Several years ago when I was associated with a customer support team, I experienced the power of employee time tracking software. My experience with the team showed me how the use of employee time tracking software increased revenue and enabled the company to better manage employee time.

The team was responsible for providing technical support on a software product to customers who either emailed or called into the call center. Customers were billed in two ways. One was a fixed fee arrangement and the other was based on time spent on their incidents. Employees were required to keep track of their billable time. The time collected was used to invoice the customers who paid by the time spent on the incident. The team had less than ten employees and was in the early phase of the company’s life. Because of this, the team used paper and Excel to track their time since this was an inexpensive solution. Employees were free to use whatever method they wanted as long as they submitted their time to the employee doing the billing. That employee was then responsible for accumulating the time into an invoice to bill the customer.

As the team grew and the company started to make money, it was decided that an employee time tracking system was needed. The company thought the system would add some structure around their time tracking as well as make it easier on the employee who was creating the customer invoices. The company selected an employee time tracking system that allowed each customer to be set up as a separate project and for employees to electronically track their time against each project via a timesheet. Additionally, they set some requirements around the process. Employees had to record a minimum of 8 hours a day on their time sheets. This time included time spent on non-billable work, like meetings, training, vacations, holidays, etc., which were also set up as projects. The timesheets were required to be submitted daily and they were approved by a manager to catch errors early in the process. The company also set a utilization goal for each team member. The goal was to have each employee spend 70% of their time on billable work.

When the company implemented the employee time tracking system, they thought the biggest benefits were going to be greater insight into the work the team was doing and a reduction in the administrative time it took to create an invoice. The company did gain greater insight into their work. Because employees were tracking their time in an employee time tracking system, they could go into the system and look at a customer project at any time and see how much time was spent. This gave them greater insight on their customers – who they spent the most time with, the type of issues they were dealing with, as well as the ability to understand their profitability. On the profitability side, by collecting time in an employee time tracking system, they could now see the time spent versus the amount invoiced. This was particularly insightful on the fixed price contracts as they could now see if they were actually making money on them. Also, as expected, the company did realize cost savings on the administrative side of creating invoices. Because employees were entering time into the system and that time flowed to a billing worksheet with rate per hour information calculated, creating invoices was just a matter of accepting all the time that was billable, writing off unbillable time, or making other adjustments. This created a lot of efficiency and allowed invoices to be created in much less time, not to mention the reduction in errors from manually entering time.

Greater insight into customers and billing efficiencies were expected. The unexpected result probably had the biggest impact on the company. By implementing the employee time tracking software and the procedures around time tracking, the company actually saw an increase of over 10% in monthly revenue from the team. The combination of giving the employees an easy way to track their time and the utilization goal resulted in more time being collected and invoiced. The interesting part is that it wasn’t that the employees were doing more billable work; it was that they were doing a better job of capturing their time. This was all facilitated by the employee time tracking software. Time entry was easy to do and it gave the employees a structured way to record their time.

My experience with the team really hit home on the importance of having the right tools to do the job. Tools that support the delivery of a service, like an employee time tracking system, are an important part of a company’s profitability. Understanding this and making sure your employees have the right tools has a positive and sometimes unexpected result.

Author Bio: Joe Young is President of Beyond Software, a publisher of project management system for small businesses. Beyond Software brings project functionality, such as employee time tracking, to users in an easy-to-use way that allows you to run your business more efficiently. For more information go to beyondsoftware.com.

Category: Business Management
Keywords: employee time tracking