How to Improve Efficiency in the Workplace Using Time-Tracking Software

Managing workplace efficiency can be overwhelming and demanding for many organizations, especially those yet to start using efficient time-tracking software. 

As a business owner or manager, tracking employees’ work time helps you know what tasks they’re working on and how productive they are. You can also make better estimates, efficiently bill your clients, and minimize bottlenecks through the data you collect from a time-tracking system. 

To help you understand how best to improve efficiency in the workplace using a time-tracking software, we’ll look at: 

1. What a time-tracking software is
2. How does a time-tracking software work 
3. Why you should use a time tracking software
4. What is the best time-tracking software for your business
5. How to use time-tracking software effectively 

Whether managing a small team or an extensive group of employees across several branches, this guide will help you improve employee efficiency and boost productivity.

What Is Time-Tracking Software?

Time-tracking software is a time-management tool that records the time employees spend on tasks or projects using a unique identifier. Businesses in different industries use time-tracking software to bill clients accurately, track employee time utilization, and automate payment.

Whether you employ full-time workers or freelancers such as accountants, lawyers, or software engineers, a good time-tracking tool helps you manage your team’s productivity more efficiently. However, you must understand how this system works to enjoy its full benefits in your business.

How Does a Time-Tracking Software Work?

Time-tracking software tracks employees’ time using the same principles applied in paper timesheets or spreadsheets, only that it automates the process. 

Instead of recording logged time manually against each employee’s name, the software identifies and automatically records employees’ data every time they log in. 

Employees can access their data digitally through an app or online platform, where every activity they perform during work hours is recorded and compiled as a report. 

The working principles of time-tracking software can best be summarized into three major steps:

1. Employee Identification 

A time-tracking system first identifies every employee who logs into it, ensuring that only the right people are accorded access. Through the system’s identifier, an employee can verify their identity and gain access to various company projects. This identification process ensures that your company data is only available to the right team members.

2. Data Compilation

The system will compile and organize your employees’ data from when they log in until they log out. Some tracking systems will automatically stop recording when your employee is idle so that only active hours are compiled and organized into the day’s report.

3. Generation of Reports and Insights

The software generates detailed reports and insights that are easy to understand. You can use the data to make several business decisions, such as paying your employees and deciding promotions.  

The reports and insights can include:

• Time spent on each project
• Productivity
• Billable hours
• Project return on investment (ROI)
• Project progress
• Timesheets

Different time-tracking systems have varying features that make them stand out in different business settings. Some have more efficient features for tracking billable hours, while others make evaluating the system’s ROI easier.

However, regardless of the software you choose for your business, you can trust they’ll achieve the above three basic operation steps. Anything extra you enjoy will result from the software’s unique features and their compatibility with your business needs.

Why You Should Use a Time-Tracking System 

A time-tracking system offers several benefits to your business and employees, ensuring a good employer-employee working relationship. It’s also your best shot at improving efficiency across various departments in your organization. 

Here are some outstanding benefits of a good time-tracking system:

Improves Productivity

A time-tracking system helps keep your employees on their toes. Since their earnings depend on working hours, they’ll do their best to meet their time targets. For instance, your full-time workers will progressively start hitting the daily average of 8.5 hours, which people in their category achieve every weekday.

Also, since the software tracks and reports all employee activities, there’s a reduced chance of time theft. You can trust that what’s reported by the system is the employee’s accurate, productive hours. 

Boosts Transparency and Trust

As a boss, you wouldn’t want to micromanage your employees, and they would also not like having their superiors monitor them all the time. A time-tracking system eliminates the need to constantly check what your employees are doing. You can rest knowing they are working on the right projects at the right time. 

Additionally, when your employees see you tracking your time in the same system, they’ll feel respected, as everyone follows the same rules. This builds more trust and encourages a positive working relationship.

Helps With Compliance

Businesses in the U.S. must follow record-keeping and labor management rules established by the Defense Contract Audit Agency (DCAA) and the US Department of Labor (DOL). 

The DCAA checks whether your business is compliant with the set time-keeping and accounting requirements, including: 

• Precise record-keeping with audit traces for all changes
• Daily time-tracking
• Detailed reporting
• Specific supervisor approvals

Signing up with a reputable time-tracking software can help you ensure compliance with local laws. 

A good system will:

• Track employee working hours
• Manage employee data
• Track overtime data
• Audit records and track changes, among other abilities

Creates More Reliable Project Estimates

When hiring for a new project similar to one you had completed, you would want to use more reliable time estimates for planning and budgeting purposes. A time-tracking tool offers time-tracking data that allows you to estimate the time needed to complete a task. 

When assigning a new project, you can look back at similar projects you’ve completed before to estimate the time needed to work on them. This saves your company time and money.

Eliminates Human Error

Filling out timesheets manually has several challenges. People can forget the correct time they spent on what project, leading to inaccuracies and business losses. Time-tracking software offers a more reliable way to track time and work events. The data generated can be relied on for payroll and client billing, as it is dated and timed to back up every report.

What Is the Best Time-Tracking Software for Your Business?

Clockify is one of the most preferred time-tracking solutions for small- to medium-sized businesses for many reasons. Its free-forever pricing plan is an irresistible feature that attracts many small companies looking for their first time-tracking tool.

However, price is not the only positive aspect of this new-age tracking software. Clockify boasts numerous outstanding features that make it the go-to time-tracking software for the five million and more customers it serves. 

As a manager or business owner, you’ll find Clockify’s time management features helpful in managing schedules, tracking expenses, creating invoices, and controlling budgets.

Sign up for free to explore Clockify’s time management features.

Clockify’s Time Management Features

Clockify’s features allow you to track attendance, productivity, and billable hours much faster. 

The features can be summed up into three categories—timekeeping, reporting, and management.

Timekeeping		Reporting		Management
Feature	Benefit	Feature	Benefit	Feature	Benefit
Timer	Tracks work hours in real-time.	Reports	Compiles and reports tracked time.	Scheduling	Schedules work, shifts, and assignments.
Timesheet	Record time.	Activity	Shows who’s working on what.	Time off	Manages leaves and holidays.
Calendar	Blocks out and manages time.	Rates	Showcases earnings, costs, and profits.	Approval	Submits and approves timesheets.
Auto tracker	Tracks apps and websites.	Projects	Tracks project estimates and budgets.	Invoicing	Creates invoices from billed time.
Kiosk	Allows clocking in from a shared device.	Location	Shows routes and sites visited.	Expenses	Records all project fees and expenses.
				Team	Manages teams and roles.

When used effectively, these time management solutions will help you run your business more efficiently, boosting productivity and revenue. 

How to Use Time-Tracking Software Effectively

Knowing which time-tracking software to use is one thing, but understanding how to use it effectively for your business is another. The following time-tracking software best practices should help you optimize the tool’s benefits for a rewarding outcome.

Inform Your Workers You’ll Be Tracking Their Time

With 31% of monitored employees feeling micromanaged in 2024, it’s important that you inform your employees when you start tracking their time. This will prepare them mentally and open avenues for asking questions about the software and its workings.

Informing your workers before time helps build trust and allows everyone to express their concerns, which you can address before implementation. You should assure your team that their privacy rights will not be compromised and that the tool is only a means to help improve efficiency and overall productivity.

Run a Pilot Test 

A good time-tracking software will give you an extensive free plan that you can use to test its capabilities for a few days before upgrading. Running a pilot test will give you an idea of how it feels to work with the software. 

You can measure what your team lacks or needs and match those needs with a plan that efficiently accommodates them. 

If you’re planning to onboard a time-tracking tool and don’t know what pricing plan to jump into, the following table could guide you:

Demo pricing plan	The main capabilities	Action to take
Basic/Free	Time tracking	Stay here if all you need is to track time
Pro/Intermediary	Optimizing profits and productivity	Jump here if you need to track time and optimize profits.
Business/Enterprise	Security and privacy	Move here if you need everything in the free and professional plans and enhanced security and privacy.

Add Every Employee to the Same Tracking System

Regardless of your company size, adding all employees to the same tracking system ensures a seamless management and tracking process. Even if some of your employees work remotely or on the go, you can use the time tracking system’s GPS feature to track their activities wherever they are. 

Putting everyone together on the same tracking system boosts trust and confidence in the software. It also makes everything easy to handle and manage.

Improve Business Efficiency With Clockify Today

Clockify is the go-to time-tracking software for modern-day businesses that prioritizes efficiency and optimal productivity. 

While it has a few challenges, like synchronization issues with Android and limited functionalities regarding advanced project management, it’s still a robust tool for effective management. 

If you’re looking to take your employee management strategies to the next level at an affordable cost, Clockify will help you achieve that and more.Sign up today with reliable time-tracking software designed for business growth.