The Hidden Impact of Inaccurate Time Tracking

According to recent data, inaccurate time tracking costs professional service firms more than $60K per year per employee, yet it’s not easy to discover. Missed projects, delayed projects, poor task outcomes, attrition, issues with efficiency and productivity, or quality issues — the problem manifests in various ways and yet organizations find it challenging to see discrepancies with time-tracking data as the reason behind these.

The top-performing professional services firms have a utilization rate 14% higher than average, according to SPI research, resulting in millions of additional annual revenues. However, as organizations aim to improve their productivity and profitability levels, they often face stumbling blocks in the form of missed billable hours and lower employee utilization.

How Inaccurate Time Tracking Affects Your Organization

Financial Implications

At a simpler level, inaccurate time tracking can result in time theft. Also, not meeting labor laws and regulations at any level can result in heavy penalties. For example, not tracking overtime hours properly can result in over or underpayment to the employees, which can create legal issues. Another serious issue can be regarding improper client billing due to missed or incorrect time entries.

Misallocated Resources

The success of a project depends heavily on the skilled resources employed. In the absence of a proper time tracking system, there’s poor visibility into the availability of resources, their schedules and management of their tasks, which can cause delays and derail the project from its planned track.

Take, for example, a consulting organization that provides services for a project but doesn’t track time properly. It means that some consultants could be overworking on the project while others may be underutilized, impacting overall productivity and resulting in poorer project outcomes.

Missed Opportunities

Forecasting and planning are important for an organization to make the best use of any opportunity. The lack of time intelligence can severely affect this as organizations don’t have access to the relevant data points for strategic decision making.

To counter this, project-based businesses and professional services organizations are now adopting AI-based time-tracking tools that offer predictive analytics to understand the time and budget required for specific tasks and even entire projects.

Damaged Client Relationships

Recent studies have shown that nearly 60% of consultants use hourly or project rates. It’s still the preferred method for billing in many other industries. But billing for this and other methods requires a high level of granularity and transparency into tasks, skills, and billable vs. non-billable hours.

Inaccurate project costing and billing, and delays in invoicing can severely impact client relationships. These issues mostly arise due to a lack of accurate time tracking and process automation.

Employee Dissatisfaction

When organizations don’t track employee time properly, they have several blind spots regarding where employees are spending their time and which employees are working the most or least. This situation can give rise to employee burnout for some while reducing accountability for others. Eventually, it can also impact employee performance evaluations, causing a high level of dissatisfaction.

Time tracking inaccuracies, due to a manual process or otherwise, can also lead to inaccurate payroll calculations and delays in salary or wage disbursement, creating ongoing frustration among employees.

In extreme cases, these factors eventually result in high employee turnover.

Compromised Project Management

Time, task and budget management are the cornerstones of successful project delivery. Without proper visibility into these, it can be difficult for your organization to track projects, understand scope creeps and prevent projects from being derailed. Having multiple sources of information where data can be missed or not represented properly can lead to such complications.

Decreased Productivity & Inefficient Operations

Tracking the workforce in the office is cumbersome enough, but what organizations have to face today in terms of tracking their mix, i.e., mobile and remote workforce operating from various locations and time zones, is downright challenging. The lack of transparency in this area means that inefficiency can hit operations.

There can be redundant tasks or processes that the employees follow, creating no tangible output. In the absence of real-time visibility in work time data, proper direction and eventually strategic corrective actions, productivity issues can crop up.

Compliance Issues

Labor law and regulations vary across jurisdictions and industries, where specific rules apply to working hours, overtime hours and even breaks. Issues with payment amounts and timelines, misclassification of workers and other violations can often land organizations in trouble. A proper time-tracking system that provides accurate data can not only help support compliance measures but also provide comprehensive audit trails for legal issues, should these arise.

Organizations have to bear the cost of poor time tracking not just in monetary terms but also through reputational damage. That’s why they are trying to identify the gaps and issues that arise due to improper tracking mechanisms, for example, having employees remember the tasks they did during their workday and workweek, and manually entering this data in a spreadsheet doesn’t guarantee any accuracy.

The Challenges of Manual Time Tracking

At the root of these challenges lies the inability of manual and legacy systems to accurately capture the time that employees spend on each project. Employees often struggle with error-prone, manual approaches to filling out and managing their timesheets. In addition, the widespread adoption of hybrid work models has resulted in the proliferation of digital apps for work.

As a result, the time that employees spend on different apps has to be tracked manually making it difficult to capture work time data.

Employee Resistance

Manually entering work time data can be cumbersome and time-consuming for employees, which is why it faces a lot of resistance. It results in missed entries or inaccurate entries done at one go when employees want to save time or get over with the whole process. That said, even though it’s simpler, smarter and easier, automated time tracking can also face resistance if organizations don’t implement the system correctly.

Inaccurate Data Entry

As discussed above, due to the difficulty in creating time entries, employees can end up making mistakes. Also, not just the entry but the loss of data, if not backed up properly or due to connectivity issues, can result in inaccurate entries that don’t present the correct picture for employers or clients.

With ever-changing labor and wage regulations, tracking and updating the pay rules for various employee types and roles in a manual system can be very complicated.

Multiple, Disparate Time-tracking Systems

Many organizations have several systems for time tracking, project management, attendance management, task management and so on. As a result, information is not entered accurately or in a timely manner. These systems have their own datasets and can also be incompatible with each other, creating several data sources that don’t help provide a single source of truth or help make strategic decisions.

Issues with Scalability & Mobility

As an organization grows, the number of employees increases, and so does the workflow complexity and diversity. So, its time-tracking solutions should be scaled up to ensure seamless operations. Otherwise, migrating from one solution to another over time can disrupt operations, create data gaps and cause employee dissatisfaction as well. What an organization needs is a scalable solution that’s efficient, adapts easily and is built for the future to avoid facing this challenge.

Advancing Technologies

With rapid technological advancements every passing year, it’s a constant struggle to keep up with digital transformation needs. For modern organizations, this means updating their legacy systems, onboarding new software platforms or digital apps and ensuring that their current systems integrate well with the new platforms without any data loss that could impact their decision-making processes.

Lack of Real-time Updates

As business leaders find it difficult to get granular insights into work time data in real time from manual time tracking, they often struggle to optimize resource utilization. The resulting decision delays can cost organizations dearly in terms of productivity, profitability, customer delight, and brand reputation.

While time-tracking automation is being increasingly adopted due to the many benefits it offers to overcome all the challenges that we’ve discussed above, it’s not enough to just automate this process. An increasingly competitive business environment means that organizations, especially project-based ones, have to shift towards a more advanced platform that can work autonomously for them and help them cut costs while doing so.

Enter AI time tracking. Let’s understand in detail how it helps.

Why do you Need AI-powered Time Tracking?

• To handle complex work environments including mobile, remote, hybrid setups and various job types and payment systems.
• To simplify data capture. Instead of employees trying to understand what and how to record or overreport/underreport work hours, AI can help automatically map the details to save time that can be spent on tasks that provide more business value.
• Once trained, AI-powered time-tracking systems can help immensely with data categorization and predictive analytics. These can identify activities to be tracked, inefficiencies in workflows and processes, individual work patterns, attendance & leave patterns for staffing and more to streamline work.
• Reduced risk of human error for more accurate work time data capture and mapping to projects.

How Deltek | Replicon’s AI-powered Timesheets Revolutionize Time Tracking

Our unified time-tracking platform leverages advanced technologies like artificial intelligence (AI), machine learning (ML), and automation to simplify and accelerate the time-tracking process.

Automatically Capture & Validate Time Data Across 100+ Work Apps

With Replicon, you can automatically collect and analyze work time data from Slack, Jira, Asana, Zoom, and other collaboration and productivity tools.

Flexible Timesheet Capture

Assemble pre-filled timesheets for quick review and submission across multiple roles and locations.

Accurate Timesheets

• Accurately capture employees’ work time data across projects. Verify, cleanse, analyze and review it for accurate billing and payroll management.
• Standardize and streamline data collection across different business functions and apply the right workflows.

Global Labor Compliance

• Leverage a built-in global statutory default pay rules library to support key business policies.
• Access the resource library and compliance support to stay informed about the latest updates to labor laws and global and regional working regulations.

Error-free Time Tracking for Costing & Billing

• Reconstruct employees’ work week across multiple projects for accurate project costing.
• Get granular, real-time visibility into employees’ current projects for better resource management.
• Capture, access and sync project data with or without connectivity anywhere and at any time.
• Speed up the billing process from days to hours while eliminating errors with advanced timesheet validations and workflows.

Convert Data to Decisions

• Leverage accurate time data to confidently forecast resource capacity to undertake new projects and optimize project bidding.
• View and track crucial metrics, access historical and real-time information to accurately plan and forecast for projects.

Plug-&-Play Integration

• No more data silos. Seamlessly connect and share work time data with various apps and platforms for project management, payroll, accounting, HR and more.
• Have a system that easily integrates with legacy software, new apps or future technologies.

The Road Ahead

Today, many global organizations have different types of employees spread across different geographies and time zones. They rely on a wide variety of digital work apps to collaborate, communicate, and execute their tasks efficiently.

The time is right for such project-based organizations to invest in a unified, AI-powered time-tracking solution that can help them automatically collect accurate employee time data from multiple work apps and collaboration tools. It can also improve client billing accuracy and revenue generation as well as help make informed decisions faster to retain a competitive edge.