Finance & Accounting Articles

What Is Web-Based Time Tracking for Small Business – Discover Cloud Applications

by Michele Nachum
Published on 1 September 2011's purpose is to help small businesses discover the right business applications for their specific needs. A lot of small businesses do not have large IT departments and as such, require solutions that are easy to implement and manage , safe, and will ultimately deliver ROI for their business.

We are publishing a series of educational articles for entrepreneurs and small businesses to discover how to leverage the latest cloud applications as a way to grow their business. You might have heard the terms Project Management, CRM, Help Desk, Small Business Suites, or Time Tracking - but what do these solutions actually offer? How do they help a small business become more profitable? And frankly, why should anyone care?

This article is about Time Tracking and here we explain why it is important and how it can help increase your employees productivity. We will outline the major components of time tracking software, and offer specifics on what to look for when choosing a time tracking solution.

What is Time Tracking software?

Time tracking software has become the virtual time-punch clock of today's world as it enables you to track real-time data from hourly employees as well as time spent on various projects. Consultants, lawyers, graphic artists, publicists, IT pros and others who bill by the hour also use time tracking software for billing and payroll purposes.

However, time tracking software is more than just the storage of virtual time sheets. In many cases, these solutions will integrate with your financial software for accounting, billing and payroll purposes. Some applications also include and/or integrate with human resources issues such as the ability to track sick days, overtime, holiday pay, leave of absences and more.

Here's how it works

Time tracking software includes a time recording application, much like a stopwatch that allows you to sign in, click on the "start" button and the app will begin to record the minutes and hours worked in real time. When you are finished, you click on the "stop" button and your time is then the time is stored in the system for later use. All of the recorded time is available to you when it comes time for billing and payroll purposes.

If you are not an hourly employee or someone who bills by the hour, you can also use the software to manually record your time and input comments in the time sheet for additional clarification.

Why should you care ?

The adage that time is money has never before been so true. Time tracking software adds credibility to your business and provides an accurate accounting of hours worked, complete with backup reports to share with bosses and clients as needed.

In addition, time tracking software can help you better manage your business by monitoring employee overtime, vacation and sick day accruals, holiday pay and more. If you want colleagues to bill time to certain projects, you can assign job codes to them. This helps in determining how much time someone spent on a job. Did they over-service or under-service? Critical management decisions can be made with such information.

What features to consider?

At the heart of many time tracking software solutions is the real-time clock application that allows employees to sign in and like a stop watch, the application will begin counting the minutes and hours you worked until they "turn it off." Then the data is stored and can be accessed later as needed.

In addition, look for solutions that are flexible and will offer integration with both HR and financial functions:

  • Track HR information such as sick days, holiday pay, vacation days and more.
  • Create reports on hours billed, employee vacation and sick days, and more.
  • Integration with financial software so that you can track hours on a project and later bill the client.

How to choose Time Tracking software?

Choosing time tracking software is a matter of finding an application that fits your business needs. Many cloud-based solutions will offer much of the same features but here are hints to help you shop:

  1. Scalable and Applicable : Find a solution that is scalable to your business size and market type. There are several time tracking products that are designed for the SMB market as well as to certain types of businesses like the service industry. Many of these products have different price points depending on the number of employees that are using the software
  2. Free Trial Periods : Find a product that offers a free trial period - using the software without fear of paying for something you didn't like, is very helpful.
  3. Reports: Look for products that can include reporting features (most have this). Being able to back up your billing or payroll with reports is an important part of running a business.
  4. Flexibility : Make sure the product is flexible and allows you to create rules that align with your business such as recording sick time and holiday pay.
  5. Customers : Look for solutions that have positive customer feedback. This seems like a no-brainer but there are plenty of sites out there that allow people to post their frank opinions.

Selection of Time Tracking Apps

The "Discover Cloud Applications Series" consist of a set of evaluation tools for small businesses. For the main solution categories such as CRM, Project Management, Time Tracking, Help Desk., Accouting… We share practical tips and guides as well as direct you to products that are affordable, scalable to almost any size business.