Tracking the time employees spend on a certain task or project is important for many reasons. An obvious one is that it helps project managers create more accurate project deadline estimates.
And while project managers might be able to track time by manually logging hours on Excel sheets, a better way to do this is to use software specifically designed for time tracking.
Time tracking solutions help project managers dodge error-prone, manual methods of tracking time. Additionally, they can analyze generated reports to understand factors that influence employee performance.
That said, there are many time tracking solutions available on the market that differ in functionality, pricing, and deployment. Businesses should carefully evaluate all these factors to ensure that they don't invest in the wrong software.
In this buyer's guide, we'll look at factors that can help businesses in selecting the right time tracking tool.
Here's what we'll cover:
What Is Time Tracking Software?
Common Features of Time Tracking Software
What Type of Buyer Are You?
What is time tracking software?
Time tracking software is a tool used for tracking the time employees spend on specific tasks during a project. The reports derived from time tracking solutions help project managers plan accurate project schedules.
Time tracking tools are a part of the larger software categories of project management solutions and professional service automation software. However, they are also available as stand-alone tools with specific functionalities required for tracking the time employees spend working on projects. These functionalities are discussed in greater detail in the section below.
Time tracking in Toggl
Common features of time tracking software
Time tracking solutions come with a range of functionalities that help businesses not only track employees' performance but also create billable hours reports to be sent to clients.
Below we look more closely at some of these functionalities:
Record the time employees spend on tasks with details such as the type of task and total hours/days spent—categorized by client, project, or other parameters.
View employee time records as a list (traditional timesheet) or on calendars (graphical timesheet). Create workflows allowing employees to send time sheets to managers and other stakeholders for approval.
Reporting and analytics
Generate reports showing time spent on tasks and revenue earned by projects Filter these reports by employee, project type, client, team, or timeline.
Generate invoices based on billable hours to charge clients for services. Automatically calculate amounts based on hours, using multiple billing rates, any discounts, taxes, and other information in the invoice.
While these are the common functionalities of time tracking solutions, businesses should remember that every solution differs in the depth and breadth of functionality.
For instance, some solutions offer mobile time tracking, which would be a useful feature for businesses that need to track the time of their field staff.
What type of buyer are you?
Listed below are the two time tracking software buyer groups, categorized according to their business size. Understanding their key concerns will help you identify and purchase the right time tracking software.
- Small and midsize businesses (up to 1000 employees): A tool's price plays a major role in these buyers' purchasing decisions, as they typically have a smaller software budget than large organizations. As a result, small and midsize business buyers need a solution that comes with low upfront costs and/or an affordable monthly subscription fee.
- Large businesses (more that 1000 employees): These buyers look for a time tracking tool that comes with a broad-range of functionalities, including automatic time capture, multiple billing rates, and overtime calculation. The tool should also be able to integrate with their existing solutions. For example, integration with accounting tools can provide seamless exporting of bills and invoices to keep financial data consolidated in a single solution.
To correctly identify the time tracking tool that suits your business requirements, you should analyze more than just the features and consider additional factors such as deployment options and advanced functionalities.
Here are key considerations every business should keep in mind when purchasing time tracking tools:
- Deployment options: Time tracking solutions come with two types of deployment options: on-premise or cloud-based. The latter option could be particularly favorable for small businesses, as its monthly/annual subscription models mean low or no upfront fees. An additional benefit is that small businesses don't have to worry about data backup and product updates, as the vendor takes care of those. However, for businesses that want absolute control over their data and have an IT team to take care of software upkeep and feature customization, an on-premise tool could be the better option.
- Stand-alone vs. full-suite solutions: Stand-alone time tracking tools are an affordable option for small businesses that want a solution singularly for tracking time spent on tasks and projects. However, time tracking solutions are often offered as a software module within project management and professional services automation (PSA) solutions. The need for such a full-suite solution arises when businesses want a tool that does more than track time and helps with scheduling tasks, tracking expenses, planning project resources, etc.
- Time tracking versus time and attendance tracking tools: A key thing to remember about time tracking tools is that they are not the same as time and attendance tracking solutions, which are used by HR departments to manage employee leave and track their working hours. These solutions come with functionalities that go beyond the scope of basic time tracking solutions, such as vacation/leave management, employee database, and employee scheduling.
- Advanced functionalities: In the last decade, time tracking tools have evolved to incorporate newer digital technologies. For instance, some tools allow you to track the time an employee spends in a particular location by tracking GPS data. This can be a useful feature if you have a field staff, such as on-site technicians and sales agents. Similarly, certain tools allow you to view and automatically track the time employees spend on different activities while working on a project, such as the different websites they visit and applications they use. This may be a required feature if you're managing a team of freelancers.
Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.