How Do Timesheets Work?
Timesheets are typically filled out by the employees themselves. However, in some companies where employees use a time card system, the HR team might be in charge of filling out timesheet data.
The most common practice is for employees to fill out their timesheets on a weekly basis and submit them to their managers for approval. Managers use the timesheet data to calculate the total work hours, total regular pay, and overtime pay for their employees. They can also use them as part of the invoice they send to clients as proof of work.
If a company doesn’t use a client billing system, managers review and approve the timesheets and send them to the finance department for payroll.
Aside from payroll and billing, managers use the timesheet data for ongoing project management (e.g., to calculate labor costs and make delivery estimates) and planning future projects.
What’s Included in a Timesheet?
Generally, timesheets contain basic employee information such as:
- The name and surname of the employee
- The pay period for the timesheet
- The dates and days on which the employee has worked
- The employee work hours
- The start and end times of each working day
- The total work hours for the week
Time tracking software templates might contain more detailed information such as:
- The projects on which the employee has worked
- The tasks the employee has completed
- Overall task completion percentage
- Automatically calculated totals
- Notes section
How Do Manual Timesheets Work?
Manual timesheets are either paper timesheets or digital timesheets (e.g., Microsoft Excel and Google Sheets). Employees fill these timesheets manually with their work hour data and submit them physically or digitally via email to managers for approval.
Manual timesheets are cheap to implement and very simple to use. Companies don’t have to invest in pricey time tracking software or train their staff on how to use it.
On the other hand, manual time sheets have a few drawbacks, such as a potential lack of accuracy, the possibility of human error in manual calculations, and employee dishonesty. These drawbacks might result in payroll calculation issues, financial issues, inaccurate client billing, and more.
In project management, manual timesheet processing errors might hinder project cost calculations and task management, which might result in the loss of revenue, damaged business relations with clients, and tarnished billing history.
How Do Timekeeping Software Timesheets Work?
Timekeeping software is a tool that companies use to automate the timekeeping process and digitalize the time tracking records. The role of the time tracking software is the same as that of regular timesheets and includes tracking employee work hours for accurate payroll and billing and tracking their tasks and projects for smooth project operations.
There are quite a few benefits to using timesheet software, such as accurate work time calculation, accurate project data, the option to generate multiple types of reports, fewer chances for human error, and time efficiency.
The timesheet creation and submission can be done in just a few minutes and managers can also use timesheet reminders to ensure employees fill in and submit their data in a timely manner.
While time tracking software has a learning curve, it’s often intuitive and easy to implement.
The software is often available for download on mobile devices for employees who perform fieldwork, which makes it a great tool for remote workers.
The Key Benefits of Using Timesheets:
The use of timesheets in the workspace can help with:
- Accurate client billing.
- Accurate employee payroll.
- Automated billing cycles with time tracking software.
- Improved project management activities through tracking time, analyzing how the time is spent at work, and identifying workload bottlenecks.
Are Timesheets Legally Required?
Companies are required to adhere to the recordkeeping requirements under the Fair Labor Standards Act (FLSA). According to FLSA, employers are required to keep timesheet data with the total number of employee work hours.
Companies are often visited by auditors or inspectors who look into their employee timesheet records and assess their level of compliance.
In addition to the timesheet legal requirements, employers are required to keep additional employee records such as:
- The full name and surname of employees
- Employee Social Security numbers
- Employee address of residency
- Employee salary
According to FLSA, timesheets are considered legal documents, but the Act doesn’t require employers to utilize any specific time-tracking methods. Employers are free to keep timesheets in any form, be it with pre-made templates, digital templates, manually written time logs, or time tracking software.