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Do your exempt salaried staff log their time in time sheets?

Does your company have salaried staff log their time in a time sheet? If not do you make them turn something in to show their use of PTO/Bereavement/FMLA/other trackable hours? How large is your company? Is it easier not to track when you are smaller (i.e. a manager "knows" the time put in) or larger (because no one want to manage this)? As a CPA firm we've always tracked time but we now have many lines of service where our professionals don't bill based on time. I'm trying to do an in-depth analysis on the benefits/cost of recording time versus the benefits/cost of not recording time. Also what are the legal ramifications if you know of them?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Shannon

From a business perspective, how would employees, their managers and the owners track PTO and other time off if people do not report it? Exception based time reporting (i.e. I need only report if I am NOT working, - vacation, holiday, FMLA, etc.) works well for people whose working time does not need to be tracked.

From a P/L or line of business perspective, even if you don't bill based on time, don't management want to track margins anyway? How do you assign direct labor to those services and assess if you made adequate margins or not, without having people record their working hours against these services? This can be relevant for fixed fee services (assuming they are large enough to track this way).

Regarding legal issues, look for exempt v non-exempt staff, overtime rules etc. Some state laws have specific OT regulations.

Finally, if it's a new way of working for some, plan your messaging and explain the value to all. Get your execs to endorse/support it first, to reduce risk of non-compliance.

Regards

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

i work in a large manufacturing company. We do not require the logging of time. We do however require a request for time off (vaction/sick/ect) to be sent to a mail box that HR inputs into our ADP system so we can track vacation and sick time. It's simple, but very effective.

Richie Wohlers
Title: Controller
Company: Vision Mechanical Services
(Controller, Vision Mechanical Services) |

Sorry responding to such an old topic. But how do you deal with employees who "forget" to submit a request? Especially management level who spend a lot of time out of the office. How do you know if they are on vacation or traveling for work?

DeEtte Harrington
Title: CFO
Company: MRC
(CFO, MRC) |

We are a project based business with a large portion of our staff that are not 'billable' by the hour. Our challenge is in tracking those non billable hours back to a project, largely because these employees work on multiple projects each day. We need the information for the reason Len states above, we need to assess profitability of our projects. Does anyone have any recommendations around tracking these hours more accurately? The argument posed by staff is that is 'too time consuming' to allocate their time across so many projects each day.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

DeEtte
I like to distinguish between "chargeable" and "billable" labor/effort. Billable is governed by the sales order/SOW. Chargeable should be used to drive your pricing model.

For people who can track their time to projects, I'd suggest you start slowly and show benefits. Make the case with the execs: "if we can measure effort we consume on each project, we improve our margin management." For employees whom you want to start tracking time: " if we don't know what projects cost us, we put the company (and our jobs) at risk."

People often fear the "big brother" implications behind time entry, so be careful. Start with:
1. broad based task codes and time estimates (don't ask these folk to specify minute details of tasks and be accurate to the minute); try "Support work on Project 123=1.5 hours"-doesn't matter if it was 1 or 2 hours, let people get used to the new process, and allow for accuracy to improve over time.
2. encourage people to think how they can track each project's time worked easily during the day-don't wait until end of week 5pm
3. allow for mistakes, don't overreact when you find errors; reward publicly to show it's working, but address problem staff quietly
4. some people will do great, others will show signs of tension or hostility. Some folk may load one project with more time than justified, or to hide their own inefficiency. React calmly. It's a management issue, not an accounting one:)
5. measure, measure, measure.
6. show your execs how the change is working-where are you getting valuable insights into cost of work v revenue and propose some suggestions.

Hope that helps!

Jaime Campbell
Title: Chief Financial Officer
Company: Tier One Services, LLC
(Chief Financial Officer, Tier One Services, LLC) |

It's not time-consuming if you log it as you go. I was in public accounting for 10 years and we used Timeslips. I found the reporting cumbersome so I also maintained my private Excel log, which was super-easy to analyze. Contact me privately for more information.

Jaime Campbell
Title: Chief Financial Officer
Company: Tier One Services, LLC
(Chief Financial Officer, Tier One Services, LLC) |

With the exception of any compliance issues, it all depends on what actions you're going to take based on the summary information that you can get from this tracking.

Tracking activity is a concept independent of time-based billing vs. value billing. I was in public accounting for 10 years and every single person, salaried or otherwise, professional or administrative, tracked his or her own time in increments of 15 minutes daily. Sometimes we billed hourly and other times on fixed fees, but that doesn't matter.

We got firm-wide reports every month with our realization rates, effective billing rates, and other KPIs.

Now that I am running my own management consulting firm, I track billable time only because that is what interests me.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

All exempts sign and submit a simple monthly time sheet. There are too many downsides of not having this record. Our legal council agrees.

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

Where I work, we do not worry about billable hours, however, we do have each salaried employee approve their time cards at the end of each time period. The card is automatically created with their schedule for the past 2 weeks. It is their responsibility to make sure it totals 80 hours and that their time off (PTO,Vacation, Jury, etc) is recorded properly. By having the employee (even salaried) approve their time cards on a high level (not specific hours per day, but time per pay period), they are taking responsibility for reporting accurately. If someone needs to be terminated for any reason, including falsely (not) reporting time worked/off, they are the first to approve, so they are held responsible. This has helped us a lot in unemployment claims.

Julie Hammeras
Title: Manager of Financial Services
Company: Park Water Company
(Manager of Financial Services, Park Water Company) |

When I worked in an environment where I needed to track billable time, I used a free product called Chrometa that tracks what you are doing on your computer which you can analyze to help you track by project. I think it is a good tool, but I wouldn't want my boss looking at it, as it also tracks personal web searches, etc. But in the cases where people think tracking is too "time-consuming" this makes it easier.
BTW, I am not affiliated with Chrometa in any way.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I am instituting a new policy at a client.

All employees (exempt) will create a 2nd calendar in Outlook. Daily they will put an entry as to whether working, on biz trip, vacation or sick.

Monthly they print to PDF and send to accounting.

Low tech, low user intervention, no excuses they "couldn't learn the system".

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