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THE IMPORTANCE OF TIMESHEET COMPLIANCE

Updated: Oct 13, 2023

Timesheet compliance is important stuff. If your product is predominantly people, in that you’re delivering a service or project, it is the same people that are your profit margin. As a result, measuring billable time and completing timesheets correctly is pretty significant; do it poorly and risk damaging your profit margin, alienating customers and creating a despondent workforce.


In any business where utilization is a primary metric, either for forecasting deliverables or implementing them, you’ll likely be reliant on the employee themselves accurately recording their time - likely in the form of TIMESHEETS!


But, and we’re not pointing fingers here, employees tend not to like timesheets. This one simple truth can cause all sorts of problems for the following departments:


  • finance for tracking profit/margin or accurate invoicing

  • pre-sales for precise demand forecasting

  • delivery for not having enough hours to implement

  • customer success for having to deal with unhappy, overbilled customers

  • project managers for over-serviced clients and wasted hours


The list could go on. To reverse that phenomenon, get people to complete their timesheets correctly...but HOW?


WHAT IS TIMESHEET COMPLIANCE?


Stage one is understanding this question. Well, it’s obvious isn’t it? Do ya timesheets! Beyond that timesheet compliance is about filling in billable hours accurately and correctly; often these are to a set of standards that are predetermined at the company level, to establish what is pertinent to them, or on an industry level, so there is affinity to project types. This means projects are tracked effectively and forecasting is consistent and accurate, but also people get paid and invoiced accurately.


WHY ARE TIMESHEETS IMPORTANT?


Timesheets are a vital tool for service-related businesses. Tracking the time spent on tasks correctly facilitates accurate forecasts and invoicing, and it also enables managers to identify common project delays and refine processes accordingly.

That said, timesheet compliance can present some difficulties for employees. Yes, there are rules to follow but as a PM you have work to do and a poor memory for the hours you’ve worked. This can cost your business for the following reasons (nicely they all turned out to be Ps):


  1. Profit: If your employees are mis-reporting, it’ll likely lead to inaccurate forecasting and this could be in either direction - over or under. Clients getting overcharged, or mis-charged in line with sales promises (sometimes referred to as the value-promise gap) often results in poor customer success, churn and no repeat business; this is only further exacerbated as you then provide correctional work for free. It can also create issues with starting on time when the volume of time required is mis-forecast, further hitting your bottom line.

  2. Pay: On the flip side, undercharging clients might mean your employees are getting the short end of the stick, especially if there is variance in billable rates due to differing types of work or if you offshore your resources. You want to be accurate for both internal and external reasons. This is one the less recognized reasons why it's important to complete timesheets correctly.

  3. Projections: Your forecast’s accuracy is dependent on historical data. If timesheet compliance is low, you’ll likely be misjudging how long work should take in actuality. This can result in you losing clients at the bid stage as your competitors were able to provide more realistic timelines and SOWs. Alternatively, timesheet non-compliance can impact success later with work not aligning to the SOW at each milestone. Timesheets are essential to the concept of good resourcing and beyond - under- or over budgeting time can kill a profit margin.

  4. Performance: The final reason why timesheets are important relates to performance. Using timesheets effectively means you can track the key moving parts of a project and your business overall. Correctly filled-out timesheets can highlight risks, for example, burnout, underperformance, unprofitable work, lack of client engagement and unfulfilled promises. With this in mind, timesheet compliance plays a vital role in managing both, customer relationships and employee satisfaction.

THE SOLUTION: HOW TO GET EMPLOYEES TO FILL OUT TIMESHEETS ACCURATELY AND ON TIME


I’ve been trying to shoe-horn this in so here it goes: The Importance of Being Earnest.


Phew, done - but this is true. You’ll want, as one of our clients said, a single source of truth for your organization and accurate timesheet compliance is a keystone in this wider picture. Trouble is how to create that accuracy? The key to getting employees to fill out timesheets accurately (and on time) is to invest in the right tools.


Timesheet tools are commonplace and there are a variety of options to choose from (I sense a new blog post coming). If service delivery is your world, then you should look to a tool that pre-populates as much as possible, taking the onus off the unreliable employee - they are reliable in other ways, don't worry!


The best systems should easily accommodate flexible working practices like part time workers or those who have less hours a day in comparison to a colleague, so that you can truly see the cost and capacity based on individuals as opposed to blended data. If you want to be able to make data-driven business decisions, you need the data to be accurate. Automation can create a more precise picture of work with the added bonus that employees don’t have to spend hours on doing the thing they hate the most...timesheets!


 

Our Resource Management solution on Salesforce, is ideal for ensuring timesheet compliance. See foryourself how you can populate timesheets with our software in this video.


If this post has piqued your interest, you might also benefit from checking out our playbook on getting started with project management on Salesforce. Fancy getting timesheet compliant right away? Book a demo now and check the resource management option.




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