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Updated Jan 02, 2024

What Is a Timesheet?

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Max Freedman, Business Operations Insider and Senior Analyst

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Many American workers know the routine of punching in and out. However, office employees may be less familiar with time sheets ― and, in some cases, that can be a problem. If your small business employs hourly employees or bills clients by the hour, you need time sheets to keep yourself ― and your employees ― accountable. Just as importantly, time sheets will streamline operations and reduce costs. Learn more below.

Editor’s note: Looking for the right time tracking solution for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What is a time sheet?

A time sheet is a document that shows how many hours your employees have spent working, whether on-site or remotely. Your time sheets play a key role in managing employee attendance properly. You can also use them to calculate how much to pay your hourly employees when running payroll for a specific pay period. For example, if an employee who earns $15 per hour works 80 hours during your biweekly pay period, you’ll pay them $15 x 80 = $1,200 before taxes and deductions.

A time sheet can also show the number of hours some ― or all ― your employees have spent working on a particular project. If you charge your client per hour instead of a flat fee, you can determine more precisely how much to bill them and have ample backup documentation. For example, if you charge $40 per hour for your accounting services and an employee spends a total of 10 hours working on a client’s taxes, you’ll charge $40 x 10 = $400.

Time sheets also come in handy for determining how long specific processes take. For instance, if you notice that one task related to a particular project has taken a disproportionate amount of time, you can determine how to handle this task more quickly in the future.

Did You Know?Did you know
The best payroll software fully automates the processes of paying your employees and calculating, withholding and filing their federal, state and local payroll taxes.

How time sheets work

Time sheets are relatively straightforward, but learning how they work before implementing them never hurts. Here are the basics.

1. Choose between digital and paper time sheets.

Depending on your company’s infrastructure and how you pay your employees, digital or paper time sheets may better suit your needs. Choosing time and attendance software will streamline integrating your time and attendance data with your payroll processing software ― digital time sheets are often superior to their paper alternatives. They also make data storage far easier and lower the chances of data loss or human error.

However, in specific jobs, the old punch card and wall-mounted reader remain the norm. These paper time sheets continue to be popular because they’re straightforward and inexpensive. So, if you need the least expensive solution possible, choose paper. However, since employees can’t specify the number of hours spent by project with paper time sheets, nor can you integrate them with your payroll software, digital time sheets may be worth the investment.

2. Decide how often employees must file their time sheets.

Just as there are several types of payroll frequencies, so too are there several frequencies for filling out and submitting time sheets. These include the following:

  • Daily time sheets: With daily time sheets, employees log their time at the start and end of every workday.
  • Weekly time sheets: With weekly time sheets, employees submit all their hours for the workweek.
  • Biweekly time sheets: With biweekly time sheets, you designate a given date during a two-week period on which employees submit all their hours worked.
  • Bimonthly time sheets: With bimonthly time sheets, you designate two monthly dates on which employees submit the total number of hours they worked.
  • Monthly time sheets: With monthly time sheets, your employees submit the total number of hours worked at the end of the month.

No matter which frequency you choose, your employees should still clock in and out for all their shifts. This provides two benefits: 

  • You’re not left estimating the number of hours an employee worked when it’s time to run payroll.
  • Clocking in and out ensures employee accountability. It’s far harder for employees to commit time theft if they have to record the hours they worked each workday.

3. Have your employees clock in and out.

At the start of an employee’s shift, your employees should clock in for the day. They’ll clock out once they finish work. Your employees should also clock in and out at the start and end of their meal and rest breaks and indicate their vacation days so you don’t overpay them. You can avoid logging vacation days with time-off policies that don’t mandate pay for hours not worked; however, employees certainly prefer paid time off.

Employees bear sole responsibility for clocking in and out ― you don’t need to do it for them. This way, your employees are accountable for accurately reporting their hours and answering questions about potentially inaccurate time sheets. 

Time clock rounding is when you round an employee's hours worked up or down. This practice can help streamline your payroll processes.

4. If applicable, have your employees categorize their time by project.

Although time sheets are commonly associated with hourly workers, full-time employees may also need to use them. Time sheets are especially important for full-timers if you bill clients by the hour. In this case, your full-timers should indicate when they worked, what projects they worked on and for which clients. With this information, you can accurately bill your clients and answer clients’ billing questions.

5. Approve your employees’ time sheets.

You should collect your employees’ time sheets after their final shift during your time sheet- collection period, such as every two weeks or once per month. You’ll then need to approve these time sheets for payroll. If you have a question about an employee’s time sheet, you can ask the employee about the hours in question.

Benefits of time sheets

Key benefits of time sheets include the following:

  • Time sheets make payroll processing easier: The more employees you have, the harder it can be to remember how many hours each worked per week. Additionally, if you pay an employee for less time than they worked, you may appear to be stealing wages. Since time sheets make employees’ total number of hours worked readily available, they eliminate many payroll processing challenges.
  • Time sheets encourage transparent internal practices: By having your employees use time sheets, you can address a common employee concern that some team members work less and get paid more. Using time and attendance software lets your team know that everyone is following the same rules and that hours are being monitored.
  • Time sheets facilitate transparent client billing: If you bill your clients hourly, there’s always a chance that they may question the total amount you charged. With your employee time sheets handy, you can prove that your team worked the hours for which you’re billing. Payment should then be right around the corner.
  • Time sheets foster workplace efficiency: By identifying your most productive employees, you can improve operational speed and efficiency. You can also save money because employees who work faster can take on more projects. 
  • Time sheets encourage better project management: Time sheets help you track and manage projects better in two key areas. First, they indicate how much time specific tasks require and you can factor this time into future projects. Second, time sheets show which employees take the least time to perform high-quality work. As a result, you know which employees you should assign to your highest-priority projects.
Choosing project management software involves assessing your business's size and pain points. You should also consider each platform's ease of use and ability to scale accordingly as your business grows.

Time sheet templates

When implementing time sheets for your business, you’ll likely get the best results if you start from a template. We’ve created a basic time sheet template for you to use as you create time sheets for your business. In this time sheet, you’ll see the employee’s start time, end time and lunch break for each date worked. You’ll also see the total hours worked broken down into regular and overtime pay hours next to a reminder of how many hours comprise your company’s workweek. Your name and the employee’s name appear at the top.

The best time and attendance software for time sheets

Instead of manually filling out spreadsheets, you can use many of the best time and attendance systems to automate the process. Below are five time and attendance systems with powerful time sheet functionality:

  • When I Work: Your employees can leave notes in their time sheets if you use When I Work for time and attendance management. Time-off information appears in your time sheets with When I Work, as well. Learn more via our in-depth When I Work review.
  • Rippling: Your team members can use the Rippling mobile app or desktop version to track their time sheets. This way, they can notify you of accidental underpayments or overpayments and you can correct this issue before it becomes a huge problem. Read our Rippling time and attendance review to learn more about this platform’s functionality.
  • Clockify: This platform comes with a dedicated time sheet view through which you can manually enter hours worked. You can also use this view to look through your team’s time logs. Dive into our comprehensive Clockify review to explore this platform’s additional features.
  • QuickBooks Time: Whether your employees log their time via the mobile app or a desktop browser, QuickBooks Time transfers this data to your time sheets. If your team uses the QuickBooks Time mobile app to track mileage, that data automatically appears on your time sheets. Discover what else this powerful platform can do via our detailed QuickBooks Time review.

Tracking your time the easiest way possible

With the best time and attendance systems, you automatically capture the data needed for your time sheets. What’s more, you also auto-create them. That said, even tracking and working manually with paper time sheets is easy, though not quite as efficient as with software. Chalk it up to the very nature of time sheets: They’re among the most straightforward business resources and, now, you know exactly how to create them.

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Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
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