Reducing Operational Costs with Efficient Time Tracking
Published: 09/09/2024
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In this article, we will explore ways of reducing operational costs. Namely, how to do it by implementing digital time tracking and being efficient with it. You will find that there are additional benefits too.
Does it feel like you are losing a big chunk of your budget on operational costs? Unfortunately, you most likely are. To fuel the frustration, you also understand there is no way around it. The tasks need to be carried out for the maintenance of the business functioning smoothly, whether you like it or not. But don’t feel disheartened for we have some great news for you. There is a way of reducing operational costs. Not only is it relatively simple but also brings a lot of additional perks to the table.
Efficient time tracking is an easily implemented measure to both lower operational costs and improve your business as a whole. It points out gaps in your strategy or where the communication friction points are. The best way to become efficient in time tracking is digitising it. Namely, adopting a timesheet solution.
Digitising timesheets may cost you the initial setup and a monthly subscription fee. But it’s an investment that will pay off. Here are some ways how digital timesheets reduce operational costs:
Less time goes into admin work;
Reports get generated within seconds, you just need to analyse them;
Customisation such as time rules/differentiating rates reduce the risk of errors;
They enable decision-driven resource allocation;
Centralised timesheets help spot issues such as time theft.
All in all, digital timesheets address many problem areas that rack up operational costs. They also enable ongoing optimisation, which means not only will you be able to fix existing issues but also continue improving moving forward.
Before you can start addressing the problem, you need to pinpoint and name it. A clear understanding of the issue is mandatory to begin looking for a solution. So, let’s explore what are the usual culprits behind operational costs.
The costliest mistakes in operations come from payroll. Finance-related inaccuracies are detrimental to your relationships with both clients and workers. Depending on the severity and the general nature of your communication, this may mean losing them entirely. Naturally, the loss of a client means a loss of revenue and securing a new one isn’t easy for some companies. However, parting ways with an employee is even more expensive. Namely, you will need to find a new candidate, leaving the position open as you look for them and carry out interviews. And even upon finding the right person, it will take a couple of weeks before they blend into their role and begin performing at full capacity.
Another problematic area that costs companies a lot is overtime. It can be difficult to calculate it sometimes. Especially if the rate differs based on hours/tasks/any other factor. Not only it’s breeding ground for errors, dangers of which we’ve already explained, but also a massive drain of your time. What’s more, when there is a mistake made, it usually won’t be noticed at once. This means all the calculations coming after will be inaccurate and will need to be voided. All in all, not only will you need to trace all the way back but to also redo everything that followed but now with the correct figures. Time is expensive. And overtime mismanagement costs a lot of it.
Did you know that neglecting time tracking reflects negatively on your account books? While it primarily leads to lost opportunities and unutilised resources, it can also lead to money-losing business decisions. Inaccurate or incomplete data is harmful in general, but when it comes to your most valuable asset, time, it is particularly bad. Think of it - how many vital parts of your business depend on time-related data?
The answer is quite a lot of them. One of the key ones is client billing and employee compensation. Get either of them wrong once and you will have to deal with the consequences of broken trust for a long time to come – and that’s in the best scenario. These errors are so crucial they can cost you your reputation, clients and team. If you want to prevent them from happening, time tracking is non-negotiable and it needs to be done right. Since most inefficiencies and mistakes occur due to human error, we strongly recommend digitising the process. There are plenty of time tracking solutions available - Timesheet Portal being one.
As stated in the beginning, the best way to get efficient with time tracking is by using digital timesheets. Not to mention, such an approach brings additional benefits to your company. Below, we will look into some of them.
Efficient time tracking is easiest achieved through using digital timesheets. And a designated solution brings more to the table than the name alone would imply. The key advantage is rather self-explanatory: easier and quicker processing of timesheets. As mentioned several times already, time is a valuable resource that shouldn’t be wasted. By saving time, you automatically reduce costs. In fact, if you reapply the said time in revenue-driving tasks, you might even generate income on top of cost reduction.
In addition to that, timesheet solutions bring onboard automation options that can help you both speed up and smoothen your workflows. And, as a cherry on top, they will provide you with insights you would otherwise have no access to. Speaking of that, digital solutions are naturally equipped with reporting modules that allow you to evaluate your progress in a digestible, visually simple way. It can help you highlight the areas where you’re spending too much, therefore relocating your resources and potentially reducing the said costs.
Now that we touched on the subject, there is a definite need to expand. Operational costs are often incurred through either exhausting resources in one area while neglecting multiple others or spreading it too thin across virtually everything. Either scenario drains your budget and stunts your overall growth. Efficient time tracking, on the other hand, means you will be able to easily spot where your issues lay and begin addressing them.
Digital timesheets offer a centralised view of both client-oriented projects and internal processes. This way you get to see patterns and do back-to-back comparisons, both of which enable you to act fast when making decisions to shuffle the resources. Such visibility means you can see clearly where the gaps in your strategy are and make adjustments accordingly. Very often resource allocation optimisation is akin to poking around in hopes of finding the perfect balance. With digital timesheets, it’s targetted, intentional and therefore efficient.
To top it all up, digital timesheets can help you solve issues most companies have deemed unsolvable. They will highlight the root of the issue rather than its consequences, allowing you to weed it out entirely.
Absenteeism, buddy punching and other ways of time theft are a massive drainage of your budget. The problem is that it’s difficult to spot these issues early on as they only manifest clearly after the damage is done. Thousands of companies are losing millions in revenue on an annual basis to time theft and are unaware of it. Putting prevention measures in place is the best course of action. Efficient time tracking is one of them.
When you stay in the know where every minute of your team’s time is going, you will spot the patterns as they emerge. That said, you will be in a position to address the issue before it causes any damage. What’s important to remember, however, is to approach the topic from a place of empathy and care instead of prioritising disciplinary actions. Figure out why your employees engage in these malpractices in the first place and work with them to eliminate the problem. This is the only permanent solution to time theft as a whole.
Although operational costs are inevitable, they can be reduced. Things that usually accumulate them the most, such as payroll inaccuracies, time tracking inefficiencies and overtime mismanagement can be solved with just one solution - digital timesheets. Although it is an investment, it pays for itself by saving your company time and money, all the while supplying you with actionable data. In other words, not only digital timesheets reduce operational costs, they help your business grow.
The insights gathered through efficient time tracking can help you optimise your resource allocation, ensuring you get the most worth out of your team and utilising their skills correctly. Additionally, they help you build smoother workflows that are a natural driver of progress. Finally, with digital timesheets being centralised and easily accessible, they are great for spotting behavioural patterns such as absenteeism. All in all, digital timesheets are the way to implement efficient time tracking. Which in turn leads to reducing operational costs.
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