As a business owner, how you manage your time is very important.
Depending on what you do with it, you can either experience massive gains or a catastrophic loss.
Investing in a time tracking software, for that matter, is one of the best moves you can make to better manage your time.
In this guide, we’re going to look into seven different ways on how a time tracking software can help reduce your cost and increase your profit.
1. Time tracking software programs eliminate the need to rent an office.
Back in the day, one of the first things that you’ll need when you run a business is an office space.
For many business owners, this is where a significant portion of their capital is spent. After all, commercial rental rates, by themselves, are very expensive.
When you add the office furniture and equipment that you’ll need to get your business up and running, the cost quickly balloons.
And that’s just the start!
Each month, you’ll need to pay the rent, electricity, water, and your internet connection.
A more cost-effective alternative is to invest in putting together a virtual team and getting a time tracking software.
By doing so, you eliminate the need to rent an office to house your employees.
They can log in at the start of their shift by connecting to the Internet and accessing it on their favorite web browser.
Also, the amount you’ll invest in an online time tracking software is far cheaper compared to what you’d otherwise spend for a physical office.
What’s more, hiring a virtual team gives you more options when it comes to hiring your employees.
You can go to freelancing marketplaces to hire people with the skills you need at affordable rates, further reducing your costs.
2. Efficiently manage your employee’s schedules.
If you’re a business where your employees work in shifts, it’s vital that you’ve got a sufficient workforce at any given time so that your business runs smoothly.
A time tracking software can help you quickly plot your employees’ weekly work schedules and let them know about it in real-time.
It’s also beneficial when you need to make some last-minute changes because of an illness or an emergency.
Deputy.com’s time tracking software, for example, recommends employees who are available to come in and cover the shift based on the employees’ availability and work schedule.
Not only can you quickly find a replacement because of the software, but you can also ensure that the replacement employee won’t be too overworked to do the job.
3. Set limits on your employees’ billable hours.
One of the biggest challenges when working with a remote team is paying for unapproved overtime.
You can avoid this from happening by setting a limit for each employee’s weekly hours the moment you add them to your team.
Limiting your employees’ billable hours also encourages them to become more productive because they only have a fixed number of hours to finish all their tasks.
4. Automate your payroll and invoices.
Your employees expect the same punctuality with their paycheck as you do with them showing up for work.
What your employees don’t realize, however, is that payroll is a tedious process.
First, you review each of their timesheets. Then, you’ll compute their weekly pay. After that, you’ll have to deposit their paychecks one by one, among other things.
Using a time tracking software program allows you to automate your entire payroll process.
You can set each of your employees’ pay rates when you create their accounts.
The time tracking software program will take care of the computation for you and include it in your employees’ timesheet.
You can then export all of their timesheets to Xero, MYOB, or whichever bookkeeping/accounting software you’re using to manage your payroll.
This integration also allows you to create invoices for your clients quickly. You can also schedule when they should be sent so that you get paid on time.
5. You don’t have to wait for your employees to send you their timesheets.
Even though your employees expect to get paid on time, you’ll be surprised that many of them don’t submit their timesheets on time!
With a time tracking software, you can review your employees’ timesheets even though they miss sending their reports.
And if you find any discrepancies in their timesheets, you can make the necessary adjustments from your end.
Not only do you get to pay your employees on time, but also be assured that you’re only paying them for the time you’ve agreed.
6. Identify areas of improvement in your workflow.
Time tracking software programs allow you to add workflow processes so that your employees know how you’d want them to complete a specific task.
At the same time, your time tracking software provides you with data so you can review the time it took for your employees to complete specific tasks.
That way, you know which areas of your process to adjust and help your employees work efficiently.
You can also review the performance of a specific employee that may be lagging in their work.
You can retrieve the data and focus on the tasks they’re struggling with and work together in adjusting the process.
7. Send (more) accurate quotes to your clients.
Aside from showing you how much time your employees spend working on their tasks, time tracking software programs will also give you the cost to complete a specific project.
You can use the data as a benchmark for the quotes you send to potential clients or when you negotiate with them about the rates you’ve quoted.
Just like you, your clients also want to try to cut back on their expenses, that’s why they’ll try to get you to lower your rates.
One helpful tip when it comes to negotiating your rates with your potential client is to get your total monthly cost data from your time tracking software and then add 60% to the amount.
In most cases, the amount will be enough to cover your operating expenses and employees’ salaries while still leaving you with a decent profit. (This can still vary, of course, so give your due diligence to study how you’re pricing your services.)
Any lower than this amount would mean that your business will only be breaking even or even lose money in the long-term.
Build a more efficient and profitable business using a time tracking software.
A time tracking software does more than help you keep track of how your employees spend their time at work.
It also helps you stay on top of your bookkeeping and become a more efficient business manager because by automating time-consuming tasks, you can focus on growing your business and increasing your profits.