Most employers know why they need to track time (to make money and to pay people!), but are they familiar with the virtues of time tracking? Do they know how to get employees to efficiently follow company policies?

If time tracking feels more like a necessary evil to you than a business asset, read on and let our top 20 time tracking best practices guide you to time tracking nirvana!

Best Practice No. 1: Lead By Example

Time tracking should be implemented from the top down, especially if you're in an environment that is client-billable, like a law or consulting firm. Employees like to see their managers and leaders abiding by the same best practices and policies they're instructed to follow. If managers are tracking time, it may be easier for them to train employees based on their experience and results.

Best Practice No. 2: Train, Train, and then Train Employees Again

An executive coach once told me that, as a business owner or CEO, when you think you’ve told your team something, tell them three more times, if you really want the point to sink in. Time tracking is no different. Train employees to the point that they can do their tasks in their sleep, especially to avoid losing a good amount of money. Make sure they understand the software or system you're using and train them in various ways (i.e., demonstrations, videos, guides, and having them practice fake time sheets are four ways to train).

Best Practice No. 3: Make it as Automated as Possible

Technology offers numerous benefits. For example, our phones can log the quality of our sleep, our refrigerators can update to optimal temperatures, etc. Artificial intelligence (AI) and the Internet of Things (IoT) can be utilized to make our jobs easier. Have you tried assigning AI your most mundane tasks? The same goes for employee time tracking. Automated time tracking may save your team significant time through mobile punches, error-less timecards, digital data storage, etc., freeing up managers' time.

Best Practice No. 4: Be Decisive on Hourly vs Salaried Time Tracking

Change is constant and a fact of life, but why not minimize the change you have to manage? Managers can establish trust by keeping things as consistent as possible for their teams and should have a firm line on who and what positions track time and why. For example, if you are a law firm, your salaried and hourly people will log time because it's how clients are billed and how they are measured for performance. If you are a restaurant, you might not have your salaried workers log time since they are usually out on the floor of the restaurant doing eight things at once. Either way, come up with a policy for both hourly and salaried employees and the time tracking expectations for each.

Best Practice No. 5: Record Time Daily (Don’t Wait for Friday!)

Do you remember what you had for lunch on Monday (today is Thursday as I write this)? I sure don’t. If you can’t remember something like that, how can you or your employees remember what time they clocked in or out, or what hours should be timed for which customer, for an entire week? A best practice is to keep it simple and classic: Clock in when you settle into your desk for the day (as in, AFTER the coffee & bathroom run that takes 10 minutes) and clock out as you leave for the day. Do it every day.

Best Practice No. 6: Make the Categories Simple

Time tracking isn’t resume building -- no need for fluff. Save your team time and confusion by keeping things as straightforward as possible. Try categories like “Editing,” “Meetings,” and “Employee Trainings.” Keep it clear and consistent across projects, and make sure you keep the lines of communication open if a project is missing something; empower employees to ask if they feel another category is needed (versus them not tracking that time and you losing revenue!).

Best Practice No. 7: Have Everyone on the Same Tracking Schedule

If you’ve ever had a sibling, you know the chore lists must be shared and equal. All too easy to start a “wait but why” conversation if the best practice for one person looks different than the next. Set a schedule that makes business sense: If it’s expected that Team X track its time daily, make sure Team Y does too. If time sheets are locked for one group at 5 p.m. Friday, then they should be for all groups (unless there is a business case on why).

Best Practice No. 8: Assign a Time Checker/ Troubleshooter

Picture this: it’s Friday at 5:30 p.m., you really want to wrap up that project before the weekend starts, so you finish the work, hit send, close your laptop, and rush out the door toward sweet weekend freedom without thinking twice about your timer. Whoops. Have one person (this is usually an HR person, office manager, or executive assistant) who is in charge of making sure timesheets look “normal” and accurate, and who has the right EQ to chase down stragglers (and who knows when to escalate to their managers). This person can also function as the go-to for training new employees or if an employee needs a locked time sheet edited, which will alleviate even more headaches for you and your team.

Best Practice No. 9: Keep the Trust Alive

Trusting employees is hard, especially if you’ve been burned before by someone forging time. Know that strong policies, having a point person observing time sheets, and following our other best practices on this list will help keep your trust in your employees alive. For the 95% who are going to follow the rules, this trust is key to their happiness at your business and for you to have low employee turnover. After all, people leave managers, not companies. Make sure you have that trust for them in their time tracking, and they will reciprocate.

Best Practice No. 10: Use Your Time Data

Not sure if you need to hire or downsize? Use your time data to tell you the story. Need a client referral story on timing and budget? Your statistics can outline exactly how much time was spent on each task. If you track effectively, your time data can tell you pretty much anything you’ve wanted to know about where you and your employees actually spend their time. Data makes it easy to spot and correct inefficiencies, notice who adds the most value in each department, and inform strategic decisions about the future. Time data also can be an excellent source for marketing materials, like pitch decks and case studies, to show your company’s abilities and efficiencies.

Best Practice No. 11: Tie Activities & Tasks to Projects or Clients as Much as Possible

“Where does checking emails fall?” “What about the 30 minutes every morning I spend organizing my day?” These questions will be abundant among employees, and having answers in advance will help. Figure out what should be considered “internal” or “company” time, and make projects to track this time as well; then link as much as possible to projects or clients to get the most accurate billing. For example, if you are a recruiting firm, and you have a team member who has 50 emails from applicants for a position -- that should be tracked to the client and not as internal email tracking!

Best Practice No. 12: Encourage the Avoidance of Multitasking

If you are in a patient or client billable field, like a law firm or medical practice, you will want to discourage employees from multitasking so that billable time is completed accurately and efficiently. Have you ever sent an email to the wrong person? Embarrassing mistakes like these don’t happen when you’re fully focused. One thing at a time produces the best and most consistent results and leads to the most accurate billing from time tracking to your clients.

Best Practice No. 13: Set Time Tracking Goals for the Team

Everyone’s time sheets done accurately or early one week? Coffee on Monday on the house! Everyone compliant for a whole month? Lunch is on the boss! Think of fun incentives that get your team or teams into the spirit in a fun way, and promote the proper use of your time tracking system.

Hint: involve key employees and managers to figure out what would really get people going versus just assuming you, as the owner, CEO, or “big boss,” know!

Best Practice No. 14: Train, Train, and Train Your Managers Again to Ensure Consistency

Same as best practice No. 2 above on training employees, you will want to make sure your managers are also all on the same page as well. If Jimmy learns he can ask "Manager Molly" a question and then ask "Manager Mike" the same one and get two different answers, you’re going to have issues on your hands. Having the management team on the same page and having them be accountable to the policies and to the time “point person” will go a long way to avoid the “but I saw Jimmy doing it this way” problem.

Best Practice No. 15: Make Sure Everyone Understands Why You Time Track

Hint: it’s not just for payroll!

It’s human nature to feel that time tracking is management’s way of “watching you”. A lot of times though, it’s not! It’s management wanting some sort of data on where time is spent so that salespeople can better estimate scopes of work. It’s so that clients are billed accurately. It’s so that you can have a handle on your all-remote workforce since you aren’t in an office together. Whatever your company’s why (or multiple whys) is/are, convey them to your team and remember point No. 9 -- keep the trust alive!

Best Practice No. 16: Share the Data & It’s Uses with Employees

Consider this testimonial: Four Point Consulting is very proud of a lot of our time tracking data. We boast record rates for recruitment placements at very small fees, and we can do a lot of HR work in a little time. As the CEO of 4 Point, I share this data with my team because they should be proud of how good they are at their jobs. I also explain to management how to properly scope work for clients and for salespeople and how to sign contracts. It also is great for my marketing manager to continue to improve our website and sales collateral. Finally, I love the data because it ensures our finances are in order, it’s how we bill clients, and it can tell me if I need to be cognizant that we need to hire someone else. Data = power!

Best Practice No. 17: Be Careful About Tying Time to Performance

While people got gold stars for perfect attendance in grammar school, that should not be the case with time tracking in the “real world.” Tying time to performance could cause issues; i.e., what if an employee has a disability and thus requires more breaks to accommodate their condition? Thus, using time tracking as a component of performance could put you in hot legal water. Not worth it!

On the other hand, using time tracking for rewards that build team spirit can be a great idea. For example, Pit Team A in Customer Service versus Team B in Customer Service and see who is better at turning in their timecards on a timely basis. A little competition never hurt anyone!

Best Practice No. 18: Consider a Pilot Program (if you don’t already track time)

The classic saying line: “You should try it before you buy it” makes sense with employee time tracking if it would be a new policy. What is the management’s motivation? What will it do for your culture and does it align with your values? Do you have a clear idea of the policies you want around it and why? Have you communicated all of the above to your managers and team members? With any system, trying a pilot to make sure it’s a good fit is best practice for time tracking. This approach also allows the perk of being able to tweak any bugs prior to full rollout (which means fewer headaches for you in the future).

Best Practice No. 19: Have Clear Policies on What Should/Should Not Be Tracked

Piggybacking off of best practices 11 & 12, make sure everyone is clear on what tasks and time should and should not be tracked. For example, when I worked as an in-house HR rep. at a call center, a lot of workers would clock in and then go to the bathroom & get a cup of coffee, knowing that they could be idle for up to 10 minutes with the timer still running, much to the chagrin of the call center manager. So, he and I came up with a plan and policy to incentivize people to start their time after their coffee/ bathroom morning breaks. We openly and amply rewarded those who diligently followed the new policy. The good peer pressure worked, and, over time, all 80 employees refrained from wasting 10 minutes of payroll/company time every day (saving the company more than $100K annually!).

Best Practice No. 20: Lock Time Sheets

To avoid confusion or uncontrolled editing of time, locking time sheets at the end of a week or month is a best practice in order to get the most credible data and to have your accountant not go crazy (or your payroll person). Remember, you should assign a point person (No. 8 above) to be the one place to stop is a time sheet needs to be edited, and there should be a documentation process as to why for performance, tracking, or client purposes.

What have you found to be the most useful time tracking best practice from above, or do you have one we don’t list? Feel free to comment below!