What Is a Timesheet?
A timesheet is a system for employees and contractors to record the number of hours worked during a specific time period or the amount of time spent on a specific job. Timesheets are often used to calculate payroll. You can use a piece of paper, a spreadsheet, or cloud-based software to create a timesheet.
Having a good timesheet system helps every worker feels like their work matters and that they are fairly compensated. If you employ hourly employees or contractors, then a timesheet is probably your tool of choice for accurately recording time worked. And if you’re a freelancer, you probably use a timesheet when billing clients. Timesheets are usually used to process payroll, but even if you have salaried employees, timesheets can help you with business planning and resource allocation.
Learn about why timesheets are important, the different types, and access a free timesheet template that you can customize for your own small business.
Why Timesheets Are Important
Timesheets can be maintained in several ways. You can use traditional pen and paper, an online spreadsheet, or cloud-based software to record time and store timesheets. Regardless of medium, a timesheet system serves three primary purposes:
- Calculate payroll and other benefits: Most businesses use timesheets to have a basis for calculating payroll for hourly employees. You can also use a timesheet to record other time-based employee benefits, like sick leave and paid time off.
- Resource planning: Knowing how much time employees or contractors spend working on specific types of tasks lets you strategically channel your business’s resources in the future. You can use historical timesheets to send client estimates or plan around employee vacation times.
- Staff development: Knowing how much time different staff members spend on various projects lets you identify your star employees, as well as employees who need more coaching.
Even if your employees are all salaried, you can use timesheets to aid resource planning and staff development efforts. The very fact of implementing a timekeeping system can encourage employees to avoid internet browsing and social media, and stop other time-wasting activities while at work. That could be a big win for your business’s bottom line.
Types of Timesheets
– Little/no learning curve
– Prone to human error
– Paper sheets easily misplaced
Low-budget businesses with few employees
– Easily store and access previous timesheets
– Prone to human error (compared to automated software)
Small businesses that need a free digital time-tracking solution
Manual Time Tracking
– Easily store and access previous timesheets
– Standardize timekeeping with on- and off-site staff
– Prone to falsified information
– Employee may forget to take required action
Small businesses that want to track work activity of remote workers
Automated Timesheet Software
– Record more data (e.g., number of words typed and websites visited during shift)
– Integrates with payroll software
– Often includes employee scheduling tools for planning shifts
– Comparably expensive ($15 to $20 per user/month
– Employees may distrust software’s data collecting capabilities
Small businesses with the budget to invest in a one-stop, reliable, time tracking solution
Ask several small business owners about their timekeeping system, and each will probably describe something slightly different. Small businesses with few employees can get by with a pen-and-paper timesheet, whereas rapidly growing businesses with employees in different locations will need a more automated option.
As you can see from the above table, there are various types of templates. Below, we’ll explain each one in greater detail.
Paper timesheets are what businesses have used for generations. Employees write down the date, time in, time out, and what they worked on. If you’re entirely new to timekeeping and want something to start with, a paper timesheet is undoubtedly a better alternative to no timekeeping at all.
Online spreadsheets are a big step up from paper timesheets. Microsoft Excel and Google Sheets have built-in functionality to facilitate easy recording and create a standardized look to your timesheets. You can also easily change your timesheet reporting period with some copying/pasting.
Manual Time Tracking
Manual time tracking is actually misnamed. This is a digital option, but one that requires staff members to take some action to record time worked, such as turning an electronic timer on and off. This can work well for businesses with remote employees or employees out in the field (e.g., construction workers).
Automated Timesheet Software
Lastly, you can purchase timesheet or time tracking software to automate more of the process and increase accountability. With timesheet software, your employees still have to click a “start” and “stop” button, but there’s more accountability to the system.
For example, you can track detailed data, such as the number of keystrokes, website usage, and employees’ GPS locations. Timesheet software usually integrates with several payroll services to make payroll easier. Popular examples include TSheets, Harvest, and ClickTime.
Creating a timesheet form is simple and free when using free software, like Microsoft Office or Google Sheets. Here is an example of a weekly timesheet we created in Google Sheets:
Fortunately, you don’t have to form tables and create cell formulas from scratch. Microsoft’s template library stores free timesheet templates you can download and modify to your needs:
- General timesheet, Word
- Weekly timesheet, Excel
- General timesheet, Excel
- Employee timecard (daily, weekly, monthly, and yearly), Excel
- Weekly timesheet by client and project, Excel
- Biweekly timesheet with sick leave and vacation, Excel
Figuring out Your Timesheet Period
Once you figure out which timesheet medium you want to use, you’ll have to determine what time period you want to record for.
Many timesheets follow a semi-monthly format, but you can customize the template for daily, weekly, biweekly, or monthly usage by adding or removing blocks in your spreadsheet. You can also create project-based timesheets that help you track your billable hours—helpful for consultants, lawyers, and freelancers.
These are the common timesheet recording periods that small businesses use:
- Semi-monthly: Employees get paid twice per month on two specific days, such as the 15th day and last day of the month.
- Monthly: Employees get paid once per month, usually on the last day of the month.
- Weekly: Employees get paid once per week, usually every Friday.
- Biweekly: Employees get paid every two weeks on a specific day of the week, such as every other Friday.
- Daily: It’s very rare for employees to get paid daily, but even if you use a different payroll schedule, you can ask workers to record time on a daily basis.
- Per-project basis: Employees and contractors report the amount of time they spend on a specific task or project. This timesheet option works well if you’re a freelancer who needs to bill your client for a specific job or if you need to record billable hours.
Your timesheet schedule typically reflects your payroll schedule, but not always. For instance, you might pay employees semi-monthly but require daily timekeeping. This is quite common among small businesses because daily timesheets reduce human error. Employees can better remember how long and what they worked on today, versus trying to recall this information for the previous week or previous month.
Timesheet Best Practices
The details of your timekeeping process will vary based on which medium and recording period you choose. But there are universal timesheet best practices that you should observe:
Understand the Laws on Compensation and Time Off
The federal government doesn’t mandate businesses to provide paid vacation time, paid sick leave, or paid meal and rest breaks. The exception is that a rest break under 20 minutes is compensable time that is considered part of the employee’s workday. The federal government also requires businesses to pay nonexempt employees time and a half for overtime.
That said, many localities, such as New York City and Chicago, require businesses to provide a certain amount of sick leave. California requires employers to provide a 30-minute unpaid lunch break to employees who work more than five hours per day. Understanding your state’s and city’s laws will allow you to gather necessary information from your workers, such as start time, stop time, and “off the clock” meal and break time.
Make Timekeeping a Universal, Scheduled Activity
Whenever possible, bring all employees into the fold on time tracking. When managers don’t just tell reports to use timesheets but fill out timesheets themselves, it is much easier to get employees to comply and remember. To encourage employees to fill out their timesheets, carve out some time on their calendar each day or each week.
Make Time Tracking Fast and Easy
A quick and simple timesheet system will work out in the end for your small business. Employees won’t stick with something that takes too much time out of their already-busy day, so ensure that your time tracking system is user-friendly.
To simplify things, host timesheet training and make clear to employees that all time worked should go on the timesheet. A survey from AffinityLive showed that 35.8% of employees don’t track time spent reading and answering emails, and 20.6% don’t track time spent in meetings. Without a comprehensive look into how your employees are spending their time, timesheets become much less valuable.
To make your own life easier, make sure all employees are using the same format for date, times, and project codes. This will make it much easier for you to run reports and transfer timesheet data over to your payroll. Ultimately, setting up a sound timesheet system is a team effort. You need to implement a quick and easy solution that your employees can use without fail.
Timesheets might seem like a simple exercise in recording time worked, but used correctly, they are much more powerful than that. Timesheets can help you run error-proof payroll, efficiently allocate your business’s resources, and train and promote staff.
To get all those advantages, though, you need to find a timesheet solution that works for your company.
- CNBC.com. “How to Beat Productivity Killers at Work“
- Entrepreneur.com. “Do You Remember What You Did Last Tuesday? Neither Do Employees“
- DOL.gov. “Breaks and Meal Periods“
- DOL.gov. “Overtime Pay“
- NYC.gov. “Paid Safe and Sick Leave Laws FAQs“
- Chicago.gov. “Paid Sick Leave“
- CaLaborLaw.com. “California Meal Break and Rest Break Law (2020)“