Time out – Time in. This gives you the total hours worked for each day in a week. Add any overtime, if applicable. Multiply that number by the hourly rate. And voilà! You’ve calculated the employee’s earnings for the week.
When it comes to filling out a timesheet, the process is relatively straightforward. But, ensuring accuracy is paramount. This is a challenge that is only compounded when dealing with multiple employees and their respective timesheets.
Here are some alarming facts associated with timesheets and associated factors:
- Businesses in the U.S. lose billions of dollars every year from employees committing time theft.
- Employees spend an estimated two to three hours on social media daily while at work, which is mostly unaccounted for.
- Almost fifty percent of employees plan on quitting their job after two payroll issues, which is a common problem when dealing with timesheet inaccuracies.
As an HR is responsible for managing your employees’ payroll, it is important to ensure that timesheets are completed correctly and filed promptly. Here are a few points to keep in mind when it comes to timesheets.
The Appropriate Way To Fill Timesheets
While filling out timesheets, certain rules must be followed. Here’s a look at the steps involved in filling out a timesheet appropriately.
Fill in the Required Employee Information
This typically includes their name, position, department, and other personal details such as Social Security Number or Employee ID. Entering these details helps avoid confusion when multiple employees have the same first name, same last name, or both.
Add Project Details
Against the employee’s details, enter details of the project. Businesses often use the timesheet to group tasks for various projects. This helps them view the tasks employees are working on. Businesses can then provide clients with proof of billable hours.
For freelancers and contractors, calculate billable hours for each task. In such cases, data on completed tasks for individual projects are also entered into the timesheets.
State the Duration of Work Accurately
This should include both the starting and ending dates and the total hours worked for each day in a week. Suppose you are filling out a timesheet from the 15th of April to the 21st of April. Include all days of the week and make sure you check for any holidays or leaves taken.
Record the Start Time and End Time
For each day, accurately record the time at which an employee started their shift as well as the time at which they ended work. This shows the total hours worked each day and each week. If an employee arrived late, left early, or took a break during their shift, include those as well.
For instance, an employee starts work at 10:00 a.m., leaves for lunch at 12:00 p.m., returns to work at 2:00 p.m., and leaves at 6:00 p.m. Based on this, their total hours worked would be 6 hours.
Add Overtime, if Applicable
Overtime pay is often a requirement for certain types of jobs. Make sure to include any overtime hours worked. Multiply the number of hours by their hourly rate to calculate what they should be paid for that week as overtime pay.
Add Notes or Comments
Timesheets have a provision for entering notes. Use this to record details such as reasons for overtime, delayed task completion, absence, etc. This helps when you are calculating the pay accurately and avoids discrepancies.
Once all the required details have been filled in, double-check the timesheet for accuracy and submit it to the payroll team or manager/supervisor for processing. The manager cross-checks the details and approves the timesheet.
Why Should Businesses Use a Timesheet?
Almost all businesses have time-sensitive tasks. Particularly, in service organisations, deadlines are non-negotiable. This necessitates the accurate tracking of time and resources, rendering timesheets invaluable.
Here are some of the key benefits a business can reap from using timesheets.
Reduces Time And Resource Wastage
Timesheets help employers understand when time and resources are being over-/under-utilised. This awareness lets them identify areas of inefficiency, enabling them to optimise their processes and redirect their focus towards more productive activities. For instance, if an employer notices that employees are spending too much time on a particular task, they can either assign dedicated resources to the job or delegate it to a more experienced employee.
Helps Manage Labour Costs
If you are aware of the number of hours your employees are working and the rate they are being paid, you can budget your labour costs in advance. This helps make informed decisions on how much a business can spend and where.
Helps Maintain Records For Auditing
Every business needs to maintain records for auditing. Timesheets act as an excellent data source in a financial audit. They help track employee hours and compare them with their wages. This is especially useful when filing taxes, as timesheets provide clear evidence of how much money was earned and spent in a year.
Provides Insights Into Productivity
A business can gauge the productivity of its employees by looking at their timesheets. This helps identify how much time is being spent on specific tasks and allows them to optimise their processes whereever necessary.
Timesheet software helps automate the entire process, from tracking time to generating invoices. This makes billing easier and helps businesses avoid the manual calculation of billing hours.
Timesheets help employers accurately calculate the hours an employee has worked. This helps avoid overpayment, thereby saving money. It also helps ensure that employees are fairly compensated for their work.
What Are The Applications of Timesheets?
While most people think that timesheets are only used by businesses to track employee hours, they can be applied in many other ways. Here are some of the most common applications of timesheets:
Tracking Employee Hours
The most popular application of timesheets is to track hours worked by employees. This helps employers manage labour costs and provide a record of overtime hours worked.
Monitoring Project Progress
Timesheets can be used to track the progress of a project and identify bottlenecks or areas of inefficiency. By doing this, businesses can identify tasks that are taking too long to complete and streamline their processes.
Checking Equipment Usage
Timesheets can also be used to track the usage of equipment such as vehicles or machinery. This allows businesses to monitor how often their equipment is used and ensure that it is always in good condition.
By using timesheets, the payroll department can track employee hours and process payments promptly without relying on estimations. Moreover, timesheets can be used to monitor compliance with labour laws, verify employee hours, and ensure the timely payment of wages.
Moreover, timesheet software solutions are less prone to errors as they automatically calculate employee hours and deductions instead of relying on manual processes.
Types of Timesheets
Several types of timesheets can be used to track employee hours. Here are some of the most common ones:
Cloud-based timesheets are web-based applications that allow employers to track employee hours remotely. This type of timesheet is convenient and cost-effective and is often used by businesses with a distributed workforce.
Cloud-based timesheets provide businesses the freedom to access employee records from anywhere at any time. The biggest advantage of this type of timesheet is that it eliminates the need for manual data entry.
In-house HRMS timesheets are software applications that are installed on a company’s internal server. This type of timesheet allows businesses to keep all their employee records in a single, secure location and ensures that data is never lost or misplaced.
The biggest advantage of using an in-house HRMS timesheet is that it allows businesses to integrate all the HR and timesheet functions through its centralized interface.
However, the biggest disadvantage of in-house HRMS timesheets is that they require upfront investment and regular maintenance.
Spreadsheet-based timesheets are typically maintained in spreadsheets (Excel or Google Sheets). They are less popular than cloud-based timesheets as they require manual data entry and can become outdated quickly.
This is an ideal solution for businesses that don’t need sophisticated tracking features and want to save on costs. This method has several drawbacks though, such as difficulty in sharing files across teams and limited access to real-time data. Thus, it may not be the best option for businesses with a global workforce.
Biometric-based timesheets are gaining popularity among businesses as they allow employers to track employee hours without manual data entry. This type of timesheet uses fingerprint or facial recognition to identify employees and track their working hours.
This ensures that employee data is stored securely, as only biometric information is stored on the system.
Paper timesheets are physical documents that must be filled in manually. They offer limited features and require manual data entry, making them a less popular choice among businesses. They have almost become obsolete due to the introduction of timesheet software solutions.
Must-Have Features of a Timesheet Software Software
Regardless of the type of timesheet you choose, certain must-have features should be present in a timesheet software that are listed below:
Compatibility with Other HR Systems
The software should be able to integrate with other HR systems, such as payroll and leave management systems. This will ensure that data are accurately transferred and updated.
The software should be able to provide real-time insights into employee hours and work patterns. This will help businesses make informed decisions and improve their productivity.
The software should have a user-friendly interface that makes it easy to use and navigate. This will ensure that employees can clock in and out without any difficulty.
The software should have advanced security features to ensure that employee data is secure. This will help businesses protect their data from hackers.
Many companies still rely on manual timesheets and paper documents to track employee hours. However, with the introduction of timesheet software solutions, businesses can now easily and accurately track employee hours. These solutions provide businesses with enhanced features, real-time data, and improved security. Therefore, companies must consider investing in a timesheet software solution to get the most out of their workforce management system.
Keka HR offers a complete timesheet software solution that includes all of the above must-have features. Keka also offers additional features that can help businesses improve their workforce management. With Keka, businesses can easily keep track of employee hours and make data-driven decisions to maximise their productivity. Try Keka today to get the most out of your workforce management system.