How Can A Timesheet System Help Your Business?
Running a small business is challenging. We are constantly
required to perform a wide variety of tasks. For many of us, we
could probably define our job descriptions as: do everything!
Unfortunately, a portion of the everything that we do doesn't
contribute directly to the income of the business. However,
sometimes by adding a little extra administration we can
actually improve our productivity. In this article we are going
to take a brief look at timesheet systems, and determine if and
how they may help us improve our cash flow.
If you are reading this, than chances are that you have already
seen a need to implement some kind of time tracking system. If
you are already using timesheets in your business, you should be
aware that some systems are better than others, and it is worth
taking the time to investigate whether the system you are using
is providing you with the maximum benefit.
Businesses that bill clients for their time will need some
method for keeping tabs on the jobs they work on, in many
regions this is a legal requirement. While other businesses
types may not see any obvious reason to implement a timesheet
system, there are a lot of good reasons to consider using one.
If your business employs staff, than a timesheet system presents
an excellent way of keeping track of what your human resources
actually do. You may be surprised as to how much time staff
spend doing work that is not related to your core business
objectives. As an example, you may think that by not upgrading
your computers and software this year it is going to save you
money. However, your timesheets may tell you that your staffs
are spending a lot of time dealing with computer-related issues
that are not income generating, resulting in lower productivity
than one might expect. A timesheet system is an extremely
powerful tool for identifying and being able to help you
quantify the costs associated with these types of issues.
If you run a project-based business, where you may bid for jobs
with fixed-price quotations, implementing a time tracking system
in your business can save you money. In today's competitive
business climate, there can be a thin line between getting the
job or losing it to a competitor. Quote high and your competitor
may beat you based on price. Quote low and you may just get the
job, but lose a significant amount of money doing it. If you
have experienced these types of problems in the past, than it
may be time for you to consider a timesheet system. When you are
formulating a new quote on a job similar to one that you have
completed previously, look to your timesheet system to get an
understanding of the actual length of time the job took to
complete. You may be surprised to see which sub-projects are
taking most of the time. Lets examine two scenarios; In the
first scenario, the manager reports "we feel that project X came
in on budget but we need to budget for a little more time to
complete project Y in future quotations", which is useful
information that you can act upon. However, in our second
scenario the business is using a timesheet system, and the
manager reports "project X was completed at 23% below budget and
project Y came in 279% over budget, resulting in the overall
project being 160% over budget". We will inevitably all make
mistakes when we estimate the time it takes to complete a
project, however the business that uses a timesheet system can
quantify their mistakes, learn from them, and produce better
quotes in the future.
Few would argue that a timesheet system is not an essential tool
for tracking and analyzing business performance and
productivity. If you have a small business with one or a few
employees, and a few projects or clients, you can certainly use
a manual written timesheet system to good effect. Start by
creating a list of projects that you wish to categorize your
time by. You may wish to further break down your projects into
sub-projects, so you can get more detailed information about
what has been done. Don't forget to include projects for both
internal (i.e. accounting, administration etc) and external
(i.e. client job) purposes. Once you have done this, create a
timesheet with spaces for putting time against each project, and
a space to put the employee name and date, and distribute it to
staff.
Once you have more than a few staff, or if your projects start
to get more complicated, it is worth taking a look at the
software packages that are available to make the process a whole
lot easier. Some companies choose to start off using a
spreadsheet program such as excel, but my experience with these
type of systems is that they can require a lot of work and can
be error prone, probably costing many times more than an
inexpensive off-the-shelf timesheet software package. Most of
the major time tracking software packages will have everything
you need, including support for multiple staff and users on the
move, central company project and client lists, and detailed
reports of the work done by all of your staff. Most will also
link to third party applications such as accounting and project
management software. As most software applications tend to work
differently, sometimes these links can be more of a hindrance
than help, although at times they can also be genuinely useful.
One software package also tracks computer based work to help
staff fill in their timesheets, see Spherical Technology's
timesheet and time management software for more information.
In addition to automatically filling in timesheets, this
software also links to major accounting and project management
packages, has a number of useful reports that provides profit
amounts for each and every project worked on, and can be
evaluated for 30-days free. In all cases, I recommend that you
download a demonstration copy of the time tracking software
application that you wish to buy and try all relevant features
before committing to it.
Once you have introduced your timesheet system, you will be well
on your way to discovering more about your business. Timesheet
systems give you information to help you make better business
decisions, increase productivity, and can give you an edge over
your competition. Best of all, you can make your timesheet
system grow with your business, allowing you to continually
fine-tune your processes to maximize the financial reward.