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What is time tracking software?
Time tracking software tracks the total time spent by employees on tasks and projects. This software captures employee time, hourly wages, and client billing rates and using this information to automate invoicing and payroll management functions.
The benefits of time tracking software
- Effective tracking for freelancers and remote workers: As businesses increasingly move toward mobile workforces, this trend poses multiple time-tracking challenges. It is frustrating to track attendance and time worked for each freelancer or remote employee separately. Time tracking software records attendance and time worked for employees and collects it on a dashboard for managers. Some time tracking tool also offers automated screen capture, which enables users to monitor the total time spent on non-work activities by remote workers and freelancers.
- Efficient payroll management: Payroll calculation is a time-consuming process. Payroll managers need to coordinate with employees and their managers to collect a series of information such as timesheets, hourly wages, leave records, and overtime pay to calculate employee's compensation. Time tracking tool captures in- and out-time for employees and provides users with reports on total hours worked and leave taken. The software also incorporates other payroll calculation factors such as differential wages and employee incentives.
Typical features of time tracking software
- Billable and non-billable hours: Track billable and non-billable hours related to a project.
- Online time tracking: Capture employee and task times using online applications that can be accessed and synced through a browser, mobile app, or desktop application.
- Automatic time capture: Record in- and out-time of employees and calculate number of hours worked. Users can also capture time using biometric and other electronic time-capture methods.
- Employee database: Store staff contact information and project statuses.
- Overtime calculation: Record and manage overtime hours for employees.
Considerations when purchasing time tracking software
- Mobile access: Due to an increasing trend of remote workforces , mobile access has become a necessity in today's software market. A time tracking mobile application allows remote workers to record their schedules, submit time-off requests, and view changes to their schedules on the go. Some products also offer GPS tracking, which enables managers to track the time spent by their field staff at a client location. Businesses that currently have, or are planning to introduce remote working policies for their employees within the next two to three years should evaluate products based on this functionality.
- Compliance requirements: Today's businesses are subject to a number of payroll and wage-related compliances such as the Fair Labor Standards Act (FLSA), the Affordable Care Act (ACA), and the Defense Contract Audit Agency (DCAA). For example, the Fair Labor Standards Act (FLSA) mandates strict standards regarding minimum wages and overtime pay and imposes severe penalties on business that do not comply. A time tracking tool that tracks these compliances alerts managers when employee hours go beyond the recommended levels and ensures that overtime pay is incorporated in the employee payroll. Time tracking tool also provides standard reports related to these compliances. Businesses should prepare a list of compliances and regulations in their line of work, and shortlist time tracking system that supports them.
Relevant time tracking software trends
- Artificial intelligence (AI) is the next big thing in time tracking system: The need for efficient methods of capturing work time is fueling the demand for artificial intelligence in time tracking software . AI technologies such as facial recognition provide time tracking software vendors with fool-proof ways of capturing employee time. Not only do these methods automate time capture of employees, they also eliminate instances of buddy-punching. We can expect to see more use cases of artificial intelligence in time tracking system within the next five years.
- Adoption of chatbots is on the rise: Adoption of chatbots is growing faster than ever . Following this trend, time tracking software vendors have also started exploring a number of use cases for chatbots in their software solutions. For example, chatbots can interact with employees to capture the status of their current tasks. The information is auto-populated on time sheets, thereby eliminating the need to manually track employee activity.