What is Time Tracking Software? A Guide for Beginners

Manual methods of timekeeping — such as classic paper timesheets, digital spreadsheets in Excel or Google Docs, and punch cards — make sense for business owners just starting out. These methods are free, easy, and simple. Unfortunately, they’re also inefficient and easily exploited.

Research has shown that the average worker is productive for only two hours and 53 minutes during an eight-hour shift. This means that the impulse to track your employees’ time is a sensible one to follow since knowing what your employees are doing on the clock can drastically influence how you operate. 

If Beth has a tendency to arrive late because of a long commute, maybe you can transfer her to a different store location. If Sam and Mike are noticeably more productive when working on construction jobs together, maybe you try to pair them more often on the schedule.

The more you know about what’s happening during scheduled hours, the more you can make informed decisions that benefit your team members as much as your business.

It’s important to note that timekeeping does not have to mean micromanagement. Employees don’t like managers constantly looking over their shoulders or having to pause progress in their work to, ironically, make progress reports.

But timekeeping doesn’t have to look like this. Instead, timekeeping can be as simple as employees clocking in with a single button. It can be as simple as their time spent on various tasks throughout the day, and even their breaks, being monitored automatically without disturbing their routine. It can be as simple as a streamlined process for tracking leave requests, allowing you to quickly approve and deny them.

It’s because of these features and more that many savvy business owners handle all their timekeeping needs through time-tracking software. In this post, we’ll break down why you should join them.

What is time-tracking software?

Time tracking software is any program that allows you to track how employee hours are spent. These tools can be made to function for individuals, teams, or entire businesses and often provide a higher level of insight into time usage and allocation over set time periods.

If this sounds simple, the truth is that they can be — to the benefit of both employees and employers — or they can be much more complicated. It all depends on what your specific usage of time-tracking software will be. 

How does time-tracking software work?

The way time-tracking software works depends on which platform you choose. Let’s look at the various ways in which you could track an employee’s time:

• Durational time tracking: Tracking how time is spent over a duration of time.
• Automatic time tracking: Tracking the amount of time spent on tasks and projects automatically throughout the workday.
• Chronological time tracking: Only tracking employees’ start and end times for tasks.
• Clock-in/out time tracking: Only monitoring when employees clock in and clock out for the day.
• Productivity tracking: Tracking the active and idle time of employees.
• Location-based time tracking: Tracking employee time based on locations.

Starting to see why we said time-tracking software can be incredibly simple or more complicated depending on your needs? While some timekeeping software will only specialize in one of these methods, the more adaptable programs will include multiple types of time tracking — or even all of them.

If you’re used to manual timekeeping, you might already feel a bit overwhelmed by the variety of options. But you shouldn’t feel intimidated by them; you should feel empowered. The best timekeeping software keeps things simple for you. 

Having different choices gives you flexibility to use a timekeeping tool in whatever manner works best for you. Use what you like, discard what you don’t. Understanding what you’re enabling or disabling is as difficult as it gets. 

Once features are toggled on, the best tools make many of their time-tracking options fully automatic. They’ll go unnoticed by you and your team members, but you’ll still reap the benefits of implementing them: more data and information to ensure your business is consistently building toward long-term success.

Time-tracking software is worth getting comfortable with because it will pay off your investment in dividends. 

What are the different types of time-tracking systems?

Let’s compare how time-tracking software matches up against other manual methods you can use to track time.

Manual time tracking systems

Manual timekeeping methods are the classic employee monitoring tools — what most business owners first jump to when they feel the inclination to try and optimize employee time. Think paper timesheets, time cards, and digital spreadsheets hosted on a singular computer or a shared Microsoft Excel or Google Doc.

Pros:

• This method of timekeeping is often either free or extremely cheap and allows for the use of templates so it’s easy to continue updating throughout the year. This makes them favored by small businesses.
• Manual timekeeping systems are often easy to use. Most are as simple as a few cells that employees fill out with their names and their information (clock-in/clock-out times, tasks worked, duration, etc.). 
• Employees have complete freedom to fill out their time information as they desire, which can be highly motivating.
• They’re intuitive enough for there to be no concern about training employees on how to use them, saving time and manpower.

Cons:

• Manual time-tracking methods are prone to human error. Experts have estimated that $7.4 billion USD is lost per day due to unrecorded work activities.
• They’re manipulatable. Let’s say you read an entry stating Bill arrived at exactly 8:58 a.m., two minutes before his shift started. How do you know that’s true? What if Jane got a text from Bill that he was running late so she agreed to sign him in while you weren’t looking?
• They have poor security. You have no option to really make them more secure. You could try to motivate your team members to keep each other honest or ensure all manual time entries were accurate by monitoring them yourself, but that would just hurt your own productivity.

Ultimately, while their simplicity is why business owners naturally gravitate towards manual timekeeping methods, it is this very same simplicity that makes them unreliable. When you’re building up your business, you want every tool that becomes part of your foundation to be as infallible as possible.

Physical time card systems

So maybe you want to graduate from using manual methods of time tracking. For many business owners, this means turning towards implementing physical time-tracking systems. These are manual punch clocks that your employees can use to clock in and clock out.

Pros:

• These tools are much more secure than your standard spreadsheets and handwritten paper time cards. The fact that many of these time clocks involve personalized input from your employees makes it harder for them to be cheated or manipulated.
• Human error is reduced by allowing these physical devices to record information such as time for punching in and punching out, breaks, department changes, tasks worked during shifts, and more.
• They’re more modern. Some of these devices allow for newer methods of clocking in, such as fingerprint scanning or even facial recognition.

Cons:

• What about your remote/off-site workers? These tools excel when it comes to tracking time at physical locations, but that’s completely useless for any remote workers you have on the team.
• They’re expensive. These tools can cost up to $2,000 per device, in addition to extra costs for maintenance or accessories. Some of them even have monthly charges on top of these pricey base fees! If you have multiple job sites, you’ll also have to look at purchasing multiple physical time clocks to place at each location. 
• These tools can still be gamed. If you’re just using the standard card reader version, an employee can make arrangements to have another team member swipe their card for them.
• Sanitation is a concern. The pandemic drastically increased awareness of cleanliness, and these tools come with natural concerns about everyone putting their hands and faces near the same device throughout the workday. 

While physical time clocks are a step up from manual methods of timekeeping, they have their own challenges and drawbacks to overcome before you consider implementing them in your workplace. The more your business expands, the more costly it can be.

Time tracking software

Lastly, we have time-tracking software. These apps can be quite varied in what they offer, but the general gist is the same: these tools can be placed on devices such as desktops, smartphones, or tablets and come with automated features to track time.

Pros:

• These tools come with many different features, user interfaces, workflows, and more, allowing you to pick an option that works best for your managerial style and employee preferences.
• These tools continue to evolve, as evidenced when many of them adding features to track remote employees like geofencing and GPS tracking. The ability for them to improve over time via updates is one of the main benefits of time-tracking software.
• These tools come with many automated features that will continue to monitor employees and enforce your attendance rules without requiring your constant attention.

Cons:

• Many time tracking solutions lock their more powerful features behind recurring payments, which can chafe business owners. However, they also tend to offer sensible discounts on these payments based on the number of employees you have, whether you’re paying monthly or yearly, or for certain package pricing. 
• If you’re moving from paper timesheets or a physical time clock to digital time-tracking software, you might find yourself initially overwhelmed by the options available to you. 

In general, the worst part about switching to using time-tracking software is the mental adjustment you have to make compared to other tools. However, once you get past that, you open up a wide world of employee management through time tracking and attendance, which can do wonders for any business.

The benefits of using time-tracking software

There are more than just a few reasons why business owners often make the switch to time-tracking software: 

• Time tracking software comes with features that make it easier to manage employees. For example, GPS tracking allows you to monitor the real-time location of employees working off-site. Notification features allow you to monitor major changes in the work schedule. 
• Through customizable reports and real-time data, time-tracking software provides a bird’s eye view of your business. Personalized insights for each and every employee enable you to make informed decisions when it comes to scheduling, project management, and task allocation. In other words, the path to greater profitability becomes easier to navigate.
• Unlike the other methods of timekeeping, time-tracking software is not limited by location. Many of these time trackers can be accessed via the web or as native apps for mobile devices, making them flexible and versatile. 
• Project time tracking means you can ensure accuracy not only when it comes to timelines, but also for invoicing your customers and clients. If anyone questions if you’ve noted down an accurate time spent on each project, you can easily produce the records.
• If time theft is a concern, these tools come with some of the same strong security measures you’ll see on physical time clocks, such as facial recognition.

There are even more benefits to using time-tracking software, but let’s see them in action rather than just talking about them. 

Let’s look at an imaginary employee of yours named John Doe.

John has been having a rough go of it. Road construction in his area has made commuting to work nearly impossible, and he’s also admitted he has personal issues in his life. So he asks you if he can work from home for a few days so long as he completes all his tasks in a timely manner.

You agree. 

Meanwhile, your other employees express a little concern after John fails to complete a task in the spreadsheet. How do you know John is really getting his work done?

It’s a good question. So you turn to your time tracking software and enable the GPS tracking feature.

Now, you know that despite John claiming to be at home, he’s really going out and around town and transporting his work laptop with him. 

Now you have enough insight to do something: call him in for a verbal warning, shoot him an email, or some other disciplinary method.

Now let’s take another possible scenario: an employee committing time theft while on the clock.

Let’s say you notice something isn’t quite adding up in your retail business. You know how long it tends to take your employees to restock the shelves before you open every morning, but it feels like someone’s been lagging behind. 

You arrive a little late every day — it can’t be helped with your long commute — so by the time you’re at the store, everyone else is already on their shift. When you check your physical card reading time clock, everyone’s logged as starting at or before 9 a.m.

Someone’s lying.

So you decide to upgrade to using time tracking software to hopefully get to the bottom of this. You set it up as a kiosk at the front of your office, much like the physical time clock, except this time you activate the facial recognition option.

Suddenly, now that you’ve got the facial recognition option enabled, the attendance records change. You discover that Edward has been arriving at work 20 minutes late. Edward usually handles the brunt of restocking work. 

The fact that the moment you improved your security methods you saw this discrepancy makes it incredibly likely that someone was helping Edward commit time theft. They were using his card in the time card reader and making it seem like he was present before he really was. 

Once you upped security, this was no longer possible, and his habitual tardiness was accurately reflected on the records.

Common features found in time-tracking software

GPS tracking and facial recognition mentioned in the scenarios above are just a few features that are commonly seen in time-tracking software. Here are a few more:

• Job codes: This option allows business owners to see how much time is being spent on different tasks and projects. Employees select a job code when clocking in and out, allowing the time clock to record how much they spent working on the task/project.
• Geofencing: With geofencing, you can create a customizable zone on a map that will only allow employees to track time once they’re within it. Business owners use this feature to exert control over off-site without having to constantly monitor their locations personally.
• PTO tracking: Time tracking encompasses more than just what your employees do while on the clock. Most time tracking software comes with an option to monitor paid time off as well, including logging common leave types, as well as creating custom ones.

The features included in time tracking apps tend to be a mix of automatic and thorough, so you can set and forget options that encourage better time management for your team members but also go into the software at any time and get a detailed overview of what’s happening at your company. 

How to choose the right time-tracking app for your team

Not only do many time-tracking tools come with a lot of options, but there are also a lot of options to choose from when deciding on a time-tracking tool! However, you can drastically narrow down the list to find the best time-tracking software for you by following these steps:

1. List out your priorities

Make sure your priorities and your team’s are taken into account. If you manage construction workers, a time-tracking tool with an emphasis on off-site monitoring, reliable service, and simplicity would make the most sense. 

If your team consists of less tech-savvy people, you’ll want simple features, a clean user interface, and a focus on automatic options that your team members don’t really have to worry about. 

2. Identify how easy the tool is to use 

You’ll want something that you and your employees can quickly adapt to, which means looking for a streamlined user interface, flexibility in the devices it can be used with, features that are simple to implement and interact with, and so on. 

You don’t want to get bogged down with training employees on how to use new technology only to later realize it’s not a great fit for you. How ironic would it be if you picked a time-tracking software that wasted your time?

3. Create a wishlist of features

We listed out a few of the most common ones in the previous section, but you can also either create your own ideal list or scroll through the features that different time-tracking tools offer and create a priority list. 

Maybe you want something that integrates with Asana and Slack. Maybe you want to bill clients via automation. If you have a team consisting of employees working on construction job sites or if you manage different retail stores across the state, remote time tracking options like GPS tracking and geofencing might be must-haves. 

Just know what you’re looking for ahead of time — it can get easy to be distracted by all the bells and whistles of less-ideal options.

4. Check how well the time-tracking app mixes with your current third-party tools

Many business owners have other apps that they’ve grown fond of using in the process of managing their company. Luckily, there are plenty of time-tracking tools that integrate directly with other popular apps. Make it a priority to see if a prospective tool can connect directly to apps you like.

For example, many business owners use apps like QuickBooks or ADP to help handle payroll. Luckily, these are among the most popular third-party payroll processing tools out there and are commonly listed among the integrations of time-tracking tools.

Alternatively, consider how well a time-tracking tool might replace your current third-party tools. Some time tracking tools are robust enough to expand their feature offerings to the point where they can offer the same functions many third-party tools do, enabling you to centralize all of your workforce management tools in one app.

In fact, if that’s what you’re looking for in a time-tracking tool, you may want to consider trying our very own Buddy Punch.

How Buddy Punch can help you track employee time

There’s a reason we took the time to create this guide. Frankly, it’s the sort of information we wish was out there when we first started looking into using time-tracking software to manage our businesses.

Back then, we relied solely on manual timekeeping methods, which made it a struggle to monitor 20 employees at three different locations. Expanding our initially small team was the start of our journey with understanding timekeeping and how it impacts a business’s bottom line. 

Our focus was on removing any bottlenecks caused by relying on manual methods. It was time-consuming to look at how to streamline workflows and encourage greater employee productivity so we could continue to grow.

Unfortunately, options back then were sparse. Whether we looked at automated time-tracking tools or even project management software, we found that none of our choices seemed to have the mix of features we desired without being too complicated for our employees. So rather than stewing in disappointment, we set off to build our very own software, and Buddy Punch was born.

All this to say: we know the pain of spending hours sifting through employee timesheets hoping they’re free of errors, of wondering what your team members that are working from a distance are accomplishing, of having a sinking feeling that an employee or two might be stealing time from the company by coming in late or taking extended breaks.

That’s why we made sure Buddy Punch would be able to solve these time-tracking issues and more.

Simple clocking in and out

Buddy Punch makes it easy for your employees to immediately start logging time, even in one click. This intuitive design is perfect for business owners who don’t want to bother less tech-savvy employees with learning the ins and outs of new software. For your team members, Buddy Punch can be as quick and easy as a few clicks at the start and end of a shift. 

Facial recognition

Thanks to Buddy Punch’s usage of Face ID, you can clamp down on time theft through the use of the facial recognition feature. Whenever an employee wants to clock in, they’ll be prompted to show their face, which can then be checked against the screenshot in Buddy Punch’s records. You’ll never have to worry about one employee buddy punching for another with this enabled.

GPS tracking and geofencing

These two features are the most effective options for tracking remote employees, and Buddy Punch offers them both.

GPS tracking allows you to always check the real-time locations of employees while they’re on the clock (while being disabled once they clock out to maintain privacy). 

Meanwhile, geofencing lets you set a custom radius on an interactive map, only allowing employees to start time tracking once they’re within this designated area. 

Both options are great for managing remote employees working from home, operating at different business locations, or away on remote job sites.

Drag-and-drop scheduling

Buddy Punch isn’t just time-tracking software; it’s also an attendance solution. We make it easy for you to schedule your employees through our drag-and-drop feature. Simply click on an empty cell in the interface to create a new shift, then place it as desired to build your schedule.

Notifications

Buddy Punch’s notifications option improves time tracking both directly and indirectly. Directly, it keeps employees aware of changes in their work schedule and can even notify employees when you’ve built a schedule so they’re aware of when they’re expected to work. 

Indirectly, the existence of notifications means employees can knuckle down and focus on their work, remaining secure that if something happens that needs their attention, they’ll be notified.

PTO tracking

Buddy Punch offers a host of options when it comes to managing paid time off for your employees. You can use our built-in PTO types or create custom ones at will. Whenever your employees send in a leave request, you’ll receive a notification for you or your administrators to approve or deny it. 

You can also empower employees to directly put their vacation time, sick leave, or personal leave on their time cards — or take it to the furthest possible step and let them be auto-approved for any requested paid leave.

Overtime calculations

Buddy Punch has an overtime calculations feature that allows you to select from 12+ overtime types to determine how overtime pay is to be calculated, all on a per-employee basis. This comes in an easy-to-read format that reduces payroll errors and saves time. 

Customizable reports

The best part of all the real-time data that Buddy Punch monitors is that you can access these metrics at any time to get a deeper look at your business operations. 

Payroll exports (hours, overtime, locations, departments), hours summaries (total billable hours at any given time), PTO summaries, and other types of work time reports are available on demand. Export these detailed reports in PDF, Excel, or CSV format based on your preferences.

Built-in payroll

Used to using a third-party program for payroll processing? While Buddy Punch offers payroll integrations with many popular programs, the built-in payroll feature takes things a step further and allows you to use a single tool for all things employee management. 

Easily manage your payroll from anywhere at any time using automatic payroll tax filings and payments, unlimited payroll runs, integrated timesheets, and more. 

You can rest assured that all your employee and company data remains on one secure platform as you streamline your business operations.

Additional features

While this covers the highlights, there are still many more features you can make use of when you turn to Buddy Punch for your employee time tracking, scheduling, and payroll needs. Click here to view the full list of features.

Making the switch to Buddy Punch is simple. You can manually add employees by entering their names, an email address, and username and password. Alternatively, you can let our customer support team handle the onboarding process on your behalf. Learn more about that process here. 

Buddy Punch is accessible via the web or through native mobile apps, meaning it works on Windows and Apple Desktops, iOS and Android smartphones, and tablets. No matter how you access it, you know you’re getting a user-friendly interface and simplicity in features, so any employee, regardless of their aptitude with technology, can use it.

Want to learn more about Buddy Punch? Start a free trial — no credit card required — take an interactive tour of the product, or request a personalized demo.

Time tracking is a versatile process. It can be as simple as you make it and as effective as you’re willing to allow it to be. 

That’s why we encourage business owners to pick the time-tracking method that has the most pros, the least cons, and the largest ability to grow alongside their business for the foreseeable future.