Why time tracking matters
Time tracking matters for various reasons. Your employer might require it for invoicing, budgeting or receiving subsidies. As a self-employed professional, the same may be true. But time tracking is also essential to measure and increase your productivity.
You might perceive time tracking as a necessary evil. But your company's finance apartment might need it for invoicing customers. This is especially the case when you work on a project basis or an hourly rate is applied.
Understanding your time spent on projects is essential to create accurate budgets. This is especially the case for fixed-price projects. It is also needed to keep an eye on active projects to avoid making a loss.
You or the company you work for might be eligible to receive subsidies. In some cases this requires justification based on hours. WBSO from the Dutch government is an example. It requires a minimum amount of hours spent on research and development.
In Dutch we say "meten is weten", which means you gain knowledge by measuring. To increase your productivity you first have to measure how you spend your time.
Ways to track time
Now that you know why time tracking matters, let us dive into various ways to track time.
The good old pen and paper. It lacks the ability to run reports and import it into other (e.g. invoicing) solutions. Plus what to do when notes get lost? And last but not least, summing up the total amount of hours sounds like a lot of work. Digital note-taking or software such as Excel might solve some of those limitations. But for most professionals it is likely not the best solution.
Invoicing or HR portals
Your company might have a portal that you need to use to submit your hours. This portal serves (administrative) departments to do their job as described earlier. But it does not help you tracking your time. You are likely requested to submit your hours once a week, typically on a Friday or Monday. But it is hard to remember exactly what you have been doing and for how long. As a result your submitted hours are inaccurate. This has negative consequences for invoicing, budgeting and more.
Time tracking software
Many digital tools, apps and services exist making time tracking easier. Some of them focus on time tracking specifically while others include it as part of a larger suite. Some of them are focussing on specific audiences (e.g. self-employed professionals). And some of them are available for multiple platforms. But the way how time is being tracked is typically the same. They either follow a manual or automatic method, both having advantages and disadvantages. And then there is a third method, that combines advantages of both.
Manual time tracking
Most solutions follow this method, typically by using a timer. You need to start this timer when you start working on a task. Once done, you need to stop it. The solution then assigns the time interval to the given task.
This method is simple and accurate, as long as you keep toggling timers while working. But like everyone else, you will forget to do this now and then. And when that happens resulting timesheets will be inaccurate requiring correction afterwards.
Advantages: accurate when done right, no privacy issues (see below).
Disadvantages: interruptions while working, requires discipline, inaccurate when you forget to toggle timers.
Automatic time tracking
Automatic time tracking solutions work by monitoring your work. It does this by analysing your screen, emails, documents, visited websites, and more. Next, it tries to assign tasks to collected data. The more data it has, the better it becomes in assigning tasks automatically. Depending on the solution it might also use machine learning to improve this process.
This method solves some of the limitations of the manual method. Especially the interruptions and effort needed while working. But it introduces two new issues: privacy and the effort of verifying afterwards.
You are giving full access to whatever you are doing and seeing. This might include confidential information. Some solutions promise to keep data locally but some of them are sending it to the cloud.
AI, such as machine learning, makes automatically assigning tasks more reliable. But there will always be a margin of error. This introduces the need to verify generated timesheets afterwards.
Advantages: no interruptions or effort needed while working.
Disadvantages: less accurate (at the beginning), privacy issues, verification effort needed afterwards
Sample-based time tracking
A third method is by periodically asking what you are doing. Daily Time Tracking is the first solution that has implemented this. It creates so-called "samples" when answering these questions. Accurate timesheets can be generated by combining these samples with other (automatically-collected) data. This data includes when you have started and stopped working, and when you have been away.
This method comes without the hassle of toggling timers or afterwards verifying timesheets. It also does not introduce any privacy issues.
Advantages: accurate, no privacy issues, requires no discipline.
Disadvantages: minimal interruptions while working.
Examples: Daily Time Tracking