The 10 Biggest Benefits of Time Tracking Software

A recent survey on employee theft found that 24% of workers have committed time theft by claiming they worked more hours than they did, taking longer breaks than are allowed, or asking another employee to clock in or out for them. 

These employees were adding 4.5 hours that they didn’t work to their timecards each week.

Think about that for a moment. If your business has 20 employees, a fourth of those employees (five total) are billing you for an extra 4.5 hours per week, and they’re all making $10 per hour, you’re losing $11,700 each year to time theft.

Time tracking software prevents these types of time theft, potentially saving you thousands of dollars annually. It also saves you money by significantly reducing the amount of time it takes to run payroll. And for some businesses, it even makes you more money by improving the accuracy of time tracked toward client projects.

In this post, we’re going to take a look at the 10 main benefits of time tracking software for employers running all different types of businesses.

1. Time tracking software prevents time theft

It’s easy to steal time where there are no measures in place to prevent it. Just write down whatever time you want to get paid for on a paper timesheet, have a coworker punch you in when you’re running late, or take a 45-minute lunch because the boss isn’t on-site to notice. 

Time clock software like Buddy Punch gives you tools that make it impossible for employees to commit these types of time theft:

• Get rid of paper timesheets and track when employees clock in and out down to the second. Employees can clock in and out on their computers, mobile phones, or using a tablet you set up as a central time clock kiosk for all employees to use.
• Set up geofences or IP address locks to prevent employees from clocking in and out when they’re not on site. Geofences are great for employees who work in the field, while IP address locks are perfect for office workers.
• Use GPS tracking to validate that field workers were where they were supposed to be when they clocked in and out, or turn on real-time GPS tracking to make sure that traveling employees weren’t out running errands while they were on the clock.
• Use photos on punch or facial recognition to catch and prevent buddy punching. With photos on punch, employees have to take a selfie every time they clock in and out, and those photos are added to their time cards. With facial recognition, employees can’t clock in or out unless their identities are able to be verified by Face ID.

2. Time tracking software significantly reduces the amount of time it takes to run payroll

If you’re using paper timesheets or punch cards to track employee hours, you’re likely spending hours every pay period manually calculating work hours for payroll. You have to add up all hours, convert minutes into decimals, identify overtime hours, and then calculate total wages.

It’s a time-consuming process that’s prone to error. Fixing those errors takes up more of your time, employee morale decreases when they’re not paid properly, and unnoticed payroll errors put you at risk of violating FLSA regulations.

Buddy Punch has several features that let you run payroll faster than ever before:

• All clock in and out data is converted into timesheets and available in detailed time tracking reports with total hours calculated for you automatically.
• Overtime tracking automatically identifies overtime hours based on the policies you select, which allows Buddy Punch to accurately calculate overtime pay for you.
• You can download your timesheet reports as Excel or CSV files that are already formatted for your existing payroll provider.
• If you don’t want to mess with downloading and uploading CSVs, Buddy Punch integrates directly with several payroll providers like QuickBooks, ADP, Gusto, and more.
• You can also use Buddy Punch as your payroll provider to run payroll in just a few clicks. Buddy Punch offers an optional payroll processing feature.

3. Time tracking software makes your payroll more accurate

By recording the exact number of hours employees worked, preventing time theft, and automatically calculating total regular hours, overtime hours, and wages for you, time tracking software significantly improves the accuracy of your payroll — no more having to redo payroll because of a typo or miscalculation.

Another way to improve the accuracy of your payroll is to have managers approve their employees’ timesheets before you run payroll. This is another feature available in Buddy Punch, and it helps prevent payroll mistakes because managers can catch issues like an employee who forgot to clock in or out for a shift.

4. Time tracking software helps you bill clients for every second you spend on their projects

In addition to tracking employee time overall, most time tracking apps have features that let employees track their time toward specific clients, projects, jobs, or tasks. This ensures that you’re paying employees properly for the time that they work and invoicing your customers for the exact amount of time they owe you for.

Buddy Punch offers a job costing feature that lets you create codes for different jobs and projects that employees can select when they clock in. And if they’re working on multiple projects over the course of the day, they can simply select a new job code to stop tracking time toward one project and start tracking time toward another.

For businesses with more complex client operations, such as agencies and other professional services businesses, there are time tracking apps like Paymo, Harvest, and BigTime that offer additional features like client invoicing, billable and non-billable hours tracking, and integrations with project management software.

5. Time tracking software helps you create more accurate budgets and estimates

The data you gather from tracking time on tasks and projects can give you a better understanding of how long specific tasks/projects take to complete, which can help you create more realistic budgets and estimates for future projects.

Some time tracking software, like BigTime, Scoro, and Productive, even offer features that help you plan and monitor your project budgets. They can use AI to predict how much time it’s going to take your team to complete a project based on historical data or send you notifications when a project’s budget is at risk of overrunning.   

6. Time tracking software keeps you compliant with federal and state laws

Time clock software ensures you’re always compliant with both FLSA regulations and individual state laws. For example, all apps will automatically identify overtime hours for you based on your specific overtime policies, and most will keep records of your timesheet data for the two years required by the FLSA (note that some free time clock apps do not keep records for you).

Additionally, tools like Buddy Punch come with break time tracking features that help you stay compliant with state meal and rest break laws. You can use our employee scheduling feature to schedule employees for their breaks, or you can set up break rules that automatically notify employees when it’s time to take a break that’s required by law (e.g., after four hours of work).

And if employees have a hard time remembering to clock out and back in for their breaks, you can use automatic break rules. With automatic breaks set up, you simply specify how long a break should be and whether it’s paid or unpaid, and Buddy Punch will automatically remove unpaid break times from employees’ timesheets — no clocking in and out required.

7. Time tracking software can help you improve productivity

If your employees do most or all of their work on computers, timesheet software that comes with productivity monitoring features can also help you prevent time theft by identifying when employees are billing time but not doing any work. 

Tools like Hubstaff, DeskTime, and Insightful have features like: 

• Idle detection: Identify when an employee is billing time but not doing work.
• App and URL tracking: See what apps and websites employees are using when they’re working to identify time spent on personal projects or time-wasting websites.
• Automatic screenshots: Take screenshots of employees’ computer screens at specific intervals while they’re working so you can see what they are doing.

In addition to helping you identify employees who are stealing time, some of these apps can also help you benchmark your business’s productivity against other companies in your industry.

8. Time tracking software can reduce your labor costs

There are many ways that time tracking software helps businesses reduce their labor costs. Employees can clock in and out from anywhere they work; they don’t have to waste time driving to the office to punch in/out or pick up paper timesheets. Additionally, having managers approve timesheets means you’re more likely to identify instances where employees forgot to clock out.

Apps like Buddy Punch also have other features built in that help businesses reduce labor costs and prevent unexpected expenses:

• Use punch limiting to block employees from clocking in before their shift starts. This prevents employees from accruing extra hours by picking up a few minutes here and there.
• Use automatic clock outs to automatically clock employees out at the end of their shifts. This reduces the likelihood that you’ll pay an employee for hours they didn’t work because they forgot to clock out at the end of the day.
• Set up overtime alerts to get an email or push notification when an employee is nearing overtime so you can shift their schedule and avoid paying expensive overtime rates.

9. Time tracking software can help with other aspects of workforce management

In addition to time tracking, most clock in and out apps come with tools and features that improve other aspects of how you run your business. For example, in Buddy Punch, in addition to all of the time tracking features discussed above, you can also:

• Create employee schedules: Create schedules quickly and easily with our drag-and-drop employee scheduling feature. Set up repeating shifts, schedule employees to work in specific roles and locations, and allow employees to organize their own shift trades and covers that you can review and approve.
• Track PTO: With time off tracking, you can set up accrual rules, and Buddy Punch will automatically calculate earned time off for you. Employees can see their earned PTO at any time in the app and make PTO requests that managers can review and approve. Approved time off is automatically added to employees’ timesheets.
• Attendance tracking: Buddy Punch is also attendance tracking software. Get notifications when employees clock in late, clock out early, or miss a shift, and download reports showing all employees with attendance infractions during a specific timeframe. 

Time tracking software like Connecteam and Homebase also come with team communication features that let your team message each other in real-time. And some all-in-one HR apps like BambooHR and Justworks offer time tracking as part of a complete suite of tools that also includes hiring, benefits administration, and talent management features.

10. Time tracking software creates a better employee experience

Time tracking software isn’t just for employers. It benefits your team, too.

When employees have access to a simple, transparent system for tracking their hours, it eliminates a lot of the friction that can come with traditional timekeeping. They don’t have to guess how much time they’ve worked or worry about mistakes on their timesheets. They can log their hours from anywhere, see their time entries in real time, and get alerts if they forget to clock in or out.

They also gain visibility into their schedules, PTO balances, and pay periods — all from one place. If they need time off, they can submit a request in a few clicks. If they want to swap a shift, they can do it without sending a string of emails or texts. This leads to less confusion, fewer disputes, and a smoother day-to-day experience for everyone.

For your business, that means fewer payroll errors, less time spent chasing down timesheet corrections, and higher employee satisfaction. When people trust the system and know they’re being paid correctly for their time, morale and retention improve.

The bottom line: Time tracking software helps you protect your business and create a better work environment for your team. It’s a practical upgrade that pays off in time saved, money earned, and people retained.