Introduction
The same question looms for every business: Why is it always so hard to adhere to the plan?
Project managers (PMs) must meet routine deadlines to stay on budget, on spec, and on time. But more often than not, teams wind up overburdened, under-resourced, and way behind schedule. The same question looms for every business: Why is it always so hard to adhere to the plan?
One reason is the unknown. A good rule of thumb for new project managers is that there will be at least three big derailers for a project that could never have been expected at the outset. For example, leaders could encounter supply chain issues, loss of critical resources, or significant changes to scope midway through the initiative.
As businesses plan for the unknown, the socioeconomic landscape has also been a significant factor in recent years. Contingency plans have needed contingency plans.
Because of these variables, project managers must keep tight control of their operational metrics to stay profitable. To monitor those numbers, they must rely on accessing real-time, accurate data. That’s where time tracking comes in.
Common Introductory Questions
What is time tracking in project management?
Tracking time in project management is the process of capturing the number of hours teams spend on programs, projects, and tasks. This visibility helps leaders assess the accuracy of work estimates and the effectiveness of their employees.
Is time tracking critical to project management success?
Yes. Time tracking is critical to project management success because when PMs implement a time tracking policy, they are better able to do the following:
- Control costs: Monitor costs incurred by employees.
- Facilitate billing: Document every billable hour for invoicing.
- Adhere to timelines: Provide clear direction to ensure critical tasks are prioritized.
How does time tracking in project management software work?
In project management software, time-entry data is logged by employees to indicate the number of hours worked on a program, project, or task. These entries are often monitored in real-time to ensure projects are tracking toward their scheduled deliverables. The resulting data is helpful for forecasting, planning, and accounting purposes.
Methods of Tracking Time for Project Management
In project management, the benefits of tracking time are vast. When employees consistently log hours, leaders gain real-time insights into the health and sustainability of the business.
Accurate time-entry data is crucial because it can determine how much effort is placed into each project. It allows PMs to measure the project’s true cost and, ultimately, its profitability.
Over time, time-tracking methods have become more sophisticated and complex with every technological advancement. Below is a brief look at this fast progression:
Manual Timesheets
Paper Entries
The most basic method of tracking time is by creating handwritten paper entries. These are easily done, but the drawbacks are significant. Paper entries need to be stored in a physical location, scanned in order to be shared, and can be lost or damaged easily.
Excel Spreadsheets
Excel spreadsheets enable employees to manually enter time worked on projects and share them with managers. However, each time entry is still very much a manual task, and spreadsheets often become unwieldy. Reporting features are possible in Excel but often require complicated formulas and pivot tables.
Project-Based Timesheet Software
These platforms work well because they are scalable, streamline the timesheet approval process, and are typically based in the cloud, thereby offering vital security safeguards. Methods of logging time via software include the following:
Desktop Apps
Desktop apps are applications that run stand-alone on a computer. Organizations should determine whether employees need to access their timesheets from any location or if they should only be able to do so from their workstations.
Mobile Apps
With mobile apps, the main advantage is portability. Workers can log their hours in real-time from any location. In addition, they can easily upload receipts, log time worked down to the minute, and submit timesheets for approval.
Web-Based Logging
When timesheets are hosted in the cloud but are not accessible via a mobile app, workers can use a standard web browser to log in to their accounts to track their hours.
Common Timesheet Configurations for Project Management
It’s important for PMs to view their team’s hours in a variety of ways. While every business tracks time differently, the best time-tracking solutions allow for a high degree of customization to capture every relevant detail. The following are four levels of hierarchy commonly used in web-based time-tracking solutions:
Clients or Programs:
Tracking time to clients or programs is essential for large business efforts with a set of related projects and tasks. When robust project costing software is used, executives can quickly assess overall trends from a high level.
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Projects:
Tracking time to projects enables PMs to understand more detailed project progress and closely monitor in-flight costs to ensure they remain on budget.
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Tasks:
Logging hours to tasks allows PMs to view project progress with granularity. This data can help surface which projects are going over budget and which are tracking to plan. This information is valuable because it gives PMS time to intervene if course corrections are needed early.
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Employees:
PMs may also refer to an individual’s timesheet to assess their productivity and workload. If employees are paid by the hour, this is especially critical to ensure they are compensated correctly via Payroll, but it’s also beneficial to understand the hourly cost of each salaried employee.
Benefits of Time Tracking for Project Management
All projects are bound by a constraint triangle in which project quality is affected by the scope, cost, and time. As the project scope increases, extra time and resources will need to be added to maintain the quality of the project.
Keeping a close eye on scope creep and resource allocation will go a long way to ensure the team delivers on time and on budget. But to do so, it’s essential to have the right tool to monitor day-to-day progress.
When teams implement a time-tracking solution, they tend to understand in greater depth which projects and tasks use the most resources. This knowledge is beneficial for PMs who often need to understand the true cost of projects to determine their profitability. The following are eight common reasons why PMs find time tracking advantageous:
For Accurate Project Costing
During project execution, it’s imperative to track actual costs against forecasted costs and flag any variances. These variances may present as either overages or underages, but both are problematic.
For Budget Management
Any overages can quickly blow a budget. And while being under budget may initially sound positive, it can also indicate that the project isn’t progressing or hasn’t been properly scoped.
For Project Forecasting
PMs can refer back to a project’s historical labor cost data to create better timelines and budget estimates. PMs can also use this past data to help forecast potential profitability when considering new initiatives.
For Utilization Tracking
Time tracking also provides knowledge about utilization rates by determining what percentage of an employee’s time is billable. The higher the team’s utilization rate, the more profitable the company.
For Tracking Non-Billable Hours
Most employees will log non-billable hours at some point. While it’s expected that internal projects will result in non-billable time, occasionally, a spike in non-billable hours can also indicate that a project is being bogged down. When PMs can identify outliers in specific projects by way of an increase in unexpected non-billable hours, it can serve as a red flag to check in with their team.
For Uncovering Process Bottlenecks
Tracking time also serves as a highly effective way for PMs to understand where process bottlenecks occur in their workflow. Breaking down projects into specific tasks makes patterns and process gaps evident.
For Profitability Analysis
Profitability analysis is the process by which businesses decide whether a project is worth the time, effort, and resources that will be allocated. It’s also why businesses prioritize one project over another when multiple initiatives are vying for resources. Time entry data gives PMs a top-down view of all the resources and hours spent. This visibility provides a high-level vantage point for assessing project profitability.
For Team Management
In supportive work environments, PMs use time tracking to better understand how people work, how projects flow, and what they can do to facilitate the process. This may include changing management approaches, helping staff reduce context switching, and minimizing mundane tasks that lead to lost hours.
Time-Tracking Software for Project Managers
Once an organization has determined it’s in its best interest to implement time-tracking software, PMs should understand exactly which features on the market are going to be the most beneficial to the team. Consider software with the following functionality:
Job Estimation Tools
Job estimation features vary from simplistic to highly complex. Some of the best estimation tools easily allow PMs to set billing rates and compare actual costs to estimated costs.
Project Expense Tracking
Many time tracking platforms include expense tracking features. These features allow PMs to attribute expenses to an individual project easily.
Customizable Billing Rates
The more customized PMs can make their billing rates, the better. Look for software that allows leaders to set different billing rates based on the job, person, or activity. The best software solutions also allow managers to set exceptions based on people, clients, or tasks.
Mobile Time Entry
When employees can track work hours in real time, the data is always more accurate. If workers are on the go or in the field, mobile time-entry ensures they can track hours when the information is fresh in their minds. That’s why investing in a robust Mobile app can be a game-changer.
Robust Reporting Capabilities
Consider reporting capabilities before selecting a time-tracking platform. The best platforms will have entire Business Intelligence and Analytics tools embedded directly in the interface. Look for software that can also create custom reports scheduled to be sent via email. In addition, if the system can generate payroll exports, it will help facilitate the payroll process.
Resource Management
Right-sizing company resources to match incoming work is essential to success. PMs often need to forecast and schedule upcoming initiatives, and they can’t do so without understanding their team’s capacity limits. The best time-tracking platforms will have built-in Resource Management tools. These tools can help PMs predict staffing shortages, balance utilization rates, and proactively identify project bottlenecks.
Enhance Project Management by Tracking Time
For PMs to routinely complete projects on time and on budget, it’s necessary to use a robust time-tracking solution. The best solutions on the market provide real-time access to project progress, employee time entry data, and can be easily integrated within an organization’s existing tech stack.
When leaders have real-time access to operational metrics, they can understand project progression with granularity. Armed with this data, they make timely course corrections that protect profit margins and optimally position their business for success.
Time Tracking for Project Managers FAQs
What is a project time tracker?
A project time tracker is a tool that enables managers to measure and monitor their team’s progress as they execute tasks and use resources. It is a vital tool to keep projects on schedule and on budget.
What are the benefits for a project stopwatch?
Stopwatch timers provide a simple way to keep accurately timed entries–an enormous benefit to those who bill for professional and creative services, as well as those tracking time for non-profit services or budgeted grants.
How do you monitor work-in-progress (WIP)?
The best time tracking solutions allow you to attribute every hour employees work to the projects and tasks they are working on. This provides an accurate record of the cost and time spent on each initiative. When routinely monitored, this visibility allows for critical course correction should projects veer off course.
How do you measure project performance?
Project managers and executives should refer to their established Key Performance Indicators (KPIs) to gauge several different components. There are many different metrics to keep tabs on, but the following five are integral to any project success: gross margin, cost variance, schedule variance, resource utilization, and change of scope.
How can you record employee time?
When employees utilize a time entry platform, they have time entry tools at their disposal. The best time tracking platforms give employees multiple ways to log work hours to projects and tasks, manage time off accruals, and seamlessly integrate with any established systems.
