How Small Business Can Benefit from Time Tracking
Thursday, April 26th, 2012
As a small business owner, it can be hard to justify going through the motions and controls of the larger corporations. Your time is already limited and enterprise software can be quite expensive. So when I say that you really should be comprehensively tracking employee time, you might be skeptical. Let me tell you why you shouldn’t be.
Timesheet software is not just for payroll. Increasingly, operational process accounting and project accounting (often for client billing) is becoming important to professional organizations of all sizes. As a growing small business, it’s time to start thinking past paper-based or homegrown timesheet systems, Microsoft Excel spreadsheets, or multiple installed time collection systems that produce inconsistent data. Without timesheet software, it is very difficult to understand project costs.
How can you be sure you’ll get a system that works for your company and is immune to common problems experienced when buying a timesheet collection automation system? Here are a few things to consider:
Have a Buying Process
Too often–in large and small companies alike–the key statement in the buying process is “Look at this cool thing I found on the Internet.”
The result of this is usually wasted time and money. Timesheet software will touch everyone in your company. Nobody likes to track their time, so it must be simple to use, have a friendly interface and encourage accurate data collection in every way possible. The system should serve as a real accounting system with double entry methodologies and approval processes, and have automatic reminders for the procrastinating, busy, forgetful executive (you know who you are).
First, you need a requirements list. This will enable you to eliminate scads of vendors that pop up when you Google “timesheet.” To assemble your requirements list, ask all the different departments in the company that will be affected by the system for their input.
Here are a few potential requirements:
- Do you need to verify invoices sent to you by contractors, and test the timesheet system on them first?
- Do you need a system that prevents people from tracking time against projects they shouldn’t have access to?
- Do you need to send payroll data to ADP or Paychex?
- Do you need to send billing data or payroll data to QuickBooks (or Dynamics or SAP or Oracle)?
- Do you need to get the system rolled out now with no time to wait for IT to buy a machine and transfer it to your IT shop when they’re ready?
- Do you need to split-bill back project costs to other internal departments?
- Do you need to fix your estimation process?
- Do you need Defense Contract Audit Agency (DCAA) compliance or very accurate IT capitalization data for the Sarbanes-Oxley Act (SOX)?
- Do you need to understand your R&D costs on a per-product basis?
- Do you need a tightly-controlled but distributed purchasing process where everyone gets a company credit card?
- Do you need to reimburse for mileage?
- Do you need a low monthly fee rather than a giant one time fee?
There is No Magic Fix
I recently saw a statement on one vendor’s site that they can “implement in 2-3 days.”
Not going to happen. You can’t roll out your time tracking system in two days unless your problem is simple enough to only include one of the above requirements. And if you think your requirements are that simple, you’re probably wrong. But if they really are that simple, don’t spend your money on software; stick with Microsoft Excel.
The technology is powerful and it can help your company become more profitable in a number of ways. It can lower your payroll processing cost while increasing accuracy. It can also speed up your billing and convert more A/R to cash; automate travel expense reimbursement; and most importantly, it can tell you which projects are broken before you would ever have known it before.
Vendors that claim two-day rollout times are just plain lying. Don’t let them fool you.
This is not a complex process but is one that requires time and energy to accomplish it correctly. In part two of this series, we’ll cover questions to ask to make sure the demo is rock-solid, and the advantages of software-as-a-service versus installed software.
Courtesy: Small Biz Trends