Project Management Guide
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Why Should I Use Time Tracking in Project Management Software?

Time tracking allows you to keep track of the hours spent on individual tasks and on the project as a whole. This visibility helps you to assess the accuracy of work estimates and the effectiveness of your employees. Time tracking is essential for professional services providers, companies that have hourly employees or work with freelancers, and businesses that use cost-plus pricing.

Time tracking within project management software should allow your team members to add time entries to tasks easily. After the time is recorded, your software should also enable you to view and print time reports for projects. This functionality allows you to track the workload of your team members and print reports for clients and other stakeholders.

How time tracking in project management software works

With project management software time tracking, you should be able to add time entries for tasks, easily keep track of the hours spent on tasks and projects, and quickly create reports. 

Adding time entries

Ideally, your project management software will allow you to choose whether employees can create time entries manually or use an automatic tracker. There are pros and cons to each option, so the best solution often depends on the task or project.

Manual time tracking allows employees to select a task and manually enter the number of minutes or hours spent working on it.

The biggest benefit of this method is that time tracking can be completed quickly and easily at any time. You don’t have to worry about remembering to turn on and off a timer as you move through tasks.

However, the biggest drawback of this method is that it can lead to inaccurate tracking. If people are manually tracking time spent and entering the information hours or days after the fact, they will likely end up guessing at how much time was taken.

The alternative is using a tracker to record and log time spent on tasks automatically. Employees simply click the play button within the software when they start a task and then pause or stop the timer whenever they’re not working on it.

Using a recorded timer can provide much more accurate time tracking. This method can also increase customer and stakeholder trust, which is important if your project price is based on labor-hours spent.

The downside of this method is that employees need to remember to pause the timer during breaks or when they switch to other tasks, as you can only track time for one task at a time.

For instance, imagine an employee is working on a task for your project, and another project manager pops by their desk to ask them a question about their own project. Maybe that quick question then turns into an hour-long impromptu meeting. If the employee forgot to pause the timer, your project would now have a task with one hour of work that doesn’t belong.

This mistake increases your project costs and can throw off future project estimates. While one hour may not seem like a big deal, when you have many employees working on a project over many months, little lapses such as this can have a significant overall impact. 

Keeping track of hours

You should select project management software that can show you hours worked in a variety of ways, including:

  • By task 
  • By project
  • By employee

Seeing hours per task allows you to manage work at a detailed level without micromanaging employees. For instance, you can easily see which tasks are going over budget and which tasks appear to be behind schedule. Time tracking at the task level will also help you create estimates and budgets for similar work within future projects.

Time tracking at the project level enables you to see the big picture. You can use this to assess the overall progress and performance of your project quickly. This level of detail is also critical for employing earned value management (EVMS) on larger projects. If you have a project with 100+ tasks, conducting EVMS at the task level is too unwieldy.

You will also want to track hours by employee, so you can monitor and assess the productivity and workload of your team. If employees are paid by the hour, this is especially critical, but it’s also useful for salaried employees.

For instance, you can compare how long it took two different employees to complete similar tasks. If one took significantly longer, it could indicate that one of the employees has discovered a better way to do things, or that the other employee needs more training or coaching.

You can also use employee time tracking to help monitor and smooth out the workload. If you see that one engineer logged 60 hours last week on project work and another only logged 20 hours, despite them both being salaried full-time employees, you know that tasks may need to be re-distributed.

Creating reports

There are two types of reports your project management software should be able to create:

  • Timesheets
  • Time reports

Timesheets allow individual employees to see a quick overview of the tasks they worked on during a given week and the time they spent working on each of them. These timesheets should include:

  • Tasks the employee has enabled time tracking on during the selected week
  • Tasks assigned to the employee, which are/were scheduled for the selected week (or any day within the week)
  • Any starred or flagged tasks, scheduled for the selected week
  • Any tasks the employee chooses to manually add to their timesheet or project management software

The benefit of timesheets is that employees can easily monitor and track their progress. It provides them with a centralized place to see what they need to focus on each week and how their progress is going towards each of those tasks.

Time reports are the reports that you, as the project manager, and other stakeholders will want to review. These reports should be viewable within the project management software as well as downloadable as either a CSV or PDF file.

Time reports should be customizable so that you can run them for selected tasks, projects, employees, and/or time periods. For instance, you may need to provide the customer with a report of how much time was spent working on their project last month.

Benefits of time tracking

One of the challenges for a project manager is finding ways to monitor progress without micromanaging. After all, no one can do their best work when they feel like their boss is constantly looking over their shoulder. But without transparency into how workers spend their time, you can be caught by surprise when there's a major setback or time overrun.

For many businesses, time tracking apps have become vital tools, providing leaders with information to make work smoother and keep teams on track.

The best time tracking app is integrated right into your project management software. That way, time can be automatically assigned to tasks, and you never have to worry about trying to transfer data or synchronize two separate systems.

With time tracking, you can monitor progress in real-time and capture the data needed for accurate future project estimates. Data from time tracking apps can also reveal pressing issues about the personnel and resources involved in completing a project.

For instance, time tracking can help identify if certain employees are out sick frequently or spending a lot of time on non-project-related work. Looking at the data can also highlight ways employees can better organize their days to optimize productivity. 

You may even discover bottlenecks and inefficient processes within your project by monitoring how long tasks take and comparing those results to budgets, industry standards, and progress on similar projects.

When you set specific goals and stick to them, project time tracking plays a powerful part in motivating employees and keeping them on task. Using an automatic tracker can reduce employee attempts to multi-task. It can also help prevent them from being side-tracked by non-critical “noise” and help them focus on the task at hand.

Further Reading
blog post

4 Best Practices for Using a Timeline in Project Management Software

blog post

The 15 Best Time Management Apps You Should Start Using Yesterday

blog post

Can Time Tracking Apps Improve Your Team's Performance?