Blog
July 25, 2024
What is a timesheet? A complete guide

Labor and payroll make up the majority of most organizations’ expenses, ranging anywhere from 50 to 70%. Consequently, accurately tracking employee hours is paramount when managing labor costs. Inaccurate timekeeping, time theft, and overtime can balloon expenses, and mistakes can lead to compliance problems and associated fines. Depending on your organization’s industry, time tracking is also critical for creating invoices and managing projects.
But because many firms still use paper timesheets, one person must gather these pages from all employees before manually entering the data to send to payroll. These steps—recording hours, collecting timesheets, and entering data—are all inefficient and error-prone.
Thankfully, paper and pen are not the only way to make timesheets. In this article, we’ll review the ins and outs of both analog and digital timesheets. We’ll cover how institutions can best use timesheets to increase efficiency and control costs. We’ll also touch on some essential features that every timesheet should have.
What is a timesheet?
A timesheet is a tool that organizations use to track employees’ hours worked. Typically, timesheets represent a log of when employees start and end their workdays. Depending on the organization’s industry and the employee’s role, timesheets may also detail what the employee accomplished during their day.
Historically, employees recorded this information on paper. However, digital spreadsheets or time clock software have become increasingly popular as firms look to incorporate automation and improve accuracy. Thanks to web and mobile time tracking apps, employees can note their hours regardless of their location. Employee time data then becomes visible immediately to employers and HR teams. Some timesheet solutions even send automatic alerts to managers when employees have almost reached their overtime threshold or are logging excessive hours. And finance teams can easily review timesheets to accurately bill clients.
Timesheets, whether recorded on paper, in spreadsheets, or through software, begin with time entry. An employee enters their hours each day into the timesheet and then submits it, usually at the end of the pay period. Managers or supervisors check the timesheet for accuracy and submit it to payroll. In some cases, accountants may review the timesheets to verify that the hours comply with labor laws and union collective bargaining agreements, especially for breaks, time off, and overtime.
Most timesheets comprise multiple data points:
- Employee information: This data may include the employee’s full name, employee ID, and job ID(s).
- Date range: These dates are typically the beginning and end of the pay period but may represent a week, month, or project.
- Project or task: Depending on the type of employee and their role, the employee may need to note the clients or projects they worked on and for how long. This requirement is common in service-based, professional industries like law and consulting.
- Comments or additional information: For certain types of projects, employees may need to add information about the progress they made or the status of their work.
Whether or not they’re on paper or a computer, most timesheets include similar information. However, the two mediums are not interchangeable, and paper timesheets in particular have clear limitations.
Paper vs. digital timesheets
Before the digital revolution, employees filled out timesheets manually, often on ledgers or punch cards. Today, most firms use digital timesheets, either as spreadsheets or through time tracking software. Upwards of 80% of organizations use a digital timesheet, such as time tracking applications, spreadsheets, touch screen kiosks, biometrics, or point of sale systems.
Some organizations have continued to use paper timesheets because software seems too expensive or complicated. However, digital timesheets and time tracking software reduce errors, increase reporting, and can integrate with scheduling and payroll tools. These advantages actually save companies money and reduce the manual, complex tasks previously associated with timekeeping.
Find out how time tracking software can save your organization time and money.
The benefits of using timesheets
Whether analog or digital, timesheets provide multiple benefits that can assist your entire organization. The gains are even greater with digital timesheets and purpose-built timesheet software. Most organizations see increased efficiency, stronger project management, and improved billing accuracy. All of these advantages can streamline operations while enhancing client relationships.
Greater efficiency
Timesheets provide transparency into how employees spend their time, revealing possible time sinks. For example, a manager might notice through timesheets that one employee is spending more time than expected on a task. In this instance, the employee can receive additional training and support. Timesheets might also highlight routine processes that take excessive time. Managers and leadership can then invest in solutions to automate this routine, time-consuming work. In both cases, teams can complete more work and waste less time.
The effort of collecting and entering timesheet data decreases when using digital timesheets. Timesheet software in particular simplifies this process by automatically centralizing timesheets. Accordingly, managers don’t have to ask each employee for their timesheet and manually enter time data every pay period.
Better project management
Creating and communicating project timelines is one of the hardest parts of project management. Project managers can use timesheets to gain visibility into how long tasks usually take and understand each project member’s capacity. When project managers know both a project’s full scope and the team’s pace, they can produce more accurate project estimates, which improve trust with stakeholders and client satisfaction. With timesheets, project managers can also highlight when projects are going over budget or are running behind.
Increased billing accuracy
Depending on your firm’s industry, timesheets may be a prerequisite to billing. Especially for institutions that bill hourly, invoices must include hourly breakdowns, so timesheets are imperative. Automating the timekeeping process with software can lead to higher precision, and integrating timekeeping software with billing can streamline the process further. Often, without an automated timekeeping system, employees may forget to track their time or inflate their hours, leading to billing inconsistencies that might hurt client relationships.
How do organizations use timesheets?
Because of their integral function in an organization, a variety of teams and departments use timesheets:
- Payroll: For hourly and non-exempt employees, timesheets are necessary to correctly calculate pay. Often, timesheet software will handle the complexities of time tracking, including exceptions management and compliance for breaks, time off, and overtime.
- Billing: For firms that bill hourly, organizations must list in detail the hours and work that employees completed. Timesheets provide this crucial hourly data to generate the invoice.
- Project management: Project managers need accurate time data to create project estimates and provide updates. Timesheet data enables project managers to track how much work the team has completed and approximate how much time the team will need to finish the project.
Even though time tracking software can simplify using timesheets across payroll, billing, and project management, the costs may still seem too high. Read our guidance from a 25-year payroll professional about how the benefits of time tracking software justify the expense.
Discover how TimeClock Plus saved countless hours each month for a 25-year payroll professional.
Must-have timesheet features
Regardless of format, all timesheets will include basic information about the employee and their hours worked. But when moving to timesheet software, organizations can run payroll, create invoices, and generate reports more quickly than with paper versions. To reach these operational goals, timesheets must have these features:
- Compatibility: Timesheet solutions should be interoperable with common operating systems and devices so that employees can log hours and tasks on any computer, phone, or tablet.
- Filtering: When analyzing timesheet data, users should be able to filter by date range, department, project, and client. These filters will allow HR teams to process payroll, managers to monitor employee performance, and finance teams to generate invoices.
- Reporting: Timesheets should help uncover actionable insights around strategic planning, hiring, and capacity. Any timesheet software should have built-in reporting capabilities—and integrate with your organization’s data analytics and reporting tools.
Get started with timesheet software
Timesheets are necessary when calculating pay, generating invoices, and managing projects. Therefore, it’s important to use timesheet solutions that can automate time tracking. Timesheet software calculates timesheets so managers don’t have to track down and collect every employee’s timesheet—and then enter the information manually into payroll or billing software.
TCP’s TimeClock Plus brings automation to timekeeping, exceptions management, scheduling, and job costing. Time tracking is seamless for employees when they can use an app on their device, a physical time clock, badge reader, or fingerprint scanner. TimeClock Plus integrates with your existing operations toolset, including scheduling and payroll, so that the whole process flows smoothly end to end. And with detailed reports, managers can better check for compliance gaps, manage exceptions, and approve overtime to enhance your organization’s time integrity.
Learn more about how timesheet software can help your bottom line or talk to an expert today to get started.
Top trending