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Contrary to popular belief, tracking employee time is not a tool for micromanaging or a “gotcha” tactic that’s used to penalize employees or justify firing. In fact, time tracking is an essential part of proper business and project management, not to mention it ensures profitability.

Every company has to worry about a bottom line, and a big part of the equation is the cost of human resources (i.e. labor), so it’s only natural that businesses should concern themselves with efficiency and productivity. That includes using time tracking software to compare man hours to output. Here are a few of the benefits of time tracking and the real reasons why companies do it.

Resource Management

Businesses have to balance the needs of clients with available resources in order to ensure that projects are delivered on time and are up to the quality standards expected. For this reason, time tracking software plays an important role in resource management.

When businesses utilize suitable tracking programs, they can plan to have appropriate resources in place for the work that needs to be done. For example, if more resources are needed for upcoming projects, companies can decide whether to expand and create permanent positions or, if it makes more sense, to use contractors for temporary work.

Time tracking software also benefits employees, ensuring proper billing for hours, correct pay and even more precise accounting of available leave (sick days, vacation benefits, etc.). Time off can be coordinated to avoid delays in projects, and businesses will have fewer issues maintaining efficiency and productivity.

Financial Accuracy

One of the greatest benefits of time tracking is ensuring financial accuracy. When billable hours are properly calculated, payroll is more timely and accurate, billing is completed in a more efficient manner and cash flow is steadier, ensuring that the wheels of production continue to roll.

This helps to reduce financial waste. Without standardized time tracking, companies could be losing track of billable hours, and employees could miss out on wages. Both businesses and their employees could be losing out on hard-earned money because of a lack of proper tracking.

Imagine the impact that thousands or tens of thousands of dollars in lost revenue each month could mean for a business. This could be the difference between using proper tracking software and going without it.

In addition, tracking time can significantly reduce the length of the billing cycle. If it takes 30, 60 or even 90 days just to bill clients, much less receive payment, the right tracking software could revolutionize the billing cycle and ensure improved cash flow. This, in turn, allows companies to pay employees on time and line up additional resources as needed.


In order to improve, businesses need to track and analyze performance year on year. Proper project management solutions that include time tracking, such as Clarizen’s cloud-based software, make tracking and reporting easy.

In addition to minimizing waste and increasing efficiency, proper technological tools allow businesses to review workflow over a period of time or across projects in order to spot problem areas, make adjustments and improve overall operations. The right time tracking solutions are a very important part of this dynamic.