Automated Timesheet Management Software
The discussion to institute any automated system within an organization should revolve around some return on investment. A change in a system of any kind whether it is automated or not implies some effort, some cost, some expenditure of energy and resources.
These costs could be hard costs such as the purchase of new equipment or new software or soft costs such as a temporary drop in efficiency while a new system is implemented. In order for it to be worthwhile to incur these costs, an organization must enjoy some future benefits from instituting a new system.
When considering the automation of a timesheet management system, an organization should first determine what benefits timesheet management software brings. One of the easiest and most common places to look for these benefits is in existing costs of not having such a system now.
Here are a few indicators that your current system or lack of a system is costing your organization:
- Missing Billings
Your organization does not invoice for all the work accomplished on a project. Hours are somehow skipped over or can’t be audited and thus can’t be billed. Perhaps your current system is not appropriate enough resulting in billable hours that are discovered too late to bill them.
- Missing Hours
Your organization is unable to determine what hours are being worked by each employee. Attendance hours seem to add up to one value but the hours spent on projects or overhead or billed to clients just don’t add up to the same amount as the attendance figures.
- Excessive Overhead
Your business model indicates that you should be spending a certain percentage of your hours on overhead activities versus billable or product project activities. Your current system is unable to determine where overhead hours are being spent. You just know that the percentage of productive hours versus non-productive hours is completely unacceptable.
- No ABC
Activity-Based-Costing has been the norm in the project management world for years. However, it is just taking off as a popular concept in management consulting and accounting circles. ABC allows an organization to drill down to the lowest level of resolution possible to identify unprofitable or unproductive areas of a project or an organization. If your existing time tracking system is designed to track hours only at the project or perhaps client level and is unable to manage charges at the task level, you will be unable to implement ABC.
- The Dreaded 999 Code
Manual timesheet systems are often plagued with abuse of a “miscellaneous” or “999” charge code. Users who find it too difficult to look up a proper project code will often find the miscellaneous code an easy way out. Excessive use of this kind of miscellaneous code indicates that users are not charging hours to the appropriate task and project. This defeats any variance reporting system or putting the timesheet data to any useful purpose.
- Double Entry
The needs of the Payroll department to determine payable hours and the needs of other departments such as Accounts Receivable/Invoicing and Project Management to determine billable or project progress hours are often at odds with each other. This may result in independent timekeeping systems which do not reconcile with each other. Aside from the obvious inefficiency of double entry effort, inconsistent totals of the same information may result in hesitant or even bad business decisions.
- No Variance Reports
If your current system does not allow actual hours to be tracked in the same resolution and with the same coding as they were budgeted, you will be unable to do a budget vs. actual comparison. Budget vs. actual variance reporting is the single most important management tool, particularly in a project environment.
- No Integration with Other Corporate Systems
There are many corporate systems which could take advantage of on-line timesheet information. These include: Payroll, Billing, Accounts Receivable, Accounts Payable, Human Resources and Project Management. If your current system is either not automated or is unable to integrate its data with existing corporate systems, your organization is not as efficient as it could be.
If your organization is experiencing one or more of these conditions, there are potential benefits available from automating your time tracking system. In order to realize some of these benefits you should look for a system that will allow the following:
- Ensure that everyone completes a timesheet when they are supposed to.
One of the most difficult aspects of a time tracking system is making sure that all timesheets are completed and handed in. In a paper-based system, this means using a checklist of some kind to make sure all timesheets were completed.
An automated timesheet management software should have features that let the administrator determine almost instantly if all timesheets have been completed, where, if anywhere, a timesheet has been stalled in the approval process and, if necessary, allow a supervisor to enter the timesheet of missing employee.
- Determine who, if anyone, has not completed a timesheet for the current period
An automated timesheet should allow some kind of missing timesheet report showing timesheets that have not been entered or have been entered but have not been released for approval or have been entered and are stalled in the approval process and where they are stalled.
- Enable timesheets to be entered quickly and easily by the people doing the work.
The timesheet process is generally considered an unwelcome task by employees. Timesheet management software provides a way to reduce the effort in completing this task.
- Rapid timesheet validation both automatic and manual that moves timesheets through the process as fast as possible.
Timesheet validation in a paper-based system is the most time-consuming function of the entire process. It is also the area which is the most vulnerable to allowing invalid data. An automated timesheet system should allow for validation rules to be determined by the Timesheet Administrator. These rules should either provide warnings or errors in timesheets at the entry level where corrections are easiest to implement. Any timesheet system, automated or paper-based, must also allow for manual validation of timesheets. Automated systems should support a timesheet “routing” that determines the path of authorization of a timesheet from the source to the final posting. These functions will allow validation effort to be kept to a minimum and allow timesheet data to be moved through the process as fast as possible.
- Charges to be entered and tracked at the task level not just the project or client level.
A key advantage to be sought from automating time tracking is the ability to move to Activity-Based-Costing. Project Management systems deal in tasks, any timesheet system should be able to do so also. Systems designed for professional use such as for accountants, consultants or lawyers may not have the ability to manage data below the project level.
- Allow reporting across timesheets to show data by project, by code, by date or by department.
In a paper-based system, cross-referencing data of any kind is difficult. In a timesheet system it is almost always required. Requests that sound simple such as, “How many hours were spent last year in Research and Development activities?” become a nightmare of manually re-touching virtually every timesheet on file. An automated software should allow for such Ad-Hoc reports and queries without difficulty. Administrators should be able to select data based on criteria of any field in the system and further, should be able to sort that data based on multiple levels. This will provide a level of reporting to management that is otherwise impractical or even impossible. The effort to produce reports to meet for requirements for billing, for clients or for government, should be drastically reduced.
- Allow for multiple rates to track events such as overtime, time-in-for-time-out, sick leave etc.
Rates are used for many purposes in a timekeeping system. The payroll department will use rates to determine overtime payments or track time-in for time-out (unpaid overtime). The Human Resources Department may wish to determine that no one has taken too much (or too little) vacation or sick leave. The Billing/Accounts Receivable Department may be using special rates for a particular task or for a particular condition on an invoice. The Project Management Department may use extra rates to determine internal project costs per activity. An automated timesheet management software should be able to maintain many rates. Rates should be able to be set globally, by department or even by employee. The system should allow the ability to track internal and external costs simultaneously. This will make possible a system that can serve multiple functions and departments at the same time. Finally, the costs should be insulated from the regular users while being available at any time to management
- Allow users to review historical timesheet records at any time.
Just as with a paper-based system, from time to time there arises a requirement to review a particular timesheet. An automated system should store this information automatically and allow the employee or the administration to review a particular timesheet at any time. This type of system ensures that timesheets are not “mis-filed” or lost. An automated system of this kind also means that this data is available to both the source of the data and management simultaneously.
- Provide pre-prepared integration with project management systems.
An automated system designed to work in a project environment should come pre-prepared to integrate with the project management system you are already using. This will immediately make available charge code lists based on project activities and actual vs. budget variance reports as actual data is moved automatically back to the project management system.
- Provide security to ensure that only the areas of the system that are required are made available to different users.
A timesheet management system is a financial system. Timesheet data must be controlled in a secure fashion. Timesheets must be made unchangeable except by the person who is in control of it at any time. Entries or changes to the timesheet must be auditable to the person who entered them. Security in a timesheet system provides an increased confidence in its data.