Why you should use job and time tracking software

For small businesses, time is money – and every day counts. Here are some of the key benefits of time tracking software.

Time tracking software running on a mobile phone

Manual processes aren’t efficient

For many teams, the way things are still managed is with a good old Excel spreadsheet, copying across to an invoice when it’s time to bill. Sometimes it’s even a case of guessing or making up the time when invoicing because it wasn’t tracked at all! Unfortunately, if you’re still doing this (or even using poor time tracking software) then you’re bound to be costing you and your team time. If your business doesn’t track time properly, you’re also missing out on valuable insights that could make a real difference for your business.

Streamline the billing process

Let’s start with the money: using good time tracking software will dramatically streamline your billing process.

Stop spending hours copying data from spreadsheets or between systems into your billing system. Cloud-based software talks to each other, and the great thing is that time tracking software products are often leading the pack in this regard. Invoicing should be as simple as clicking a few buttons to get a bill into your online accounting software and sent off to your customer.

Since your time tracking system is generating the information on your invoices, you’ll be able to easily include all of the data about the time spent. This will give your customers more insight and information into what’s in the bill. This leads to better communication and happier customers!

Get visibility into your profit (and cost) centers

To run an efficient business, it’s critical to have the data you need to make informed decisions. One of the most common issues for many businesses is working on clients or projects that turn into costs, at the expense of other projects that are more profitable.

By using time tracking software, you’ll get key insights as to how much time each project or client is really taking to get the job done. If you budgeted 20 hours for a job, and it’s closing in on that mark too soon, you’ll know right away and be able to deal with it before it’s too late. Conversely, if you’re getting a job done well under the budgeted time then you know you’ve hit on some profitable work (and should look for more of it!)

You can get really effective at monitoring profitability if you combine time-tracking with project management software. Then you can pull up a dashboard on various jobs to check that they're actually making you money.

Data to help you get your estimating and quoting right

Getting an estimate or quote wrong can be a real drain, both in terms of enthusiasm to work and your company’s profitability. Basing your estimates or quotes on past experiences is often the way you work, and having real data to draw upon from similar past jobs can make a big difference in your accuracy.

Most time-tracking software will allow you to tag time entries for certain types of work (so you can refer back to them). When the time comes to quote for another piece of work, you can drill down into where time was spent to jog your memory.

Know who your star employees are (or who’s falling behind)

It’s important to know who your top employees are – they’re the ones who are having the best impact on your business. Likewise, having easy visibility into who your poorer performing employees are can give you early opportunities to rectify bad situations before they get worse. The reporting functions of time-tracking software will give you all the data you need to make these insights.

Knowing which employees are getting through jobs much quicker than you expect can give you the confidence to remunerate them better to retain a strong employee. Or it can also give you the ability to pitch for additional work with your team’s spare capacity.

Some employees just won’t be cut out for certain work, and with the data on hand you’ll be able to quickly see who is taking longer than they should to knock through jobs. The sooner you deal with this, the less impact it will have on your business. Train up lagging employees, or reallocate them to different jobs that they are better at. You’ll have the quantitative data to know exactly what impact this has.

This kind of data and insight can be invaluable as you grow your business.

Job tracking software keeps your team productive

Keeping yourself and your team productive is critical if you want to run a humming business. There are countless productivity techniques and guides available, but one of the simplest things you can do is simply start tracking where your time is going. The very act of doing this keeps your productivity at the forefront of your mind.

Setting up an expectation and culture around honest and active time-tracking (that is, tracking your work as you’re working, rather than making it up at the end of the day for your timesheets!) can actually ingrain a productive attitude and process in your team.

Pause your timer when you’re distracted on social media for five minutes, or while you’re on a break in the kitchen making coffee. You’ll soon start to realise how many unproductive context switches you’re making every day.

There’s nothing wrong with a break every now and again, but doing your best to keep productive and working on what you’re tracking will go a long way to knocking through work faster.

Make your business more profitable

Every business owner’s goal is to make more profit, and this is exactly what all of the above benefits work towards doing.

By being more efficient at billing, having the data and insight at hand to make a difference in how you do business, and working towards a productive culture and process – you’ll become more profitable at what you do. As other businesses (your competitors) get more savvy, this will keep you competitive and your business successful.

Six reasons why people push back on time-tracking

If you’re stuck in your old ways, you probably have past experiences that are stopping you from trying out a new process. We’ve put together some of the most common push-backs we see, and debunked the excuses with different ways to think about them!

1. “It’s boring and a pain to do. We start, but end up falling back to old ways.”

When most people think of time sheeting, it probably brings up dreaded memories of the end of the day and just wanting to go home. The good thing is, this doesn’t have to be the case. There is a lot of great software out there that targets different types of businesses and team sizes. Depending on the size of your team, you’ll probably be able to find a product that can even make it a little fun.

Figure out what it is that's important. If you’re a larger business, sometimes control over the business process is the most important thing, and the look and feel or enjoyment in use of the product may come second (in which case, you might have to just nag your team to build that habit). But for many businesses, finding great software that isn't boring and has a bit of personality is an option, and may be the best course of action (don’t pick a boring old ugly product unless you have to!)

2. “I forget to do it.”

Remember when we talked about ingraining that attitude and habit? That’s the critical thing here – you just need to force yourself and your team to get into that mode, just like going to the gym for the first few weeks. After that, it will become second nature.

The good thing is that most products have reminder options which will prompt you if you haven’t started tracking or logging your work. And of course, as a business owner you may have to nag your team for a while (just like your personal trainer at the gym had to to get you going!). Just remember – you’re working towards ingraining an attitude and process, to get all the benefits that go along with it.

3. “I don’t know how much data to track.”

This is a really common situation – different tools will sell you on the vision of having all this data, and the examples and sales pitches sound fantastic. But when it comes time to your real business, sometimes it can be hard to know where to start.

The answer is to start with the basics and work your way up. You don’t need to go from nothing to the perfect system and data in one step. Start simply tracking a basic description. Then, depending on the product you’re using, work your way up to more advanced job tracking and tagging to empower your reporting and visibility. The most important thing is to ingrain the initial habit, then build on it.

4. “We have too much context switching to track effectively.”

For some industries being able to sit down for a few hours and focus on one job is a luxury. If your work involves frequent context switching, the most important thing is to make sure you pick a time-tracking product that suits your situation. The great thing is there are lots of different options, each with their own strengths and weaknesses. Look for a product that makes it as simple as possible to swap what you’re working on, and swap back again. One industry’s perfect product can be another’s nightmare – so try out the various options and pick the one that will work best for you.

5. “I’m out and about on jobs too often and don’t get a chance.”

If you need to track time on the go, then make sure you look at the specific needs of your business. Perhaps you need a product with a heavy mobile focus. Time and job tracking software is not exclusive to the desktop anymore, and there are a lot of great products available for your smartphone or tablet.

6. “We work on fixed price projects and don’t need it.”

This is a really common push-back, and one that is almost certainly wrong. In fact, it’s most likely the opposite – if you’re working on fixed price jobs you should most definitely be tracking the time you spend to figure out how profitable you are!

How well does your business and team scale? Are you losing money on certain projects? What is your effective hourly rate? Are some of your employees making more money than others on certain types of work? All this information is critical in making informed business decisions.

Even if you’re not billing by the hour, you’re still providing a service with a time component, so tracking your time will still give you all of the benefits we’ve already outlined above.

Become a better business by tracking your time

We’ve covered many of the benefits and invalidated many of the excuses. If you’re not already using great time and job tracking software, now is the time to start making steps towards a more profitable business. If you pick the right software, you may even enjoy it!


Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

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