Tracking Time the Right Way is Crucial for Finance
As a controller or director of finance, you direct all the financial and accounting operations of a company to ensure profitability is maintained. This includes:
- Analyzing financial performance against key business metrics.
- Documenting pertinent financial highlights that enable management to determine progress against budgets.
- Identifying, investigating, and analyzing potential operational improvement, and making proposals based on findings for operation changes.
In companies where a significant portion of the cost is from labor, you must know how many hours have been worked on a per project basis – without that information, you’re flying blind. This is why having robust processes for tracking time efficiently and accurately is crucial for performing these key financial functions.
So, HOW do these functions rely on time data?
Analyzing financial performance. When a company performs services for customers directly that involve human labor, you must understand the amount of labor that went into the work for each client. This leads to per-customer cost. From this you can figure the per-customer profit.
Determining key business metrics. To have useful metrics there needs to be data provided. This data must have a target to shoot for. Are we trying to be 10% profitable or 20% profitable, or just break even for this department? Once the data can answer these questions, then you will be able to measure those key metrics.
Documenting pertinent financial highlights. When metrics exceed certain thresholds, they become pertinent and worthy of reporting to executive management. With the correct data behind these metrics, management will be able to make more educated decisions.
Identifying, investigating, and analyzing potential operational improvement. For labor oriented businesses, understanding labor costs on a per-project basis is key if you intend to suggest operational improvements. Having this information also allows you to figure out if these improvements are working.
Having this labor time data on a per-project basis is therefore critical to doing your job as a finance professional. That means you have to get the people in your company to give you this data. However, nobody wants to fill out a timesheet, and even if they do, the longer it takes them to get around to it, the less accurate the data becomes.
Tracking every minute of each project has become much more difficult due to the nature of our work today. Employees deal with inbox overload with their emails every day, which makes it harder to keep projects straight. We seem to be torn between new ways of working, but older more traditional ways to track the time spent on different projects. If the process of filling out a timesheet takes TOO much time, it will counteract everything you’re trying to achieve with the process in the first place.
This is why it’s crucial to track employee time using an application that makes this as easy and efficient as possible, with capabilities that take the time and effort out of timesheets:
- Integrations with the software applications they use every day, such as email, calendars, and project management, will automatically fill out their timesheets with their tasks and the time spent on them.
- Integrations with your accounting/ERP software will make the processing timesheet data for payroll, billing, and project accounting 100 times faster and easier.
- Data validation capabilities will eliminate error correction and ensure the most accurate time data possible.
- Automatic reminders will make sure employees are submitting their timesheets on time, resulting in faster payroll and billing.
As a finance professional, you cannot do your job if you do not know your costs. You cannot know your costs if you don’t have accurate time data from your employees. This is why it’s in your best interest to have the right time tracking solution on your side.
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Journyx helps you track time for projects, payroll, and more. Learn how Journyx can help you use time to your advantage in your business.