Your Time is Money
We're all familiar with the phrase "time is money."
But I want you to stop and think about those three words.
Many small business owners try to tackle doing all the necessary tasks in their company, thinking they are saving money by not having to hire someone else, or not paying for a software solution to manage better workflow. Many times I've heard, "I can't afford to..."
Perhaps they can afford to...
They fail to realize that their time equals money. They have not done a cost comparison of their time to see if an automated solution may indeed save them money and help streamline processes.
Let's look at a typical scenario to illuminate this idea.
Best Construction, LLC (a fictional company), has grown steadily over the past three years, and now employs seven people. Frank, the owner of Best Construction, has his employees fill out a paper timesheet for each job they work. Inevitably, he spends about one and a half hours each week constantly reminding his crew to turn in their timesheets.
He then types the hours into an Excel spreadsheet, which he has proudly developed over the past year. It includes equations that add up the time for each employee and each job. However, on this day, his heart sinks as he realizes that one of the equations is not calculating correctly. Worse, he has no idea how long this has been happening. He spends two hours trying to correct the equations, and another three hours looking at the past few timesheets to see how extensive the errors have been. Halfway through this forensic search, he has to quit to do some "important" revenue generating work.
The next day, he completes his research (another one and half hours later) only to discover that the mistake had resulted in him overpaying his employees for 18 hours of work. After that, it takes the regular 45 minutes to enter everyone's time into the spreadsheet for this payroll period.
Fortunately, about six months ago, he did sign up for a time-saving payroll service, so he no longer has to manually print out checks. He takes his now-correct spreadsheet and logs into his payroll service. He enters the time for each employee. This process takes him about 30 minutes.
He then has to enter the hours, by job, into another spreadsheet, because he does not know how to use all the features in QuickBooks (he uses QB Online) and he wants to track costs per job. He's become pretty good at this, so it only takes him about 45 minutes. He then double checks all the equations (another 15 minutes). Thankfully, there are no errors on this spreadsheet.
The last thing he needs to do is enter the paychecks into his QuickBooks. He records the check for each employee, but puts the net wages into one account (Wages and Salaries), without breaking down the gross wages and the taxes. This takes him only 20 minutes. His accountant, however, spends three hours at year end (best case scenario) trying to reconcile his payroll.
When he’s finished, Frank runs across my promotional sheet about TSheets on Twitter. He thinks, "That would be nice, but I probably can't afford it, and I don't have time to learn something else." Let's see if that statement is true.
The time spent by everyone in his company to enter time includes:
• Employees writing down time on the paper sheet and turning it in - 1.25 hours per employee
• Frank bugging everyone to turn in their time sheets - 1.5 hours
• Time spent correcting errors on spreadsheet - 2 hours
• Time spent researching errors on past reports - 4.5 hours
• Regular time to enter time by project by employee - .75 hours
• Time entering hours into payroll system - .5 hours
• Double checking his project spreadsheet - .25 hours
• Entering time by project on separate spreadsheet - .75 hours
• Enter payroll into QB - .35 hours
So, to enter one payroll period, it takes 19.35 hours. If he was not doing administrative office type work, Frank could be generating new business or working on a current job. If he bills out at $85 / hour, manually running payroll could be costing him $901 in potential income loss (10.6 of the 19.35 hours are his). This article is not about proper margins or markups -- I'm using fictional numbers to make a point.
Now let's see how much time it would take with TSheets:
Signup for free trial - 1 minute
Time to go through step-by-step setup, including connecting QB and importing items - 9 minutes
Time to play around in TSheets to learn how to clock time and see who's working - 3.75 minutes
Time for employees to enter time. They select the job and push a button to clock in, then another button to clock out. - 1 minute / day
Time for you to review and submit time to payroll - 30 minutes
Time to review job costing reports - 30 minutes
Cost for TSheets - $55 / month ($20 monthly fee + $5 per employee. If Frank decides to pay annually, this cuts his costs to $44 / month)
Total time spent on this payroll period: About one and a half hours ($104.55). Add $55 for TSheets, and the total cost is $159.55. A minimum savings of $741.45 per pay period.
Plus, there are extra benefits:
Improved employee morale (TSheets is time tracking employees love to use!)
Error free reports make it easy to see where and how time (the most precious commodity) is being spent -- which results in more accurate job costing
TSheets Scheduling helps Frank organize his employees and saves him another 3.5 hours each week, minimum
Accurate GPS tracking allows Frank to see where his employees are while they’re on the clock. Not only does this improve employee accountability on the job site, but it allows Frank to see how far his employees are from the next job site (in case an emergency call comes in)
Like I said, these numbers are not meant to be an accurate portrayal of all businesses. The hope is that you will look at your own numbers and see the savings for yourself. Perhaps you'll discover that you can't afford NOT to implement TSheets for your time-tracking needs.