Tracking Employee Hours: How to Do it Right

When you begin keeping track of staff hours, your first instinct may be to keep your method simple. So, you might ask hourly employees to log their shifts using a paper timesheet or punch clock.

But human error and lack of oversight end up complicating that kind of time tracking process. It also leads to inaccuracies with employee paychecks, and manually entering data into spreadsheets for payroll takes a lot of time.

Time tracking software can make recording employee hours simple. In this article, we’ll explore how it can make a difference for your business and discuss:

• How time tracking software works
• Six popular time tracking solutions
• The pros and cons of time tracking systems
• Best practices for accurate timekeeping

How Does Time Tracking Software Work?

Time tracking software typically works by letting employees clock in and out of their shifts from a web browser or an app on their mobile devices. Some tools also allow staff to log the time they spend on different tasks and projects.

Once employees enter their hours into the system, most time tracking solutions convert their hours into timesheets for payroll prep, saving employers from having to gather time cards and enter their data manually.

Time tracking software also helps business owners stay on the right side of state and federal labor laws by alerting them when team members are approaching overtime. And if you use a platform like Homebase, you can store your attendance and time information for up to four years, keeping you compliant with the Fair Labor Standards Act (FLSA).

How to Track Employee Hours with Homebase

Source: https://app.joinhomebase.com/schedule_builder#week/employee/1/23/2023

Caption: Once you publish an employee schedule with Homebase, the app will remind team members of their upcoming shifts.

Homebase works by integrating time tracking with scheduling, which saves you and your staff members from switching between different applications. Once you build and publish your schedule, employees can use their mobile devices to clock in at the start of each shift with their unique PIN. And the Homebase platform will notify you when staff are late for clock ins, so you can check in with them via messaging within the same app. Forget about having to scroll through your phone to try and find individual team member’s contact information.

Source: https://joinhomebase.com/time-clock/

Caption: Managers can enable GPS and geofencing with Homebase, ensuring off-site employees can’t clock in until they arrive at work.

Once someone starts their shift, the platform automatically tracks their hours, breaks, overtime, and personal time off (PTO). Homebase also turns employee hours into timesheets automatically, which means you don’t have to waste time on double entry when it’s time to pay your staff members.

And managers who work with remote and offsite teams can turn on Homebase’s GPS and geofencing functions. That way, no one can report to work until they get to the right place.

6 Popular Time Tracking Software Solutions

Timekeeping software can come with various features and integrations for processes like messaging, payroll, HR, task tracking, and inventory management. Let’s break down six popular solutions to give you a closer look at the range of options and paid plans currently on the market.

Source: https://joinhomebase.com/time-clock/

Caption: The Homebase mobile app lets you know when employees are late for work.

1. Homebase: As an all-in-one tool, Homebase combines time tracking, scheduling, hiring and onboarding, team messaging, payroll, and HR and compliance in one system, saving small business owners from investing time and money into multiple tools and integrations. What sets Homebase apart is how it integrates core HR processes for a seamless employee management experience — and you can do it all from your mobile device. Homebase is also more cost-effective than similar platforms because you can use a free account to schedule and track hours for an unlimited number of team members.
   

   Source: https://wheniwork.com/features/time-clock

   Caption: When I Work notifies employees when they’ve reached their limit and prevents them from taking shifts that push them into overtime.

2. When I Work: When I Work is a scheduling app for shift-based businesses. And like Homebase, you can use it to set up mobile punch clocks, track time and attendance, create and share employee schedules, and communicate with staff about absences and updates. But unlike Homebase, When I Work prices its plans per user rather than location, which means that as your team grows, so will the cost of your subscription.
   

   Source: https://www.deputy.com/features/time-and-attendance

   Caption: Deputy provides detailed labor reports so you can make more informed hiring decisions.

3. Deputy: Employers can use Deputy to build and publish employee schedules, easily make changes to weekly timetables, track time from any device, and stay on top of staff overtime and breaks. You can also access detailed labor reports and weigh them against sales data for more accurate financial forecasting. However, some users say they find the features and user interface (UI) difficult to maneuver.

   Source: https://getsling.com/employee-scheduling/

   Caption: Sling’s employee directory makes it simple to manage multiple business locations.

4. Sling: Sling is a great option for small business owners who need to handle scheduling and time tracking for employees across multiple business locations. With its staff directory, you can organize team members based on location, department, and position, making it easier for you to set up location-specific timetables, communication, and tasks. However, you may find that Sling’s free plan is limited because it only includes the scheduling tools.
   

   Source: https://www.fourth.com/solution/workforce-management/time-attendance

   Caption: With Fourth, employees can make changes to their own time logs, saving managers from having to manually update timesheets.

5. Fourth (formerly HotSchedules): Fourth’s Workforce Management tool lets you schedule employees, manage tasks, and track staff hours. It also gives team members more control over their time tracking by allowing them to make changes to their time logs and acknowledge edits the next time they sign in for work. But Fourth doesn’t have its paid plans listed on the website, making it hard to learn more about what you’re signing up for before you commit.
   

   Source: https://quickbooks.intuit.com/time-tracking/mobile/

   Caption: Quickbooks Time allows crew managers to clock entire teams in at once for more efficiency.

6. Quickbooks Time (formerly Tsheets): Employees can track employee hours with Quickbooks Time’s mobile app, and it also has crew functionality which lets crew managers sign entire teams into work at once. You may prefer Quickbooks Time if you’re already using other Quickbooks accounting products, but at $15 per month for a Basic plan, it’s still not as affordable as Homebase.

Pros and Cons of Using Time Tracking Software

While time tracking software has the potential to make your life easier, some platforms come with potential pitfalls to be aware of. Here are a few pros and cons to consider before you invest in a time tracking tool.

Pro #1: Accuracy and Security

Paper-based systems and spreadsheets might seem like straightforward timekeeping methods, but they don’t prevent errors and inconsistencies. Time tracking software, on the other hand, is designed to notify you about timesheet issues and discrepancies so you can review and fix errors before you run payroll.

Time tracking tools also help prevent buddy punching, which is when employees take advantage of the analog punch clock system to sign in for absent coworkers. And when you use Homebase’s free time clock, you can also guard against time theft by requiring staff to sign into their shifts with a unique PIN.

Pro #2: Quick and Easy Payroll

When you’re a new small business owner with only a few employees, gathering staff timesheets and manually entering the data into your accounting software may only take a couple of hours. But as your team grows, that system will quickly become less manageable.

Time tracking software gives you those hours back by integrating time clocks with timesheets and payroll. Homebase, for example, automatically updates employee timesheets when they clock into work. That way, when it’s time to process your team’s paychecks, it’s only a matter of clicking Run Payroll.

Pro #3: Compliance

The FLSA legally requires employers to store timekeeping documents for up to two years, which can include:

• Time cards
• Wage rate tables
• Schedules
• Records of wage additions and deductions

Both digital and hard copies of these documents take up space and can get disorganized and misplaced quickly. But a time tracking platform can organize and store everything for you.

Time tracking systems also help you stay on top of breaks, PTO, and overtime hours. And platforms like Homebase will notify you when a staff member is getting close to crossing the overtime threshold so you don’t infringe on local and state labor laws.

Con #1: Cost

Not all platforms offer their time tracking tools for free like Homebase. Some platforms, like Quickbooks Time, have flat monthly rates that start around $12 to $15 dollars per month, but many charge between $2 and $10 per user per month, making them less ideal for growing small businesses. Other competitors may also charge you extra for unnecessary add-ons and features, which could leave you with a large monthly bill.

Con #2: Difficulty of Use

Employees need time to get the hang of new tools. But if the software you choose has a poor or complicated user interface (UI), your team may end up tracking hours incorrectly, causing more work for you in the long run.

Con #3: Decreased Employee Morale

Paper-based systems and punch clocks largely rely on the honor system. And if you ask employees to transition to more secure and accurate time management software, they may feel you don’t trust them.

That’s why it’s best to choose an all-in-one tool like Homebase rather than a platform that handles time tracking alone. By doing so, you can explain that you want to streamline overall timekeeping, payroll, and HR processes and, ultimately, make the work experience more manageable for everyone.

Tips for Choosing the Right Time Tracking Software for Your Business

Using software can make time management more straightforward for you and your employees. But do your research before investing in a tool that burdens you with too many extra features, add-ons, and unnecessary costs. Here are a few tips:

1. Assess Your Business Needs: Start by evaluating what your business specifically requires from a time tracking tool. Do you need a basic system for clocking in and out, or are you looking for more advanced features such as project tracking, labor forecasting, or integration with other systems like HR and payroll? Your business size, the number of employees, and the complexity of your operations should guide your decision.
2. Integration Capabilities: It’s important to choose software that integrates smoothly with other tools you already use, such as payroll systems, HR software, or project management tools. Seamless integration not only saves time but also reduces the likelihood of errors that can occur when transferring data between systems.
3. User-Friendly Interface: The ease of use of the software is vital. If the system is not intuitive and straightforward, it may lead to resistance from employees, incorrect time tracking, and additional training costs. Opt for a platform that offers a clean, easy-to-navigate interface.
4. Mobile Accessibility: In today’s mobile-first world, consider whether the software has a robust mobile app. This feature is particularly important for businesses with remote or field employees. A mobile app allows employees to clock in and out from anywhere, offering greater flexibility and accuracy in tracking hours.
5. Compliance Features: Ensure that the software helps you comply with labor laws and regulations, including overtime, breaks, and leave entitlements. The right tool should automatically update to reflect changes in legislation, helping you avoid potential legal issues.
6. Scalability: Your chosen software should be able to grow with your business. Consider whether it can handle an increasing number of users and whether you can add more features as your business needs evolve.
7. Customer Support and Training: Good customer support is crucial, especially during the initial setup phase. Check the level of support offered by the software provider, including training resources, customer service availability, and the responsiveness of their support team.
8. Cost Effectiveness: While it’s tempting to opt for a free or low-cost solution, it’s important to weigh the features against the cost. Sometimes, investing a bit more can provide valuable features that save time and money in the long run. Look for transparent pricing models that align with your business model.
9. Trial Periods and Demos: Before making a final decision, take advantage of trial periods or request demos. This hands-on experience can be invaluable in determining whether the software is the right fit for your business.
10. Feedback from Existing Users: Lastly, consider feedback from current users. Online reviews and testimonials can provide insights into the software’s reliability, customer service quality, and real-world usability.

Ways for Tracking Employee Hours Manually

Despite the limitations of manual time tracking systems, some have more to offer than others. Here are a few common ways to keep track of staff hours manually.

Paper Timesheets

Business owners can purchase pre-made timesheets or create their own simple templates. Then, team members can record their daily hours and submit them to their supervisor at the end of every pay period. It’s up to managers or business owners to review the timesheets and ensure they’re accurate before calculating the total hours each employee worked and processing payroll.

Punch Clocks

At the start and end of each shift, employees clock into work by placing a time card into a machine or entering a code or ID number. The time clock device records their working hours, and employers can export the data to an accounting system to run payroll.

Card-based Systems

Employers issue each staff member a card with a magnetic strip or chip. Employees can then swipe their cards or hold them up to a smart card reader to record the start and end times of their shifts.

Pros and Cons of Tracking Employee Hours Manually

If you’re still on the fence about whether or not to stick with a manual timekeeping system, here are some advantages and disadvantages to keep in mind:

• Pro #1 — Easy implementation. Training employees to use a manual system is a relatively simple task. New hires won’t need prior experience with specific software or tools to feel confident about tracking their time.

• Pro #2 — Highly customizable. You have more control over your time tracking system. You can design a manual system to fit everyone’s needs, and it’s easy to adjust your timekeeping workflows over time.

• Con #1 — No way to accurately track remote employees. Offsite and remote team members may have to travel to your central office to punch in and out of work or log their hours. And even if they do, you can’t be sure their time tracking data will be 100% accurate.

• Con #2 — Harder to comply with federal, state, and local labor laws. Manual systems can’t detect or prevent human error. And you’re on your own when it comes to tracking breaks, PTO, and overtime hours. You’ll also have to create an organized system for storing your time and attendance data for the next two years to stay compliant with FLSA recordkeeping rules.

Best Practices for Accurately Tracking Employee Hours

You have options when it comes to choosing the right time tracking system. But here are a few tips to ensure you build and maintain a more streamlined, accurate timekeeping process.

Use a Web or App-based Time Clock

Web-based time clocks are more precise and accurate than paper-based systems. They also have the precision of mechanical time clocks but are better at preventing time theft and buddy punching.

Web-based time clocks are also designed to keep business owners compliant with labor laws by tracking breaks, overtime, and PTO. Plus, they make it so you can easily export your time tracking data to a third-party payroll software — or use a platform like Homebase and run payroll straight from your timesheets.

And with GPS and geofencing capabilities, web-based time clocks also make it easier for employees to clock into work off-site.

Let Employees Know Why They Need to Track Their Hours

If you aren’t transparent about your reasons for time tracking, your team might feel they’re being penalized for no reason. Make it clear to your staff that you’re upgrading your software because it’ll make their work lives easier — and simplify your payroll and compliance tasks as a small business owner.

Make Clocking in Easy

Team members sometimes forget to punch in when they arrive at work, especially when they start their shift in the middle of a busy day. An app like Homebase helps you avoid this issue by reminding employees when their shifts are about to start. And it’ll even ping you when someone’s late for work so you can check in with them.

Streamline Your Time Tracking with Homebase

The choice to switch from an analog time tracking system to web-based software isn’t just about your business needs and budget, although those are important considerations.

It’s also about paying your employees accurately and making the work experience easier for everyone in the process — and taking extra tasks off your plate so you have time to focus on more important, business-building projects.

Making life easier for hourly teams is what Homebase was created to do. That’s why we bring time tracking, scheduling, hiring, and messaging into one comprehensive free plan. And we integrate those with our tools for payroll and HR features, so it’s easy to stay compliant as you grow.