The Proverbial Missing Horseshoe Nail: Timesheets

"For want of a nail the shoe was lost, For want of a shoe the horse was lost, For want of a horse the rider was lost, For want of a rider the battle was lost, For want of a battle the kingdom was lost, And all for the want of a horseshoe nail." -Traditional proverb

That sounds dramatic. But let me assure you that it is not.?

Today, I feel compelled to talk about timesheets because of my recent interactions with our customers. Three or four of?our customers invested in well-known enterprise systems like ERP, HRMs, CRM, etc. And when they needed a timesheet system, they shopped for third-party solutions.?

Aren’t timesheets simple? Filling in timesheets seems like nothing more than data entry.? They are merely the logs of hours of employees’ work. Does anyone care about how elegant a system log looks or about its functionality? One can also build a timesheet system using task automation platforms like Power Apps from Microsoft, etc. These companies went ahead and invested in their timesheet solutions in the above manner. They had all the software solutions, yet they faced numerous problems.

Here is what happened

1. While filling the timesheet, employees used project codes but they either didn’t know their allocation timeline or allotted hours or there was no control on what they filled in. For example, employees could book their hours, say 6 hours a day to bench instead of a particular project. This would underestimate project cost and cause underbilling.
2. In projects with multiple billing rates, the timesheet systems didn’t enforce the right bill rate. The concerned project manager needed to reconcile everything at the end of every month. This manual method led to missed billing, underbilling, or overbilling.
3. There was no control on employees booking their hours on weekends, during their leave periods, as over overtime, or as double pay time.? Local laws regulate certain policies regarding working hours.? For example, some countries stipulate that employees must be given compensation leave after continuous work of maximum allowable hours. Laws in some countries require double pay for work on weekends. Some customer contracts mandate calendars consistent with their own calendars. There were no controls or provisions for authorization for timesheet entries.?
4. Employees mentioned project codes, but there was no control on which tasks they book hours of day. Standalone timesheet systems didn’t enforce selecting appropriate tasks while booking hours. This made calculating efficiency of tasks difficult. Past data on task-wise hours (and cost) was unreliable. It couldn’t be used to improve efficiency or to estimate efforts in similar projects that follow.
5. Employees weren’t sure where to enter their leave - in HR’s leave system or in the timesheet system. In cases in which these were different systems, the user experience went for a toss besides the challenges of reconciliation of timesheet and leave data.
6. There was no way to distinguish the original work done for a task and from rework done later.
7. There was no control on how many days in the past or in the future one could fill a timesheet.
8. Timesheets needed to be approved by the reporting manager or the project manager. They found it difficult to check all timesheet entries considering the large number of people who filled the timesheet.

Each of the above sources of error can be plugged manually, but if you have thousands of people working on multiple projects, with multiple billing rates, in different legal jurisdictions, and according to multiple customer calendars the errors can accumulate and they did.

Worse, no one could have valid and updated data -almost every piece of information has an air of uncertainty.?

The proverbial missing horseshoe nail

At times, seemingly minor, mundane things have huge consequences. Their simplicity deceives us.? An hour of work by a skilled resource to complete a task is the basic building block of IT services. Many such work-hours combine to complete a task, deliver deliverables, and complete a project.

Every employee-work hour is important to determine cost and value addition. Every parameter like project cost, billing, margin, etc. is calculated by adding up employee-work hours. If you don’t ensure controls on how and how soon timesheets are filled, how billing rates are applied, how thoroughly they are reviewed, and corrected every business metric is potentially wrong.?

Timesheets are not just entries of data. They are critical for downstream processes like billing and revenue recognition. Standalone timesheet systems have serious consequences due to poor controls, lack of integration, and inefficient workflows. Your projects may appear to be more or less profitable than they really are. Your revenues can get inflated or deflated. Your profitability forecasts can prove to be quite wrong. Your project bids can prove to be too low for profitability or too high for winnability. You can get a wrong resource utilization forecast. Your resource allocation can go wrong. You may fail to bill work done on time and face cash flow problems. You might get a wrong picture of your bench cost. You may have to deal with nasty surprises in legal compliance and liabilities. You may face trust issues with your customers due to erratic billing. Tracking employee’s efficiency and expertise is difficult. Employee appraisals suffer from inaccurate data. This can demoralize people.?

The above proverb isn’t overly dramatic.

Your? timesheet system is the proverbial missing horseshoe nail! Poor timesheet systems may not cause a business failure, but their consequences can be very damaging.?

A timesheet system that syncs and fits perfectly with the enterprise platform is your solution.

A modern PSA platform digitizes your end-to-end processes. It provides controls on who, when, and how books work hours. It lets you build workflows and rules for their on-the-ground review ( by team leader, e.g.) and authorization by exceptions. It makes filling timesheets easy. A modern PSA can prevent all the errors and their consequences mentioned above. It improves your forecasting, planning, and execution.

The above criteria are very useful to evaluate a PSA software that would serve you well.

Kytes, an advanced PSA, has all the above functionality. To know more or watch a demo, please contact us at [email protected]