We are continuing our column on the different tools that will help you improve your project management practices with Excel. Today, we are going to focus on Timesheets and how this simple time tracking tool is crucial for the management of your firm.

What is a Timesheet?

A timesheet, also known as a “time book,” is a time management classic. It’s a simple method for recording the amount of time an employee spent on each of their tasks or activities. Its primary use is for payroll and employers use it to ensure their employees are accurately paid.

Why use a Timesheet?

Nowadays time management has become an obsession and in our fast-paced modern era, time has become the rarest and most precious resource we have. Which is why you should be using a timesheet.

Timesheets can do more than just calculate someone's monthly salary and used to enter time for hours worked — they are much more powerful than you think. 

By providing you with valuable information such as the type of activities your employees are working on, how much time they're spending on each of these activities and the monetary value tied to these activities, timesheets allow you to meet your project management objectives and act as a point of reference for future initiatives.

For any project manager, timesheets are your best friend because they help with:

  • Scheduling tasks/activities
  • Allocating resources
  • Determining hiring needs
  • Managing productivity levels
  • Estimating project costs
  • Assessing the workload
  • Anticipating project delays

And for any employee, timesheets are also your best friend because they help with:

  • Improving your productivity levels
  • Visualizing how you're spending your time
  • Comparing previous time entries to make realistic estimates for future tasks/projects 
  • Making sure you get paid accurately 

Project managers are able to use the information found in timesheets to make strategic decisions. With all the information collected from the timesheets, project managers will have more visibility and better insight on what's going on with every employee and project.

There are many uses cases for timesheets, but here are two specific examples that will help you get the gist of it.

To give you an idea of the kind of information you can find in timesheets, here's an example we've create to illustrate some of their benefits :

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Ensure your employees are working on the right activities

When your employees are working on multiple projects at once, it's difficult to make sure they're working on the right activities, which is why you should use a timesheet to have visibility over how they're spending their time.

By that, we don't mean following your employees around and checking on them every second of the day. Tracking your employees' time means making sure they are working on revenue generating activities or billable time. These activities are the most important ones because they bring in cash for the business AND for the employee.

If an employee has been spending an hour a day for a week photocopying papers, I am pretty sure you’re losing money.

So, to create your timesheet, you will need a worksheet containing all your resources and the activities they have been working on during a specific period of time. 

In this example, we have presented different resources within an architecture firm and each of these resources has a certain amount of tasks/activities to work on. Your objective as a project manager is to ensure your employees are working on the right activities.  You should be asking yourself: Are my employees spending enough time on important activities? or are they spending too much time on secondary activities?

To get an answer to these questions, you can rely on these pivot tables which are based on the timesheet above. 

(When creating your pivot table, make sure you select non-billable for this example.)

In our example, these pivot tables allow you to see the type of projects your employees are working on and how much time they're spending on each of these activities. As a project manager, what you should be focusing on are the activities that are non-billable because these do not generate any cash for your business and your employees could be working on more important activities. 

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In this example, we can see that Patrick has spent 103 hours on non-billable activities and interestingly enough, your employees have contributed a total of 161 hours to administrative activities, most of it coming from Patrick. This means that Patrick has been spending his time unwisely, considering he was hired as a consultant.

Now that you're aware of that, you could either try to reduce the time spent on administratives tasks or perform a review of your non-billable activities and see if some of them could be billed to your clients.

Ensure you're not working for free

Using timesheets to record hours can also help you accurately bill for your services. How this works: At the end of any project you end up billing the work performed for the people that were involved. As a project manager, you want to make sure that your client is paying you for the right amount of hours worked.

In this example, we are going to break down the number of hours worked for each client and identify the amount billed per client. 

You'll also be able to do this with pivot tables !

Screen Shot 2018-08-10 at 10.54.43                       Screen Shot 2018-08-10 at 10.52.59

In this example, we can see that your team has worked a total of 101 hours for Client 1 and billed the amount of 4280$. However, your team has worked a total of 47 hours for Client 3 (much less than Client 1) and billed the amount of 5210$. 

How is it possible that your team has worked much more for Client 1 but is getting paid much less?  Are you billing your time properly?

It could be that the employees assigned to Client 1 have spent a lot of time working on administrative tasks which are not billable. But it could also be a manual error, which is very common in Excel files. 

But not to worry, everything is going to be fine.

Since you've been using a timesheet, you have proof of the work done and can easily rectify it with your clients and justify your earnings. 

Here's something to think about: would you have been able to do that if you weren't using a timesheet? The answer is no and here's why:

This is a scenario illustrating what would have happened if your employees weren't using a timesheet:

Your client has new requirements and changed the project scope a couple of days before the deadline. Your employees get to work and put in extra hours to get everything done BUT no one is paying attention to the extra number of hours they've put in. 

When the day comes, you get paid, but ONLY for the number of hours you and your client initially agreed on because there was no proof of the work done you and your employees can't justify their earnings. 

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How To Create A Timesheet?

Now that you understand the purpose of a timesheet, here's how to actually create one.

Note: Microsoft Excel version 2011 was used for this tutorial. If you are using a different Excel version, or Google Sheets, the process remains the same.Screen Shot 2018-08-09 at 16.24.56

Here's the example of the timesheet that we have created and filled for you. It's crucial for you to be able to track and measure the data that is most important to you and your business. 

Here are the essential categories for firms in the professional service industry:

  • Name of the employee who entered his/her time 
  • Project category also known as "project type"
  • The client who hired you for this project
  • The activities your employees have been working on for this project 
  • The tasks/deliverables your employees have been working on 
  • Job function of the person entering their time

Regarding the data itself, you'll be able to find:

  • Time in hours, % of time per day or per week
  • Bill rate or hourly rate (The amount that a company or professional charges per hour of work)
  • Cost rate or hourly cost (what an employee costs you as a business, their salary and overhead)
  • Amount billed (product of the bill rate of an employee and the amount of hours worked on a project)
  • Billable hours "Yes/No" (essential for all firms in the professional service industry, it refers to the time worked on tasks, activities or projects that will be charged to your client)
  •  Comments section (could be required for certain tasks that will be audited later, such as tasks eligible for tax credits)

To learn how to create and analyse pivot tables, please visit our article: How to Create An Excel Pivot Table?

Why Excel Timesheets Might Not Be Enough for You

Excel is a handy tool that's often used for time management, even though it's far from being the most efficient tool for that task.

Did you know that 47% of companies use spreadsheets for planning and budgeting?  These spreadsheets can be particularly important, since 93% of them lead to decisions that have an internal or external impact for the company.

Here's the problem: 88% of Excel files contain errors. That's right. 88%. And that's just for major errors.

It has become such a well-recognised problem that there even exists an interest group dedicated to spreadsheet errors (you can have a look at their horror stories here).

Every day, managers make decisions based on arguably unreliable data. If you don't want to make the same mistake, find out how Beeye can help you keep your data (and your mind) sane.

To go further, here are 7 more reasons why you should quit Excel.

Get Help with technology

As mentioned earlier, a large number of managers use Excel to manage complex information related to their activities and their employees. However, a lot of time has to be spent looking for information, gathering it, analyzing it, and so on. And you're most probably going to come across MANY errors. 

Which is why Beeye, a smart planning tool was created to assist project managers in their day-to-day operations. Using Beeye's timesheet will help you properly & accurately track your employees time and effort spent on tasks/activities. It will also allow you to gain visibility on all the different ways resources spend their time (billable vs. non-billable) and how that affects your firm's profit and revenue, all of this in real-time. 

Moreover, it will allow your employees to become more aware of their time management thanks to our feature that allows you to compare and analyse planned time vs actual time. 

For more information, here are the 5 main tips to keep in mind when implementing a timesheet.