Considering Small Business Time-Tracking Software

By Julie Knudson | Posted April 01, 2015

Choosing the right time-tracking software for your small business requires taking a close look at the various functions provided. Some replace physical employee time cards with a system that efficiently translates hours into payroll costs. Others provide a more accurate solution for capturing employees' billable hours when creating client invoices.

Small business needs frequently differ from one another, so you need to invest a bit of legwork and planning to find which program works best for you. We spoke with experts from time-tracking software companies to help small business owners make better purchase decisions.

Time-tracking Software Features and Functions

Small business adoption of mobile technology has influenced the feature set found in time-tracking software platforms. "You have more workforces becoming more virtual and on-the-go," says Murray Hidary, co-founder and CEO of time tracking software provider eBillity. If your small business relies on mobile tech, look for a solution that supports the mobile devices and operating systems deployed within your business.

[Small business owners] want to be sure it satisfies the mobile profile of that company," Hidary says. "If their employees have iOS and Android devices, then they need to make sure the time-tracking system satisfies all those cases." Web portals may also be available to address a variety of OS requirements—where employees rely on personal devices rather than a single company standard, for example—so check with vendors about which connection types they support.

Time-tracking software for small business

During the product evaluation phase, Danny Wen, co-founder of time-tracking platform Harvest, says be sure to consider the system's usability. "You want a solution that's designed for the end users," he explains. "A lot of time-tracking solutions out there have historically been designed from the management or the business's perspective."

Rather than creating a system that makes it easy for workers to track and enter their time—where the process integrates easily into the daily workflow—some solutions focused their design efforts on running reports and providing the backend view of the data. "At the end of the day, people don't really want to have to spend a lot of time doing this," Wen says. "They just want to capture the data and move on." To maximize employee compliance, consider how easy it is to use the system on a day-to-day basis.

Capturing time is only one side of the coin. Wen says the other side is about pulling useful nuggets out of all that captured data. "When you're tracking time, you tend to want to do something more with that time, whether you want to report it or to analyze it," he says. The tracking platform you select should be able to accomplish those second-tier functions, or it should cleanly integrate with another system dedicated to those tasks.

"If you want to analyze how billable you were for a certain time period, or if you need different rates for different projects and clients, make sure that your solution has the features you need to do so," says Wen.

Launching a New Time-tracking System

If you want to launch your new time-tracking system smoothly, be sure your employees know why you need the new platform and what you expect of them. They might be worried it's a Big Brother kind of effort, or that you're trying to catch people who are doing things wrong. "In most cases, it's not really about that," Wen says. "It's more about understanding the cost of doing certain tasks and understanding how much effort those tasks take."

Conveying that information to employees helps allay their concerns and brings them on board. "That way, they know the motivation is to have more clarity in operating the business," Wen says.

Businesses should expect to do a bit of legwork in advance of deploying any new time-tracking platform. This may range from uploading databases from existing systems to creating categories for capturing both project and client time. "The core elements are your customer list— including client names, addresses and other contact information—as well as your project names," Hidary explains.

In addition, small business operators may have invoicing information to upload, such as client histories or other details. Some time-tracking solutions have a mechanism to export data from existing systems (HR software, etc.), so be sure to ask your sales or installation rep about the availability of any time-saving information-transfer tools.

To get the most out the new system, small business owners and their employees must also commit to using the platform efficiently on an ongoing basis. Unfortunately, too many companies play the catch-up game when it comes to tracking time.

"Basically that means you've got a firm that goes back at the end of the day, week, or month to review a client or to review the employee time. Only then do they catch up and fill it in after the fact—based on meetings or other notes they might have," Hidary says. It's a dangerous game, one that's ripe for mistakes.

Once the new system is installed, Hidary says employees and administrators alike need to be committed to doing things correctly. "It's important that they get used to using it in real time, whether it's just clocking an hour at end of the meeting or actually using the timer to track the exact amount of time for that particular activity."

Julie Knudson is a freelance writer whose articles have appeared in technology magazines including BizTech, Processor, and For The Record. She has covered technology issues for publications in other industries, from foodservice to insurance, and she also writes a recurring column in Integrated Systems Contractor magazine.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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