Why tracking time on timesheets hurts your business: 10 reasons

1. Inefficiency

Filling in timesheets, then transferring and calculating them in Excel costs you a lot of time. It gets especially tedious when the same details have to be entered over and over again – the job number of a project, for example. Instead of the end of shift, long evenings in the office are guaranteed.

But you as the employer are not the only one losing valuable time to timesheets and Excel. Your employees' working hours are not put to best use either. The minutes they spend on their timesheets every day could just as well go into their actual tasks. Manual time tracking creates an unnecessarily high administrative burden on both sides.

Digital time tracking gives you that time back. Use our free checklist to find out whether your business is ready to work more efficiently.

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2. Lack of overview

At the end of the month, even smaller businesses quickly end up with dozens or hundreds of timesheets on the desk. Finding an overview in this paperwork chaos is hard – keeping it is harder still.

Benjamin Pape, owner of Hausmeister Ben’s Service, describes how confusing this can get in practice, looking back at the time before the switch to digital time tracking:

“We wrote a slip of paper for every job … at times it was simply unsolvable. All you could really do was tip the folders out and sort them all over again.” – Benjamin Pape, Owner & Managing Director, Hausmeister Ben’s Service

3. Inaccuracy

Manual time tracking is inaccurate. Sources of error are everywhere:

• When writing their working hours onto the timesheet, employees often round the start and end of the working day.
• Timesheets can get lost.
• Illegible handwriting can distort the recorded data.
• Mistakes creep into Excel calculations easily – through misapplied or faulty formulas, for example.

The result: your payroll and customer invoices are based on unreliable data.

4. Financial losses

When business-critical calculations run on the wrong data, financial losses follow quickly. Rounded working hours can mean you pay out too much in wages, or a mistake in the calculation means you charge the customer less than your business is entitled to based on the hours actually worked. The time timesheets take only makes the problem bigger. Time is money, and administrative time is badly invested if the right tool could automate it.

5. No way to optimise processes

As an employer, you only see how much time went into a project at the very end. Once the project is finished, you add up the hours on the timesheets. That leaves no way to see, while the work is still running, how much of the planned hours has been used up. The actual effort can quickly exceed the planned one. The result: unhappy customers, higher costs and stressed employees.

6. Falling short of legal requirements

Following the ruling by the European Court of Justice, all businesses will soon have to record their employees' working hours systematically. Every employer can decide for themselves what the working time tracking system looks like in detail. But the Court requires the recorded working hours to be reliable and objective. These criteria already apply when existing time tracking systems are assessed.

• Objectivity: The start, end and duration of the daily working hours must be documented, and the times must not be estimated. Both employers and employees must know about the record.
• Reliability: The recorded working hours must be protected against manipulation, so that clear evidence is available in the event of a legal dispute.
• Accessibility: Employers and employees must be informed about the start and end of working hours. Both parties must be able to access the recorded hours at any time and independently of each other – and so must the works council and the supervisory authorities.

Given the potential for error built into timesheets and Excel spreadsheets, it is questionable whether these methods meet the requirements. It is better to prepare now – before the ruling is turned into a German time tracking law – and to put digital time tracking in place.

7. Lack of transparency

Timesheets and Excel spreadsheets sit with either the employer or the employees. The other party therefore has no insight into the records. That raises the risk of manipulation and breach of trust – and of unintended health risks, when overtime goes unnoticed and is never compensated.

8. Weak competitiveness

The time you and your employees spend on timesheets and Excel spreadsheets could have gone into developing new products or improving the existing range. Unnecessary effort is the enemy of innovation. The competition never sleeps. They show their working hours to customers, automate routine processes and free up new capacity for those customers. Businesses that do not take that chance risk losing customers – and feeding the profit and growth of their competitors. That threatens the long-term future of the business.

9. An unattractive employer image

Generation Z is pouring into the labour market. Raised as digital natives, they spend their free time on Instagram and TikTok, place Amazon orders with one click and are happy to learn new tools. These talents bring that expectation of digitalization to their employer as well.

Young applicants want a digital, forward-looking employer. Businesses where they have to write timesheets and hand in vacation requests on paper end up far down the preference list. That is a problem above all against the backdrop of the skilled labor shortage. Anyone who fails to win and keep qualified employees will go under in the long run.

10. Holding back New Work

Businesses in which employees record their working hours on timesheets shut themselves off from the transformation of the labour market. That market calls for flexible working models that give employees more freedom and independence. It starts with the option to work from home and goes all the way to choosing working hours and place of work individually. New structures need new methods. In the age of New Work, timesheets count as outdated.

How modern employers record employee hours: the digital time clock

The digital time clock is the modern way to record working hours. It is software in which employees log in at the start of the working day and log out at the end. Break time tracking takes a single click – or the times are deducted automatically. Travel time can be booked just as easily, and vacation requests submitted straight from the app. The recorded working hours are stored centrally on a server. There, employers and employees can view them at any time and move them into customer invoices and payroll through integrations. That puts a decisive end to the paperwork chaos.

Timesheets are not an option for SMEs either

Small businesses with few employees have to spread thin resources carefully. Big structural changes easily get lost in day-to-day work, because employers fear the effort and stick for years to the path they first took. The result: the business is still working with timesheets while the competition moves to paperless offices or has already made the change.

It is understandable that busy SMEs have to prioritise tasks in their day-to-day work. Still, it pays to invest time in researching and choosing digital time tracking in order to save time afterwards. And introducing a digital time tracking system is not as demanding as many employees fear:

1. Start a free trial and set the system up.
2. Bring in a small team to support you, involve them closely in the free trial and ask them for feedback. If you use a larger plan, you can test all the features step by step.
3. After the free trial, you can move seamlessly into regular use of the software and extend it to all employees.

More tips and information on what digital time tracking should offer a small business can be found in our blog post: Digital time tracking for small businesses: why it pays off, how it works and what to look out for.

Tradition is no excuse for skipping digitalization

Long-established companies, too, often keep fixed structures and processes in place for a long time. But it is important to reflect on them: are these strategies really effective? Are there better alternatives? A close analysis makes the room for action clearly visible. Tradition and modernity are not mutually exclusive – they can complement each other well.

Conclusion: timesheets are outdated

In a fast-changing labour market, digitalization is becoming a necessity rather than a choice. Businesses that hold on to outdated methods such as timesheets get overtaken by the competition and fall behind.

It is time to rethink. Digital time tracking is a simple way to automate routine processes and to save time and money that is then free for growing the business. With the future time tracking law in mind, it is important to look at different systems now.

With clockin you can record your employees' working hours via app, in the browser or on a tablet. Because tracking works on all devices, regardless of location , employees working from home can access it without any trouble and never have to hand in timesheets after the fact.

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