Time is money – Time costs money

Time organisation tools for small businesses

Time Organisation Tools

However compensation is calculated in your organisation, the end factor is that time costs money. It's the reason many businesses have time sheets and why factory workers have to clock in and out on a daily basis. It is the reason that project managers running various projects allocate a proportion of their time to their time spent on different projects.
 
Without an appropriate timekeeping system, you are at risk of not understanding how your business works and how you could improve the accuracy of fixed price quotations and which projects are viable. Below is a detailed look at the benefits of accounting for your time.

Why record time?

For payroll:

In its most basic form, workers will track the time they spend at work using a ''clocking'' in system on a machine. The machine records the hours worked and the information is sent to payroll for processing. This method is generally used in factories or small retail units. This practice can protect both workers and their managers, as by ''clocking in'' the employee can be confident that their time is recorded accurately and that they won't be accused of being late. The system will also record any over time the employee is due. Managers, therefore, have the freedom to focus on value-added work.
For invoicing:
Law firms, virtual assistants, accountants and other professional service firms need to be able to track the time they spend on their clients accurately. Unlike other types of organizations, professional service firms sell knowledge and expertise - not tangible, physical products. These firms, therefore, have different needs and face different challenges.  If you are a manager at one of these firms it can be difficult to balance high productivity with a personalised service. These service firms must, therefore, spend time and energy coaching their teams and ensuring that their talented workforce stays with them. A high staff turnover is not favorable for any business.
 
 To identify productivity:
 
Professional service firms want to ensure that their staff maximises the amount of time they devote to generating revenue while minimizing the amount of time spent on admin duties. By tracking time, these firms can generate analytics based on how productive their employees are.
 
By recording the time spent on fixed price work the business can analyze how accurate their estimating process is.
 
small business, time keeping, ideas and innovation
To understand internal costs:
 
It is important for businesses to establish what different activities cost. This applies to both project-based work and to ''business as usual'' activities such as accounts processing. Time recording in these cases helps organizations identify what proportion of their costs are overheads and which are operational costs. By collecting this type of information firms are in a better position to plan future projects.
 
Some organisations have no choice but to use a timekeeping system. If you charge time to different clients or different projects you must keep track of the hours spent on these tasks. Some cloud accounting systems, like QuickBooks, even offer an unbilled activity function, whereby, the hours spent on a client can be tracked on a daily basis and then, simply emailed as an invoice when the bill is due.

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