Time Tracking

What Is Time Tracking?

Time tracking refers to how organizations record the working hours of hourly employees and ensure those employees are compensated accurately for their time.

It is a subcategory of time and attendance, which is a broad term that typically encompasses time tracking and other elements like attendance, time off, billable hours, and scheduling.

Time tracking includes four main components:

• Time entry
• Timesheet approval
• Payroll
• Reporting

These are often handled by time tracking software designed specifically for that purpose. However, some organizations still perform time tracking manually, either with the help of spreadsheets or in full.

Time Entry

Time entry is the daily process by which an employer records employees’ starting times, finishing times, and any breaks not included in the employee’s contractual agreement. These times are called timestamps and may be recorded on a physical document called a timecard or via an electronic method like a spreadsheet or time tracking software.

Time entry is often referred to as “clocking in and out” or “punching in and out,” the latter of which refers to “punching” the button on a physical time clock that stamps the time on a paper timecard. Time tracking functions built into a point-of-sale system often use an employee’s first login and end-of-day logout to perform time entry and grant system access.

Timesheet Approval

Timesheet approvals are essential for an organization to ensure accuracy and compliance in compensation. Generally, a manager will review employees’ timesheets for the pay period to verify that they are correct. Then, an HR manager will calculate or will use time tracking software the total hours worked along with any overtime hours.

Payroll and Reporting

One of the primary purposes of time tracking is to provide accurate and approved hours for payroll processing. Time tracking should lead to some form of reporting that HR can rely on for payroll calculations so they can process payroll.

By analyzing time tracking data, organizations can also identify patterns and trends in the following key performance areas:

• Employee productivity
• Project costs
• Resource use

Time tracking reports also have strategic benefits, as they can help an organization perform budget analysis or identify discrepancies in compensation.

For example, are some employees consistently submitting overtime requests? You can use your time tracking data to identify if you have the right personnel or technology to help employees work efficiently within standard work hours.

What Is Time Tracking Software?

Time tracking software is a digital tool that uses a unique identifier to clock an employee in and out. It is also often used to track time on specific projects or tasks. Time tracking software can be used by freelancers, teams, and businesses to improve efficiency, accurately bill clients, and gain insights into time utilization.

Time tracking software will usually include the following features:

• Time entry management: Record and track employee work hours by entering start and end times along with any breaks or intervals.
• Project and task tracking: Allocate employee time to specific projects or tasks, enabling accurate tracking of time spent on different activities.
• Timesheets and reports: Generate timesheets or reports that provide a summary of recorded hours, project progress, and other relevant data.
• Billable hours and invoicing: Generate invoices based on employees’ recorded time, and bill clients accurately.
• Analytics and insights: Get insights into productivity, project profitability, time allocation, and identify areas for improvement.

For example, BambooHR^® Time Tracking is a comprehensive solution that helps you simplify and streamline the process of tracking and managing employee work hours. With its user-friendly interface, employees can easily record their time entries, allocate hours to specific projects or tasks, and request time off. Plus, it easily integrates with payroll systems to ensure seamless and error-free calculation of wages. It’s an efficient way to manage time tracking for both HR and employees.