What is a Timesheet?

How are timesheets generated?

There are multiple ways to generate timesheets, but the most traditional and old fashioned way is with pen and paper - although many businesses have moved to software such as Microsoft Excel to create a digitised version of their manual timesheets. Employees enter in their start, end and break times manually, and their timesheet is then submitted to their manager at the end of each week or month.

As manual timesheets are liable to human error, they can be inaccurate. Most businesses have now adopted a more automated method of generating time cards for their employees, using a time clock or 'punch clock'.

Time clocks may be cloud based, such as mobile and tablet based apps, or may utilise a more traditional physical terminal, which often requires a swipe card, pin or fob in order to clock time. Additionally, many time clocks also utilise biometrics such as facial recognition or fingerprints to verify the correct employee is clocking in for their shift.

What are timesheets used for?

Timesheets are generally used to calculate how many hours an employee has worked over a weekly or monthly period; this information is then sent to payroll, in order to calculate the pay they are due for that period (including any overtime pay for additional hours, or pay at special rates for hours worked on certain days of the week).

In many industries, timesheets are used to back up invoices to clients for work that has been provided to them on a project. Timesheets can be used to calculate an employee's 'billable hours', which are charged to the client at a pre-agreed hourly rate.

Timesheets are also used in project management, to assess how many labour hours are being spent on a project, and thus determine whether the project is running on budget and on time. They also help to identify where staff are overburdened on a project, if they are continuously running into overtime.

Are timesheets a legal requirement?

Whether or not it is a legal requirement to keep timesheets depends on your local employment law - although generally, it's always a good idea to keep timesheets. In both the UK and Ireland it is a legal requirement to keep information about your employees working time and pay.

What are the benefits of using a timesheet?

Recording hours worked in a timesheet gives full visibility of how many hours each employee has worked over a time period, and which projects or jobs have taken up most of their time. It's easy to see where employees are under or over-utilised, helping to point out staffing needs.

Tracking time worked per job or project in a timesheet allows project managers to monitor how many labour hours are being spent on each project, giving them greater insight into where their labour budget is being spent and which projects are not running profitably. Timesheets are commonly used in management accounting for this purpose.

Using an automated or cloud-based timesheet solution gives additional benefits, such as streamlined payroll with fewer human errors and less time spent on manually entering data. This is particularly useful if a business pays multiple different overtime rates for different hours or days of the week, which can be time consuming to calculate manually.

What are the drawbacks of using a timesheet?

The major drawback of manual timesheets is the opportunity for employees to enter incorrect times; either by error when filling in timesheets retrospectively, or intentionally to increase their pay. Even more modern systems can often be fooled by 'buddy clock ins', where one employee clocks in for another by borrowing their pin or swipe card.

Many employees may feel that using a timesheet to track their work is an inefficient, time-consuming process, and doesn't provide an accurate picture of their productivity.

For roles where output can be easily measured, it may be more useful to use this as a metric to monitor success, rather than simply measuring hours worked behind a desk. A timesheet doesn't give any indication as to the quality of someone's work, or the satisfaction of their customers and clients.

Are timesheets a waste of time?

The answer to this question is - it depends. Whether or not your timesheets are a waste of your time depends on the method you're using to generate them, and how usable and granular the data is that's extracted from them.

For a full deep dive into whether or not timesheets are a waste of time in 2023, read more on our blog.