There are many reasons why time tracking within the organization has become increasingly important, but when people normally hear time tracking, they mostly think of tracking time to pay their employees (generally referred to as time and attendance). While accurately paying your employees is obviously very important, it has become a necessity to improve the way the organization tracks time on projects.
Time and Attendance vs Project Time Tracking: A Brief Comparison
To put it briefly, time and attendance systems are specifically designed to track employee time for payroll purposes. Time and attendance software can be web-based, or even be a punchclock system. In addition, they can be used to manage paid time off (PTO), employee schedules, and overtime.
Project time tracking systems are specialized for project accounting purposes, and therefore has much different functionality for a much different role. Project time tracking software can, however, have some of the time and attendance features mentioned previously (like tracking PTO and overtime).
Why is Project Time Tracking So Important?
In order to achieve operational and profitability goals that each of us strive to achieve, it is now critical for organizations to track their time on projects. Measuring costs on projects and accurately billing customers are the key drivers to achieving operational and profitability goals of the organization. Tracking time on projects will help you answer these questions:
- What are we actually working on?
- Which projects are winners or losers (or, what should we be working on)?
- How are my projects doing compared to my initial budget/estimate?
- How can I better estimate my future projects based on historical data?
- What are the major bottlenecks in our operations?
- How much can I invoice my customers, and when? (If your project-based work is billed to customers)
Without the answers to these questions, it is almost impossible to measure the success of the organization. Better time tracking on projects will allow the organization to:
- Have better project and resource insight
- Provide a higher level of accountability
- Make better financial business decisions
- Give their customers a better overall experience
- Realize increased profitability
Time tracking’s not just for payroll anymore. When you or your executive leadership asks “Are we making money or saving money?”, the answers can only be attained by tracking time at the project level.