time tracking to gain insights into how they spend their time.

Does it actually work? Let's find out!

What are some common alternatives to time tracking software?

So, why bother using a time tracking tool at all? That’s a fair question, so we’ve listed some alternatives for you to consider below. But, spoiler alert: they’re pretty limited.

1. Traditional paper timesheets

Prefer to take a paper-and-pen approach to productivity? You can print off a timesheet, manually record your daily tasks, and use a wristwatch or clock to help you with accurate timing. If this is your go-to method, know that it’s prone to human error and relies on stellar memory skills—you must remember to record your tasks.

2. Electronic spreadsheets

Using Google Sheets, Microsoft Excel, or similar is a slight upgrade from using paper and a pen. You can save time by creating a time tracking template and storing all your time data in a single location for multiple projects, clients, or teams. There's still a manual element involved, though, as you type in your time entries. Miskey anything and it could throw your time data out of whack.

3. Clocking in and out

If you only need to log attendance hours, you might use a classic clock-in and out system. In times gone by, this involved punching a time card. Nowadays, a swipe card or access control system can record when employees enter and leave the premises.

Depending on your industry, some companies in construction or landscaping businesses might even use geofencing apps that require team members to be within a certain distance of their work location. In either case, this system will track time at work but won't help your team members understand where they're spending their hours.

What are the nuts and bolts of time tracking software?

Time tracking software tracks the amount of time you spend on a specific task. It empowers you with granular detail about your activities, so you can understand where you could be more productive.

Time management tools differ in their approach, but the best have these similarities in common:

Automated time tracking

Your time tracker should automatically run in the background, so you don't have to remember to start the timer. Instead, your tracking is always up-to-date and accurate, and it’s one less tool to worry about.

Easy payments

Integrate your tool with payroll software if you're tracking employee or contractor billable time. And maintain a healthy company culture by tracking overtime to reduce overworking—this ensures all workers receive compensation for any extra hours they log so no one works for free.

Alternatively, track billable hours for a client and link to your preferred invoicing system. You can send an invoice directly from the tool at the push of a button or even make use of a robust Direct Deposit system through which you can get paid swiftly.

Timely tip: Integrate Timely with accounting tools like Freshbooks, Quickbooks, Wave, Expensify, or Xero.

Project management

Connect your time tracker to project management software to understand how many hours you spend on a specific project or task. These real-time insights also enable you to measure project profitability—essentially, is the time spent worth the money you're charging? This can help you refine your quote for future work.

Timely tip: Integrate Timely with project management tools like Asana, monday.com, Airtable, or Basecamp.

Resource planning

Plan your resource capacity more effectively by understanding which project tasks eat into your time. This data gives business owners an insight into how to manage their teams and resources better and avoid burnout. They can redistribute tasks from those with too much on their plate to others with free capacity.

Does time tracking software make you more productive?

If you’re already drowning in tools, you’ll want justification that adding a time tracker is worth it. The crucial question is: does time tracking software actually work? And the answer is a loud and resounding “Yes!”

1. Time tracking increases accountability

Switching a time tracker on in the background can put a rocket up you and motivate you to work faster. There’s a surprising urge to blitz through more emails, crank your way through more words per minute, and stay on track with your work schedule.

That's because the act of being observed, even by a piece of technology, holds us more accountable to ourselves and increases our output. We only need to look at the Hawthorne Effect to understand why. This research is named after a set of socioeconomic experiments on female workers at Western Electric's Hawthorne Plant in Cicero in the 1920s.

Psychologist Elton Mayo adjusted working conditions, including lighting, rest periods, supervision, and hours, to pinpoint trends related to performance. But he concluded that being observed increased the workers' output more than any tweaks to their salary or work environment.

2. Time tracking stops multitasking

Forget what you may have heard: humans are no good at multitasking. One study found that only 2.5% of people can do two or more things simultaneously. Especially if both require your concentration. (Case in point: that’s why motorists aren't allowed to talk on the phone or send text messages while driving.)

Time tracking software promotes this by encouraging you to break activities into individual tasks and then measure the progress without the temptation to 'task-switch.'

3. Time tracking identifies your most productive times

Are you an early bird or a night owl? Or maybe it's not that obvious. Some days you seem to burn through your tasks, whereas, on others, you feel the lag.

Cal Newport, author of "Deep Work," explains that most people are only productive for a maximum of four hours daily, so it’s important to identify when you’re in the zone. In a YouTube Q&A session, he says,

"The four-hour limit comes from research of professional musicians—four hours is a cap on really intense deep work. You see similar numbers for professional chess players. They do very intense training where they're trying to solve position puzzles, and it takes intense concentration. Most people doing knowledge work are not anywhere near that level of intensity—what's actually happening in their brains, they're going up and down, focusing really hard and relieving that pressure for a while then focusing really hard."

Your time reports will deliver valuable insights into the hours of the day when you're most productive. Once you spot these 'golden hours,' you can schedule your most taxing tasks for when you’re well-fed, alert, and most sprightly.

4. Time tracking spots repetitive tasks

If your time reports reveal that you complete similar task sequences daily, you might automate some of these workflows to free up time.

Example: you manually update a Slack channel every time someone completes a task in your project management tool. Or you manually email a meeting link whenever someone confirms their availability.

Your time tracking app will raise awareness of the number of times you repeat these same mundane tasks. This could be the perfect opportunity to save time by automating or delegating some of your processes.

Timely tip: Timely directly integrates with almost 100 popular apps, or you can check out Zapier to build your own integrations.

5. Time tracking software frees up your time

Time tracking solutions genuinely maximize your time, so you can win back hours to spend in other value-adding areas of the business. Take it from Christopher Schwarz of IT consultancy PTS Group, who switched to Timely and saved two hours each week that he would have otherwise spent invoicing customers.

Similarly, Praveen Dalal tells us that 132 employees at analytics consultancy Nabler were previously wasting an hour a week logging their time. Now that they run Timely, this has reduced to 10 minutes—they've also noticed greater reporting accuracy.

Check out our Success Stories to learn even more ways that Timely customers have benefited from using our app.

A couple of time tracking caveats

But before you download your automatic time tracker app and expect immediate results, we should mention some best practices.

1. Time tracking is best combined with time management

You may be disappointed if you expect to switch a tool on and become an automatic productivity guru. Yes, your tool will provide amazing insights and could be what you need to stay focused on your daily tasks—it's a great nudge in the right direction. But you also need some solid time management foundations first.

After all, a time tracking tool might report that you spend 60% of the day aimlessly scrolling your social media feed. But unless you take steps to block your most common distractions, you may still find it hard to blitz through your to-do list.

Time Management Strategies + Time Tracking = A Match Made in Heaven.

So pick your favorite time hacks, monitor your progress, and you'll become much more productive in no time.

2. Time tracking isn’t an excuse to spy on your employees

Think again if you're considering using time tracking as an employee monitoring tool. Harvard Business Review reports a clear link between employer monitoring and employee anxiety, with 49% of workers feeling "often or always" anxious when carrying out their job. This has huge implications at a time when companies should be collectively taking more responsibility for employee mental health.

The same research reveals that "from a productivity perspective, it is not logical to think that just because people are physically at their desk and closely monitored that they will perform well."

The power of time tracking doesn't come from taking creepy screenshots or keystroke logging and reporting this "evidence" back to a boss. Instead, it empowers employees by providing insights that enable them to be more productive within a psychologically safe space. All of which is great for employee morale!

In the case of Timely, we take a strict anti-surveillance stance—all users own their data to delete or download as they see fit. No boss or colleague can see your activity timeline, so it's entirely your call to share how you spend your time to progress team projects and individual assignments.

Automatic time tracking: the takeaway

Need a TL;DR?

  • Yes! Time tracking software definitely works!
  • Automated time tracking software is more efficient than manual-based techniques like timesheets, spreadsheets, or card-punching systems.
  • A quality time tracker tool integrates with accounting and project management software to accomplish more in less time.
  • Turning a time tracking app on can spur you into action, but you'll notice the best results when you pair your tool with solid time management strategies.
  • You'll win back hours of your work week with Timely and have great fun analyzing the results.
  • Employee monitoring is a strict no-no.
Try Timely today!
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