Smaller companies sometimes need to bring a higher added value than larger organizations and be even more agile and innovative. That is why the tools your choosing are pivotal to your competitive edge.

Track time automatically with zero effort

Timeular’s easy and smart experience, paired with its powerful reporting and leave-tracking functionalities, makes time tracking a delight.

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In this article, I’ll compile a list of the best small business tools that can empower and amplify your impact so your organization can thrive in the 2024 competitive landscape.

Whether you’re just beginning your entrepreneurship journey or an established small business owner, this article will help you make an informed decision.

The best small business tools in 2024

1. Timeular – Track 100% of your billable hours

Timeular is an automated time tracker that stands out with its smart, secure, and automated ways to track time, as well as its time-tracking cube.

Why a small business like yours should track time:

• Optimized processes: Time tracking apps enable small business owners and employees to gain insights into their time allocation, such as flaws in processes or time-consuming tasks. This will lead to better business operations, task management, and higher productivity overall.
• Increased profitability: Once you understand where your team’s time is sinking, you’re equipped with valuable data to speed up your entire operations. Time wasters in a business are the first indicators small business owners should consider, as small changes like these which require 20% of effort can lead to 80% of impact on your profitability.
• Fair, transparent billing: For businesses that bill their time spent on projects, an automated time management app provides you with the data needed for invoicing. It also gives leverage in price negotiations, if needed.

Why is Timeular a great small business tool? Because it allows you to:

• Automatically track time spent on each activity with a simple keyboard shortcut;
• Easily build a time-tracking habit with the physical tracking cube;
• Automate time reports with just a few clicks;
• Track PTO and employee leave absences with the leave tracker;
• Keep project budgets in control with budget notifications;
• Track overtime hours to keep your team balanced;
• Track billable and non-billable hours with a billable hours tracker;
• Integrate Timeular with over 3000 other tools of your choice;
• Store your data locally, with 100% GDPR compliance at the core.

“I would highly recommend Timeular for tracking time on small teams like ours. Timeular has been a game-changer for us, and we couldn’t be happier with our choice.”

Keith Reynolds, CEO of spokemedia.io

Track time automatically with zero effort

Timeular’s easy and smart experience, paired with its powerful reporting and leave-tracking functionalities, makes time tracking a delight.

Try Timeular 30 days for free

2. Asana

Asana is a top-rated project management software that organizes and manages tasks, projects, and teams more effectively.

This project management software helps you with:

• streamline workflows
• improve productivity
• enhance overall project management.

Asana provides a collaborative platform that enables teams to coordinate their work and track project progress. It’s among the users’ favorite small business tools for managing projects.

A big project can be divided into more manageable tasks, contributing to easier communication between teams.

Asana can be integrated with a variety of other tools, such as project management tools and collaboration tools, communication apps, file-sharing platforms, and more.

TIP: Read our post and find out why Asana is a top productivity app.

Setting up and configuring advanced features in Asana, such as dependencies or custom automation rules, may require some technical expertise or guidance.

When it comes to pricing, there’s the option of the Basic plan. After that, the Starter plan starts at 10.99$ per user per month and the Advanced plan at 24.99$ with the same conditions.

Integrate Asana with Timeular to track time automatically

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3. Zoho Invoice

One of the best tools for small businesses, Zoho Invoice, is a feature-rich invoicing software designed particularly for smaller-sized businesses.

With its intuitive interface, extensive functionality, and affordability, Zoho, this team collaboration software, offers a comprehensive solution for managing invoicing and billing processes.

This platform offers customizable templates, automated recurring invoicing, and online payment integration. It makes it convenient for clients to pay invoices and for businesses to track payments.

Another great feature offered by Zoho Invoice is the possibility of customizing invoice templates with a business’s logo and colors.

While Zoho Invoice offers a user-friendly interface, mastering all its features and settings may require some learning, particularly for users who are new to accounting software.

Another challenge that Zoho has to do with its customer support and the delays in getting assistance, however, Zoho Invoice is one of the free business tools on the market, allowing a free plan.

4. Wave

Wave is an all-in-one financial management small business software created with micro businesses at the core.

It offers a comprehensive suite of various tools for small businesses, including accounting, invoicing, receipt scanning, and more.

Wave is one of the best free tools for small businesses with limited budgets, as it gives access to multiple functionalities, among which some are free.

It provides essential features for managing income and expenses, generating financial reports, and tracking cash flow.

It also allows to scan and upload receipts, automatically extracting relevant data for expense tracking. Wave integrates with a wide range of banks.

While it’s incredibly helpful for small businesses for being free, it may not be as scalable or feature-rich as some other accounting software options.

As businesses grow and their financial needs become more complex, they may need to consider alternative solutions.

Using Wave still requires the purchase of add-ons. Invoicing and accounting services are free, add-ons for mobile receipts, or payroll, among others, start at 8$ per month.

5. QuickBooks

An effective RescueTime alternative, QuickBooks is a renowned accounting software that offers a comprehensive range of features tailored specifically for small businesses. With its approach, it has established itself as a trusted and reliable solution.

Offering a very user-friendly interface, one of the key advantages of QuickBooks is that it helps small businesses operate faster due to streamlining their accounting processes.

It simplifies tasks such as invoicing, expense tracking, and financial reporting. It’s quick and easy to create and send professional invoices, track customer payments, and automate recurring billing, which saves you valuable time and effort.

However, it can be among the business tools for users without a background in accounting or bookkeeping. It may take some time to master this platform completely.

When billed annually, prices start at 183.60$ per year, offering a 30-day free trial. If you’re not sure about the investment, it’s possible to go for a monthly plan.

6. ADP

ADP is a provider of human resources and payroll solutions, with a set of services tailored to the needs of small businesses.

It offers a robust platform and advanced features that aim to help small businesses manage and streamline HR processes. As well, it simplifies payroll management and ensures regulations compliance.

Using ADP’s services allows companies to perform payroll services, including payroll processing, tax management, benefits administration, and time and attendance tracking, among others. It offers scalable solutions that can adapt to the evolving needs of businesses.

TIP: Read our post to learn how to calculate payroll hours.

A big plus of ADP, which makes it a great tool, is that as companies grow and the workforce expands, ADP provides flexibility in adjusting the business processes of an organization. It allows adding new employees, adjust benefits, and incorporate additional HR modules.

It’s important to note that ADP’s services may come at a higher cost compared to some other HR and payroll software solutions.

The cost might be too high for businesses with limited budgets, and their integration options with other third-party systems may be limited.

ADP offers four plans for its payroll software, but unfortunately, the pricing is not public. The cost is based on the number of employees and the complexity of needs. You can get a quote by completing the pricing form on ADP’s website.

7. Slack

Slack is most probably among the best collaboration tools for small businesses, and it has revolutionized communication in the last couple of years.

This team communication and collaboration platform offers a wide range of features designed to streamline communication in a company, regardless of its size. Though, it’s preferred among organizations with a smaller headcount.

Its real-time messaging feature allows small business teams to communicate and collaborate seamlessly. Users can create channels based on different teams, projects, or topics, making it easy to organize discussions and keep conversations focused.

Another note worthy of mention for Slack is its integration functionality. It integrates with a wide range of third parties. So you’d be able to choose multiple tools to merge it with such as Google Calendar, Google Drive, Hubspot, Jira, and Zoom, among others.

Just like other digital tools, Slack is available on mobile, for both iOS and Android, and on desktop.

Slack’s robust search functionality ensures that important information and past conversations are easily retrievable.

Being loved by many teams worldwide, Slack enhances team collaboration, cooperation, and communication. It adds a sense of flexibility that is beneficial for small businesses with remote or distributed teams.

Hard to believe, but true, as it has such useful features, Slack is a free tool with limited integrations and message history for the free account. Prices for more complete plans start at 8.75$ per user per month.

8. Square

Square is a financial technology company that offers a range of tools and services created for small businesses.

It offers a user-friendly point-of-sale (POS) system, payment processing solutions, and management features.

It’s among the small business tools a tiny organization would need to run its operations and accept payments efficiently.

This tool offers various payment processing solutions, including credit card processing, mobile payments, and online invoicing. It’s also possible to use its inventory management features.

While Square’s basic POS system comes with a free plan, some advanced features and services may come at an additional cost. Customization is also limited with this tool, an aspect that may not be beneficial for some businesses.

There’s a Free plan available, followed by the Plus plan (29 dollars per month) and the Premium plan (custom fees).

9. Google Workspace

Google Workspace’s is one of the most powerful business tools for small businesses. The previous statement is proven by its high adoption: It’s used by 3 billion people, according to Google’s estimates at the end of 2023.

It has a variety of features at an affordable price: Docs, Sheets, Slides, Gmail, Chat, Drive, Meet, Calendar, Jamboard, Keep, and Forms.

With its cloud-based approach and seamless integration, Google Workspace provides small businesses with a powerful set of tools to manage tasks and commitments efficiently.

The Workspace fosters collaboration among team members by providing editing tools with real-time feedback and commenting features.

Google Drive offers secure cloud storage, enabling small businesses to store and access their files from anywhere, on any device.

All its features and tools allow small businesses to create and edit documents, spreadsheets, presentations, and schedules within a single ecosystem, increasing efficiency and minimizing the need for third-party software.

It offers flexible pricing plans, allowing businesses to pay only for the number of users they have, making it cost-effective for most small business owners and teams.

For businesses, prices start at around 6$ per user per month. As we mentioned, from here, prices increase according to the different features available and how many participants are to be included in the same project.

Concluding, Google Workspace is a versatile environment for small business growth with high impact.

 Increase business efficiency and profitability by adopting the best Google Calendar time-tracking integration

10. LivePlan

LivePlan is one of the best small business tools that helps to:

1. create professional business plans
2. track business plan progress
3. make informed strategic decisions.

It simplifies the process of creating a business plan by providing step-by-step guidance and customizable templates.

LivePlan helps small businesses outline their vision, analyze market opportunities and user behavior research, set financial goals, and develop strategies to achieve them.

A tool such as LivePlan is particularly interesting for entrepreneurs or small business owners who may not have extensive experience in business planning, especially when it comes to the financial aspects.

Its financial forecasting tools are also useful for creating detailed projections.

LivePlan provides features to track actual performance against projected financials and monitor small businesses’ progress.

However, it’s worth noting that while it offers customizable business plan templates, the range of industry-specific templates may be limited as well as its integration options with other software tools.

LivePlan’s subscriptions start at 20$ per month (Standard), while the Premium plan goes for 40$ per month.

11. BambooHR

BambooHR is among the most utilized small business tools for human resources management

This tool is designed to streamline HR processes and improve employee management, offering small businesses a centralized platform to manage essential HR functions, such as:

• employee data management
• onboarding
• time-off tracking
• performance management

The standout feature within BambooHR is its centralized database with employee information, being simple and quick to use. It allows for the inclusion of personal details, employment history, time-off balances, etc.

BambooHR is a valuable tool the pain of handling manual paperwork, clunky spreadsheets, or other people management tools.

BambooHR also helps simplify the onboarding and hiring process by automating tasks like paperwork, document collection, and policy acknowledgments. However, it doesn’t include built-in payroll processing capabilities.

Pricing for BambooHR is not clear, as the cost may vary based on the number of employees and the desired features. To find out the subscription prices, you must fill out a form on their website.

12. MailChimp

Mailchimp is a well-known email marketing platform. It is widely used, as it helps small businesses manage, build, and automate email marketing campaigns.

It offers a user-friendly interface and powerful tools, that allow for the creation of email campaigns, as well as the follow-up on their results.

Mailchimp empowers small businesses to connect with their audience, manage customer interactions, drive engagement, and grow their customer base. Its automation features are what make the difference for a small business.

Personalized email journeys created in the tool help save time and effort by automating repetitive tasks. Such tasks can be welcome emails, abandoned cart reminders, or post-purchase follow-ups.

Note: It’s important to mention that email marketing tools such as Mailchimp are not customer relationship management CRM. A CRM software example is Hubspot.

Mailchimp allows the segmentation of email subscribers based on various criteria, such as demographics, purchase history, or engagement levels, and provides detailed reporting of these campaigns.

While Mailchimp offers a robust set of features for most small businesses, there may be certain advanced features or integrations that are not available within the platform.

Businesses with specific and complex requirements may need to explore third-party integrations. It’s important to note that deliverability depends on factors such as email list quality, sender reputation, and adherence to anti-spam regulations.

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Why are small business tools so important?

Business apps and software are crucial for small businesses for several reasons, starting with a very important one:

They are needed to increase efficiency and productivity and promote growth.

Small businesses often operate with limited resources and manpower, so business tools automate repetitive tasks, streamline workflows, and enhance productivity.

By leveraging the right management tools, an organization can optimize its operations and keep it balanced and thriving.

Business tools such as the ones listed here are also key to helping small businesses survive. Many offer cost-effective solutions that eliminate the need for manual processes or hiring additional staff.

With the right task automation apps, you can automate tasks such as accounting, inventory management, or social media marketing. Moreover, such business tools help the organization build its online store with a simple website builder and manage its digital marketing with ease.

Aside from better time and management resources, the business tools you use in your small organization are also extremely valuable when it comes to gathering information. For example:

• time tracking will guarantee all billable hours are accounted for;
• accounting platforms help guarantee that taxes and other obligations are paid;
• marketing tools will aid in building brand awareness (and others such as understanding what social media posts work based on Google Analytics, etc.) ;
• a project management tool will ensure your projects are on track and you’re aware of any bottlenecks;
• HR tools keep every information about employees, and so on.

The customer data and insights gathered enable small businesses to adapt their strategies, identify opportunities, and stay ahead in a competitive market.

Small business tools like the ones listed help companies be professional, organized, and efficient organizations.

They can enhance customer experience, streamline customer communication, and deliver high-quality products or services. This image of professionalism can help small businesses compete with larger players in the market.

• Read: How to sell consulting services

Billable hours: what are and why they are important for your revenue

If you want to become a pro on billable hours, we advise you to read have a read in our post.

Read more

How do you choose the best small business tool?

Choosing the best small business tool, software, or application involves careful consideration of several factors: needs, ROI, budget, integrations, feedback and recommendations, etc

As always, the first concern must be identifying the business needs. Identify the areas where software can bring the most value and address pain points.

Prioritize your needs based on urgency and importance. Of course, to do this, you need a budget. Be realistic about what you can afford while also considering the potential return on investment the software can provide.

The key to keeping functionality at center stage is to look for software that offers the core features you need while also providing room for growth.

Ask the right questions, namely if the software you choose offers adequate documentation, training resources, and accessible customer support channels. Reach out to other small business owners in your industry to gather their feedback and recommendations. Word of mouth is many times the best reference.

To make it easier for you, here’s a list of criteria you should consider when choosing your tools:

• Cost-effectiveness: As budget constraints are often a concern for small businesses, choosing a free business tool or one at a smaller cost is pivotal. An example of such a tool is Google Analytics. It can provide valuable insights without adding extra expenses.
• Scalability: It’s important that your tools can grow with your business. Project management tools, for instance, should be able to handle more complex projects and team sizes without losing functionality.
• Ease of use: Tools should be user-friendly and require minimal training. This is particularly true for tools like social media management tools or email marketing platforms, where simplicity can significantly improve efficiency. Your business performance will depend on this ease of use.
• Integration capabilities: The ability to integrate with other tools is crucial. For example, a CRM tool should ideally integrate with email platforms or file-sharing systems to streamline workflows.
• Feature-rich: Tools should offer a comprehensive set of features that cater to various business needs. For example, optimization tools should provide a range of functionalities, from SEO to content optimization to understanding customer behavior on your website.
• Data-driven decision making: Tools should enable businesses to make informed decisions. Analytics tools, for instance, offer insights that can guide marketing and optimization strategies.
• Accessibility: Choose Ccoud-based tools or those that offer mobile support to increase accessibility, allowing team members to work efficiently from different locations.

Note, though your growing business could benefit from multiple platforms and tools like SEO tools, web development, or social media platforms, in this article, we tried to focus on software for small businesses with the highest impact.

Read also:

• AI examples in business
• Best AI tools for business

Conclusion

a small business owner, you’re aware of the impact a tool can bring and its vital importance in your organization’s scalability. The right small business tools can make a significant difference, empowering businesses to overcome challenges, streamline processes, and maximize their potential.

While each tool has its pros and cons, small organizations need to evaluate their specific needs, budget, and scalability requirements before making a decision. It would be best to consider professional courses online for your team if tools don’t make a difference.

The post The Best Small Business Tools in 2024 appeared first on Timeular.

In this article, you will learn:

• What are billable hours and non-billable hours (with examples)
• Why you should track billable hours and non-billable hours
• How to track billable time and non-billable time to improve your billing process
• How many billable hours you should work
• How to increase billable hours

Maximize your revenue by tracking every billable minute

“Was I really undercharging that much? It was an eye opener to actually see how much these hours of – it’s only a quick job – added up.” – Debi H., Digital Marketer

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What are billable hours?

Billable hours are the actual hours worked on a task or client project that can be charged to a customer. They are usually billed to the client at an agreed-upon hourly rate and are crucial in calculating the total cost of the service. Billable tasks cover all types of client work, including client phone calls and meetings.

Billable hours examples

Here are a few examples of billable time to make things clear:

• Legal professionals: In legal services, a billable hour is time spent on tasks such as legal research for a client, drafting legal documents, attending meetings with clients or other lawyers, appearing in court, etc. Explore more in the article: How lawyers track billable hours.
• Consultant: If you’re a consultant, you may bill your clients for time spent on tasks such as conducting specific research, preparing reports, analyzing data, developing strategies, and providing advice on business operations or management.
• Freelancer: If you are a copywriter, you may bill clients for time spent on writing articles, editing and proofreading; if you are an SEO freelancer, billable time activities will include keyword research or competitive analysis.
• Web developer: Web developers who may work for marketing or development agencies may bill their clients for time spent on tasks such as designing and building websites, testing and debugging code, and providing overall technical support.

What are non-billable hours?

Non-billable hours stand for time spent on tasks that cannot be directly billed to a client’s projects, and hence do not increase business revenue. Non-billable work is usually related to business operations and employee development.

Examples of non-billable tasks

Now, let’s see some examples of the most common non-billable work:

• Team meetings. Meetings that are held internally with your team members to discuss business operations, strategy, or internal processes of the company you work for are typically non-billable activities.
• Administrative tasks. Tasks such as answering phone calls, replying to emails, filing overall paperwork, and other administrative work count as non-billable work.
• Professional development. Training, attending conferences, or other professional development activities that can be considered an investment in your professional skills and expertise are non-billable activities.
• Marketing and business development. Efforts made by a professional or business to promote their services and attract new clients, such as attending networking events or developing marketing materials to generate leads and establish new business relationships, are considered non-billable time.

Hours spent on activities like those we just mentioned are not billed to the client as they’re not directly related to the work you do for them. Can you see the difference between billable vs. non-billable hours now?

Don’t miss a billable hour again!

“I have been using Timeular for almost 2 years now. It helped me keep track of my time, the billable hours to customers and gain business” – Fabian G., CTO

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Why you should track billable hours

By tracking billable and non-billable hours, you can:

• Analyze your profitability. By tracking billable hours you can better identify where costs should be reduced and make smarter decisions regarding pricing and resource allocation.
• Improve client invoicing. Get much more accurate client billing and make sure that each client’s invoice is accurate as customers are paying for the actual hours worked by you or your team.
• Ensure effective time management. Keeping track of total billable hours helps you to prioritize tasks and work on proper time allocation.
• Create robust client relationship. Being 100% honest and transparent helps build trust and establish a long and strong working relationship with clients.
• Track your utilization rate. Billable hours help you keep track of the utilization rate, which is the percentage of an employee’s available working hours that are spent on tasks billable to clients, reflecting their productivity.
• Keep track of billable hours overrun. Tracking billable hours helps monitor overrun rates by comparing actual time spent on a project to the estimated time, allowing for early detection and management of potential budget overruns.

TIP: Read our article and learn how time management is a good example of artificial intelligence in business.

Why you should track non billable hours

By tracking non-billable time, you can:

• Identify areas where administrative tasks and internal processes can be streamlined. Non billable time should not take up most of your team’s capacity.
• Improve workload management and ensure that employees are not overwhelmed with non-revenue-generating tasks.
• Improve cost management by getting a clearer picture of the true cost of doing business by accounting for all working hours.
• Track time spent on employee training and professional development to ensure continuous growth and skill enhancement.
• Make informed decisions about staffing, project planning, and business development initiatives.

Read: How to track time spent on tasks

How to track billable hours

Keeping track of each billable moment should be a standard practice in all businesses that provide services invoiced hourly (agencies, law firms, consulting companies, and freelancers). You can track billable hours in many ways, using timesheet templates, calendars, email, pen and paper, or… a time tracking software.

Tracking billable hours is much simpler than you think. Although it seems mundane, it’s pretty straightforward when you use Timeular. This time tracking software automatically collects all billable hours spent on specific projects.

Timeular is the most effortless billable time tracking software for teams and professionals who care about their productivity and want to track billable hours correctly. Timeular allows you to start and stop a timer for each task, generating insights and reports showing the time spent on each task and the money you can bill. You can filter, customize, and export the reports with a few clicks. How easy and convenient is that?

• Read a full guide how to calculate billable hours

Simple steps to start tracking billable hours:

1. Create a free trial account.
2. Add work tasks and assign a relevant client name.
3. Label each activity as billable or non-billable time.
4. Add billing rate to each activity.
5. Track time and automatically collect insights about billable time (presented in a clear billable hours chart).

When you track time with Timeular, you get immediate answers to questions like:

• Are we spending time only on profitable projects and clients?
• How much time do we spend on billable tasks?
• Do we have enough billable hours to keep our business running?
• What should be our hourly rates for specific tasks?

Automate billable hours tracking with Timeular

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How to calculate billable hours

Calculating billable hours is easy. You need to take how much you’ve worked and multiply it by your hourly rate. 

Billable hours = hourly rate x billable working hours

Check this out:

• Free timesheet templates
• Free billable hours templates

How to calculate billable hours – example

• Hourly rate: 40$
• Billable working hours: 20

Billable hours = 40$ (hourly rate) x 20 (billable working hours)
Billable hours = 800$

Tip: When using Timeular, add your hourly rate to each activity, and it will automatically calculate the total number of billable hours to be added in a client’s invoice.

What’s the most effective billable hours model?

Many professionals are wondering what are the perfect billable hours targets. Each case would be different, and the general rule is that the more, the better.

However, it’s already a great result if your total billable hours make up 60% or more of your work hours. To make it perfect, dedicate 80% of your time to billable activities and 20% to non-billable tasks. Setting and meeting billable hours targets is crucial for maximizing revenue generation, as it helps ensure that employees are focused on productive, revenue-generating activities.

If you are currently spotting more non-billable hours than 20-40% and fail to meet billable hours targets, try to identify each non-billable task, group them, and handle them in a specific time slot, leaving the rest of the week for billable activities.

How to increase billable hours

There are many ways for you to increase your billable hours smartly. Here are a few strategies.

• Improve time management with a time tracker: Use a billable hours software, such as Timeular, to accurately analyze how you spend your time and find ways to be more productive.
• Review your work process and optimize your habits: Review your current work habits and try simplifying your workflow to be more efficient and reduce the amount of non-billable hours.
• Take on additional tasks: It may sound super obvious, but logically, if you can take on more work, it’ll be much easier to reach your billable hour goals. Check with your client if there are additional tasks that can be incorporated into your day. Just make sure you do it rationally and don’t take more than you can handle.
• Raise your rates: This is another thing that sounds obvious, and it is! Increasing your hourly rates can lead to higher billable hours. Just bear in mind that if your goal is to raise rates, you should do so fairly not to affect your relationship with clients.
• Automate predictable tasks: There are tasks that we do every day that can easily be automated. Automating repetitive tasks frees up time to work on billable projects.

Just keep this in mind: it’s not all about increasing billable hours. It’s also about providing high-quality service to your clients and building long-term relationships so you can keep working with them in the long run.

Read: How to calculate hours worked

Recommended tools:

• Markup Calculator
• Margin Calculator
• Time Card Calculator

How can time tracking help you with billable hours?

As I just mentioned, there are many strategies to increase your billable hours. However, tracking your time is one of the most powerful tools to do it efficiently.

By tracking your time and looking at the insights, you better understand how you spend your time, identify your daily inefficiencies, and optimize your workflows.

Here are a few ways in which time tracking is key to increasing billable hours:

• You catch every billable hour: A survey found that missing or inaccurate billable hours cost businesses $63807 per employee per year, which means $7.49 billion daily for US professional services sector providers. With time tracking, you won’t lose any precious billable minutes.
• Identify billable hours clearly: Time tracking helps you count billable and non-billable hours more clearly. You might realize that your non-billable hours are more than the billable ones. With this awareness, you will prioritize billable work instead of non-billable and allocate your time more successfully.
• Assess project profitability: By comparing the amount of time spent on a project to the actual money you get from it, you can assess its profitability and make more appropriate decisions regarding similar projects in the future.
• Set achievable deadlines: By tracking the time and knowing how much time you spend on similar tasks, you can set more realistic deadlines for future projects and avoid overcommitting and exhaustion.
• Enhance workflow: When you check the reports you get from tracking time, you quickly identify areas of inefficiency in your workflow, allowing you to make changes to increase productivity. For example, suppose you realize you spend a lot of time on administrative tasks that cannot be billed. In that case, you can delegate or automate them.
• Bill your clients accurately: The detailed info generated when you track your time can assist you in billing clients correctly and avoiding undercharging.

Check out funny timesheet memes.

Track all your billable hours and charge more

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Conclusion

In conclusion, understanding billable and non-billable hours is crucial for businesses to track work hours and create accurate invoices precisely.

These concepts are applicable across various industries, including law, consulting, freelancers, marketing agencies, IT companies, etc.

By accurately tracking your billable hours, you can ensure that you’re billing your clients ideally, managing your resources effectively to maximize revenue and increase business profitability.

Additionally, time tracking is critical to track billable hours and one of the best ways to increase their number.

FAQ

You might be interested in the following:

• How consultants are compensated
• Free Time management planner templates
• How to increase revenue from existing customers
• The best client billing software

The post What Are Billable Hours? Their Importance for Your Revenue appeared first on Timeular.

There is a simple formula, too, to calculate working hours on paper or using a calculator.

Let’s examine different ways to calculate employee hours worked within a specific time period and how to create timesheets yourself.

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Automatically or manually. With a physical time tracker or keyboard shortcuts. Under 1 minute a day.

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How to calculate hours worked 

To calculate hours worked within a specific period, follow these steps:

Step 1: Determine the start time and end time

To calculate how many hours you or your employees worked within a day, week, or month, you need to precisely define the start time and end time of each work day of the tracked period.

This may involve referring to timesheets, job logs, or even using a work hours tracker that provides detailed information about clock-in and clock-out time.

For example: On Monday, John Watson started working at 8 AM and finished at 4 PM.

Step 2: Convert time to military time

Convert start and end times to military time (24-hour clock) to maintain consistency and avoid confusion arising from AM/PM designations.

To convert time to military time, add 12 to the end time (afternoon hours), and leave start time (morning hours) as it is.

For example: As John started work at 8:00 AM and finished at 5:15 PM, you will convert it to 8:00 and 17:15. 

Step 3: Convert to decimal form

Since work schedules often involve minute-level precision, and employers use the decimal format to calculate wages, it’s essential to convert the minutes into decimal hours.

To do this, simply divide minutes by 60.

For example: As John finished work at 17:15, divide 15 by 60 to get 0.25. This turns 17:15 into 17.25.

Step 4: Subtract start time from end time

With the start and end times in a 24-hour and decimal format, you can simply subtract the start time from the end time to determine the total work hours.

For example: As John started work at 8:00 AM (08:00) and finished at 5:15 PM (17:00), his total work hours amount to 9:15 hours (17:15 – 8:00 = 9:15). Now, let’s convert this to a decimal form: 9:15 –> 9.25.

Step 5: Subtract unpaid breaks

Unpaid breaks are typically deducted from total work hours to determine the net work hours, representing the actual time spent at work.

This final step is crucial for ensuring that employees are compensated fairly for their actual work hours.

To subtract unpaid breaks, identify the total length of the break and subtract it from the total work hours.

For example: As John worked for 9.25 hours and took a 30-minute lunch break (30/60=0.5), his net work hours amount to 8.65 hours (9.25 – 0.5 = 8.75).

Step 6: Calculate total hours worked for the pay period (week, month)

You’ve already learned how to calculate daily work hours. In order to calculate the total hours worked per week or total time worked per month, add the total hours worked in the particular period using the same formulas.

If you want to calculate employee hours worked per specific pay period, I suggest you switch to a time tracking software that will do it automatically.

Read: How lawyers track billable hours

Benefits and limitations of calculating work hours manually

Creating handwritten timecards is a simple and inexpensive way to calculate hours but it works fine only for those in freelance positions. Unfortunately, it’s not a time-efficient method to calculate work hours for teams.

Benefits:

• No need for training
• Inexpensive to implement
• No additional software required
• Suitable for remote or mobile employees

Drawbacks:

• Time-consuming to record and maintain
• Susceptible to errors and omissions
• Difficult to generate reports
• Not scalable for large teams or complex projects

Overall, handwritten timecards are a viable option for businesses with small teams or simple payroll needs. However, they are not the most efficient or accurate method of tracking employee hours. Businesses with larger teams or more complex payroll needs should consider using a work hours tracker.

• Read: How many work days in a year?

More time-efficient methods to calculate work hours

Time tracking apps

Time-tracking software automates the process of tracking and calculating the time spent at work, on different tasks, projects, or clients. There is no more need for paper timesheets, and all employee timecards are always at hand, available within one software.

Benefits:

• Smooth time reporting system
• Automated time tracking and user-friendly time tracking methods:
• Automatic tracking of non-billable and billable hours
• Tracking time spent on projects and tasks
• Tracking breaks
• Calculating overtime hours and overtime pay
• Integrations with calendars, project management tools, and HR software
• Can be used on desktop, mobile, and web
• Perfect for on-site and remote teams

Drawbacks:

• It needs basic training
• There are both paid and free options available

Some of the most popular and efficient time management tools include Timeular, a simple, smart, and secure time-tracking software that allows you to accurately track time spent on tasks without disrupting your workflow.

Spreadsheets

Are you a spreadsheet fan and want to use Excel or Google Sheets as your hours calculator? Why not! I’ve created a couple of free timesheet templates that you can use to calculate hours worked in Excel or Google Sheets:

• Monthly timesheet template
• Weekly timesheet template
• 24-hour daily timesheet template

Benefits:

• Flexible and customizable
• They can be used to track multiple projects and tasks
• It’s possible to generate reports and invoices
• They can be shared with multiple users
• They can be used on desktop, mobile, and web

Drawbacks:

• They can be time-consuming to set up and maintain
• Prone to errors
• Not user-friendly, messy, and clunky
• Not as secure as dedicated time tracking systems

Spreadsheets are a viable option for businesses with small teams or simple payroll needs. However, they are not the most efficient or accurate method of tracking hours worked. Businesses with larger teams or more complex payroll needs should consider using a solution such as a time tracking app.

Learn more:

• Excel time tracking
• Google Sheets time tracking

Time clocks

Time clocks are physical devices that employees use to clock in and clock out of work. They are a more reliable and accurate way to track hours than handwritten timesheets, and can also be used to track breaks and overtime.

Benefits:

• More reliable and accurate than handwritten timesheets
• Tracking breaks and overtime hours
• Integration with payroll systems
• They can be used with a variety of scheduling systems

Drawbacks:

• They can be expensive to purchase and install
• They require additional maintenance
• Not as portable as time-tracking apps
• Not suitable for remote or mobile employees

Time clocks are a good option for businesses that need a reliable and accurate way to track hours and might work well for businesses with a large number of employees or complex payroll needs. However, businesses with remote or mobile employees should consider using a time-tracking app instead.

Online time clocks

Online time clocks allow employees to clock in and clock out using computers or mobile devices. This method is more accurate and efficient than manual timesheets but it requires additional software and infrastructure.

Benefits:

• More accurate and efficient than manual timesheets
• Can track breaks and overtime
• Integrate with payroll systems

Drawbacks:

• Requires additional software and infrastructure
• They may not be suitable for all businesses
• They can be expensive to implement

Integrated payroll systems

Integrated payroll systems combine time tracking with payroll processing. This eliminates the need to manually enter time into payroll software.

Benefits:

• Eliminates the need to manually enter time into payroll software
• Improves accuracy and efficiency
• One tool to cover multiple needs

Drawbacks:

• Requires a more expensive payroll system
• They may not be suitable for all businesses
• Requires training

Read also: Why time management is important in a business

Track work time with zero effort or frustration

Automatically or manually. With a physical time tracker or keyboard shortcuts. Under 1 minute a day.

Try for free

FAQ

How to define work hours and overtime?

The definition of work hours can vary based on employment contracts, industry standards, and local labor laws.

• Regular work hours refer to the standard timeframe during which an employee is obligated to be present and perform job-related duties;
• Overtime occurs when an employee works beyond their regular work hours. To calculate a one-time overtime event, use the free overtime calculator. To track overtime regularly and automatically, try the Overtime Tracker.
• Part-time work involves an employment arrangement where an individual works fewer hours than a full-time employee, often less than 35-40 hours per week. 

Understanding these distinctions is crucial for both employers and employees to make sure you are compliant with labor laws, appropriate compensation for overtime, and fair treatment for part-time workers. 

How to calculate overtime pay?

Overtime pay usually exceeds regular hourly pay rate. For example, in the United States, overtime pay is typically calculated at 1.5 times an employee’s regular hourly rate for hours worked beyond 40 in a workweek.

Remember that the specific rules for overtime pay can vary based on employment agreements, employee classification, and jurisdiction. Certain states may have distinct overtime thresholds or rates, and some industries may have unique regulations. 

Learn more in the article how to calculate overtime pay.

The post How to Calculate Hours Worked: Step by Step appeared first on Timeular.

So, I’ve compiled a list of the best AI tools for business functions such as time tracking and leave management, sales, workflow automation, or streamlining social media management.

These are the best AI tools for business

1. Timeular to track time automatically and manage time off;

2. ChatGPT to aid in research and idea generation;

3. Canva to generate images for any business need;

4. Asana to manage projects with ease;

5. Jasper to create content in written formats;

6. Zapier to automate workflows between apps;

7. Notion to manage tasks and store knowledge;

8. Gong.io for sales teams that need insights faster;

9. Feedhive to streamline your social media presence;

10. Fireflies.io to capture any meeting notes;

Timeular for time tracking

Timeular is an effortless, smart, and secure time tracking app. It tops the list as it’s the only AI-powered time-tracking app with a physical tracking gadget and unique features like leave management.

It’s suitable for any business looking to manage time better and gain objective visibility into where its time goes without dedicating countless hours to time tracking. On the contrary, it’s for those who want to ditch manual timesheets and enjoy the time-capture process with a fully automatic tool while spending only one minute a day tracking time.

AI capabilities:

• AI suggested time entries: You can work without bothering to track time, and the AI tool will add time entry suggestions to your timesheet. It captures scheduled and past calendar events and tags them into an activity;

• Automatic time tracking: Timeular tracks apps, docs, and websites you’re working on and adds them to your timesheet. Note: it tracks automatically if you select this option, and all tracked data is visible only to you;

• Designed to notice personal productivity patterns, which are reflected in a dashboard visible only to the primary user. This helps to enhance productivity in a self-led way.

Security and privacy:

• 100% privacy and GDPR compliance: Though it’s a time-tracking app that tracks websites or apps used in the background, Timeular prioritizes data privacy. So, all data is stored on the user’s local device.

• Anti-surveillance policy: Employees track honestly only if they’re not monitored, and Timeular respects their privacy even more. That’s why managers can see an employee’s timesheets with a delay – at midnight on the same day

“People complain a lot less about time tracking now because of the easy interface of Timeular.”

Kaitlin Snow Seamons, Executive Creative Director at Harmon Brothers

Read the full story

Other notable features of Timeular:

• Clean, simple calendar-like interface makes it easy to track time;

• Suitable for enterprise time tracking, it offers features catered to both small, medium, and large teams.

• As a time reporting system, Timeular generates customizable and easy-to-digest reports to share with clients and investors or for any internal analysis to determine how much time is spent on tasks;
• Timeular is a billable hours tracker that lets you track billable hours with one click to use the data for streamlined client billing;
• As an overtime tracker, it captures overtime hours and deficit hours automatically in order for employees to keep a healthy work-life balance;
• As it provides a PTO tracker, you can easily manage all types of leaves in one place to ensure resource allocation, so it removes the need for a new PTO management tool;

• You receive automated alerts once you’re close to reaching a time budget with budget notifications to manage time better on projects and tasks;

• You can track time with the physical time-tracking gadget, which, once flipped on another side, starts tracking another activity. We have to say that it’s one of the most loved features among our clients.

Pricing:

30 days free plan (trial)
Personal: €6.30/user/month
Personal Pro: €9.60/ user/month
Team: €14.60/user/month (unlimited users)

“As a busy manager, I needed a leave tracker that was as efficient as it was user-friendly. Timeular exceeded my expectations with its simplicity and effectiveness. Managing leaves is now a breeze.”

Andrew W, Team Leader at a Marketing Agency

Give it a try 30 days for free

ChatGPT for research

ChatGPT has to be mentioned among other AI tools for business, as you can use it in many helpful use cases. That can be writing a renegotiation email, ideating for a blog post, or training the sales team with role plays.

The examples are endless with ChatGPT, but its main functionality can be translated into helping you generate ideas.

AI capabilities:

• Chat-like, simple interface for a smooth user experience;

• Highly adaptable and versatile as it ideates endlessly for you – impersonates customer behavior, creates a content strategy based on your prompts, and so many others.

• Emulates human-like conversations through its voice mode;

• Generates contextual outputs addressing your prompt requests;

• Supports over 50 languages, including English, French, Spanish, Dutch, Italian, and Japanese;

What to be wary of:

• The output should be double-checked, as the responses can be inaccurate or biased based on user inputs;

• The free plan is buggy and crashes, according to user’s feedback on the OpenAI community.

Pricing:

• Free

• Plus: $20/user per month

• Team: $30/user per month

• Enterprise: Custom pricing

The most effortless AI time tracker

Say goodbye to disjointed time and leave management AI tools. Timeular’s AI time entry suggestions, automated tracking, and smart productivity insights are linked within the same app.

Try Timeular for free

Canva for image generation

As I’m a huge advocate of this AI tool, I had to include it in this article.

Why? It helps me create some of the best AI-generated images as a non-specialist (AKA no graphic design skills, visual orientation, or color theory whatsoever).

You’ll discover that Canva is the simplest AI-powered app for generating images at a small investment in design resources. You can generate any visual for a blog post, social media posts, to presentations.

So, don’t worry. You can start creating visual marketing materials without being a design pro.

AI capabilities:

• Generate design templates out of text queries or uploaded photos;

• With the help of the AI generator, you’ll be creating presentations for an investor meeting, a client call, or good-looking product descriptions;

• You’ll obtain unique and differentiated imagery for your brand with the Magic Media feature, allowing you to create original images and videos based on text prompts;

• Get access to countless templates containing all design needs like logo creation, LinkedIn carousels, Facebook ads, and others;

• Transform one object into another by simply typing a text command, making your design alteration process quick;

What to be wary of:

• Most of its features are available only online, not without an internet connection or in the desktop app;

Prices:

• Free Plan

• Canva Pro: $14.99/month for a single user

• Canva for Teams: $29.99/month for the first five users

• Enterprise: Contact for pricing

Asana for project management

Asana might already be on your radar, or you might have used it. This project management app has recently implemented AI models. That’s why it gained its spot in the AI tools for business lists.

It has been a leader in its niche even before integrating artificial intelligence, but now Asana enables users to save time by automating repetitive tasks to another extent.

Just like other AI tools, Asana generates valuable insights so you can better control project outcomes and plan projects based on data insights rather than gut.

AI capabilities:

• Automatic project risks detection: Identifies automatically project risks and bottlenecks to help you control outcomes and adapt business processes if needed;

• Smart goals: Helps you generate smart project goals based on your previous goals and objectives;

• Smart answers: Ask away questions in the app and gain valuable insights to determine the next steps in your projects;

• Smart status: The generative AI software pulls from real-time work data insights for you;

What to be wary of:

• Compared to other tools of its kind, Asana still relies on a lot of manual work – an example is continually pushing back due dates manually in your backlog in order not to fall behind with your work.

Pricing:

• A free plan is available

• Paid plans start at $10.99 per month

Jasper to write content

Let’s be honest— the content creation process ( in this case, writing) is tedious and time-consuming. Hence, using an AI solution to generate text is a game changer.

Whether you’re a copywriter or business owner, you can use Jasper as your AI assistant to write blog articles, product descriptions, or opinion pieces.

However, I would highly recommend revising and fine-tuning your text, as Jasper is still in its infancy, like many AI tools.

AI capabilities:

• Emulates your brand voice: Jasper browses your website or landing pages about your product and services, decodes the brand voice, and produces content with that language;

• It gives you access to 50+ templates, even if you have minimal writing experience or writer’s block;

• Generates high-quality images, too, though it’s primarily a writing AI tool;

• You can quickly prompt it with your voice through its chat function;

• Jasper Everywhere, its extension, accompanies you in Google Docs and many other platforms and sends edit suggestions or just continues writing for you with its generative AI function;

What to be wary of:

• No free plan;

• Technical writing is not something you can use Jasper on, as it falls short of researching specific and very detailed information.

Check out the best AI tools for marketers to discover 11 effective marketing tools that can be added to your toolkit.

Pricing:

• No free plan: 7-day trial for paid plans

• Creator: $49/month

• Teams: $125/month

• Business: Contact for pricing

Zapier for app integration

Zapier is the ultimate automation tool that helps you interconnect any tool with another. It essentially is a third-party connector between any two tools you’d choose. The mandatory criterion, however, is for these apps not to be linked through a direct integration already, as it would be redundant to use Zapier.

In other words, Zapier helps you create workflows and integrations. All that is done in simple coding logic, if-then – no coding skills are required.

AI capabilities:

• Instant automation: Just mention what integration you need, and Zapier automatically creates the workflows between the apps;

• 6871 Platform integrations: The odds are that you can create virtually any automation between the apps of your preference;

• Filtering feature: This feature allows users to run filters only once specific conditions of the workflow are met

What to be wary of:

• The free plan offers limited options to create automation ( e.g. it allows only single-step automation, but in general, you’d need more steps to properly integrate two apps);

Pricing:

• A free plan is available 

• Paid plans start at $29.99 per month 

Read also: The best software to automate repetitive tasks

Notion for task management

With Notion, you can plan, manage, and execute projects, as well as manage and store your knowledge assets with ease.

Since implementing natural language processing features, Notion allows you to focus on your projects while the AI digs into your data. It fetches answers and connects the dots between business data points with ease, and you get an interconnected environment.

AI capabilities:

• Automatically extract valuable insights from your meeting notes in the form of key takeaways;

• Automate tasks with automatic to-do lists resulting from meeting notes;

• Its AI aids with task management by prioritizing work based on urgency and importance; It also automatically generates new tasks once others have been finished.

• Smart data pointing by quickly directing you to past entries that you might have even forgotten the folder it’s stored in.

• Auto-generated text drafts for when you’re out of ideas for brainstorming or writing a text

What to be wary of:

• Notion is customizable, but at the same time, it can be overwhelming. You’d need to enjoy structuring and organizing information first to enjoy all the options in Notion.

Tip 1: There are countless Notion templates that you can use to systematize your data.

Tip 2: Read about the concept of “building a second brain,” which also demonstrates how to organize your digital data in Notion and make it into your second digital brain.

Pricing:

• A free plan is available

• Paid plans start at $10 per member per month

Gong.io to simplify sales

Your business’s success has one of its foundations in the sales you’re closing. Gong.io addresses these needs with its new AI-powered features.

The primary utility of Gong.io is analyzing customer interactions with artificial intelligence and providing actionable feedback for sales teams. It will analyze vast amounts of customer queries and interactions of a sales team on your behalf so you can make data-driven decisions and strategies.

AI capabilities:

• Provides insights into customer preferences and needs in order to tailor future offers and increase chances of deal closures;

• Tags customer interactions through conversation analytics and stores call with different tags for easy access;

• Automatic suggestions with improvements for sales representatives based on call analysis;

• It integrates 100+ apps, including Salesforce, Zoom, and Microsoft Teams.

What to be wary of:

• Users report on Getapp.com that the search function is confusing and might take a while to track down a specific call;

• On the same platform.

FeedHive for social media

Within your toolkit as a business, you need to manage your social media presence, rank high in Google with SEO-optimized articles, and create content with customer data in mind.

FeedHive offloads some of these tasks so you can focus on better business operations and strategize to keep your competitive edge. FeedHive incorporates functionalities that automate content creation, recycling content, monitoring, and posting.

AI capabilities:

• Social media posts auto-generation with machine learning algorithms;

• Content recycling and re-purposing for better potential customer engagement;

• Automatic follow-ups for trending posts that amplify your reach on social platforms;

• It has predictive analytics on post engagement or followers’ growth;

• Suggests enhancements for content and audience reach, saving time from data analysis.

• Inbuilt AI chat with an assistant that comes up with ideas to improve your social media posts;

What to be wary of:

• Limited Integrations: Some clients complain on TrustRadius about the lack of integrations with Google My Business, TikTok, and Canva.

Pricing:

• Creator: $15/month (up to 4 social accounts)

• Brand: $22/month (up to 10 social accounts)

• Business: $69/month (up to 100 social accounts)

• Agency: $239/month (up to 500 social accounts

Fireflies.ai for note taking

A meeting notes assistant can be your savior if a customer disputes a price already settled in a call or you forget vital details for a client project mentioned during the intro call.

That’s where Fireflies.ai comes in. This AI tool generates meeting notes in real time and converts your calls into detailed notes.

Its AI assistant, known as Fred@Fireflies, joins your calls across all meeting platforms like Google Meet or Zoom, enabling you to have access to all that has been discussed.

AI features:

• Automatic call summaries: Creates meeting highlights and next steps, as well as adding clickable timestamps;

• Includes sentiment analysis performed by its machine learning algorithms to aid in identifying the tone of a meeting and highlight critical parts;

• Has versatile sharing options so that you can share the meeting notes of a call either via a link or QR code;

• Allows transcript editing, including correcting or commenting on transcripts;

What to be wary of:

• This AI software struggles to catch technical language, accents, or dialects.

• Its free version limits your storage allowance.

Pricing:

• A free plan is available 

• Paid plans start at $10 per month 

Other AI tools for business efficiency

We wrote about many AI tools for business in different articles, so here’s a brief list of what you’ll find:

• GitHub for writing code, Descript to create videos at scale, and Zen.ai for simple accounting in the Best AI tools for small business article;

• In the AI tools suitable for designers, we’ve included tools for tracking time to systematizing work to vector graphic tools;

• This guide covers 15 Best AI tools for Productivity, covering software tools for many business processes and functions;

The most effortless AI time tracker

Say goodbye to disjointed time and leave management AI tools. Timeular’s AI time entry suggestions, automated tracking, and smart productivity insights are linked within the same app.

Try Timeular for free

Conclusion

Regardless of the reasons you’re searching for AI-powered tools, be it enhancing your business operations, improving customer experience, or riding the AI revolution to keep your competitive edge, choose the tool that suits you best. That means choosing according to your needs and budgets and keeping in mind the learning curve of a tool, as well as its integration capabilities.

The post 10 Best AI Tools For Business Efficiency appeared first on Timeular.

In all honesty, it’s not rocket science to implement AI. But what requires more thinking when managing limited resources is what tool to acquire.

So, next up, you’ll learn what AI tools suit small businesses based on specific use cases and what criteria to look for in choosing your new AI apps.

Here are the tools you’ll learn about :

1. Timeular to track time and manage any leave type
2. Jasper AI to create content
3. Notion AI to manage projects and tasks
4. GitHub Copilot to write code
5. FeedHive to manage your social media presence
6. Descript to create video at scale
7. Canva to generate visual assets (imagery)
8. Zeni.ai to make accounting simpler

Manage and track time and leaves

For small businesses, time isn’t just a metric but rather a currency of success.

It’s fairly easy for small business leaders to jump on many opportunities and initiatives that can generate growth, but what’s pivotal is making sure you’re making data-driven decisions for your growth to be sustainable.

By tracking time diligently, both you and your team will learn to manage it better, but most importantly, it will help you answer questions like:

• Which tasks monopolize our resources, and how can we redirect energy and allocate resources for better outcomes?

• Is overtime creeping up on our team’s schedule?

• How do we optimize our team’s productivity without compromising work-life balance?

• Are we investing enough time in the right activities that align with our long-term goals?

• What are the initiatives we spent the least amount of time on but were the most effective?

You might want to read:

• AI in business examples
• AI tools for business
• Vital steps in adopting workplace automation

Timeular

Timeular is a pioneer in AI-powered time tracking, merging productivity enhancement with smart leave management.

As a 360-degree time tracking software it replaces disjointed tools serving one function only (e.g., only PTO management) and offers small businesses an automated and unified solution.

Awarded by Capterra for its intuitiveness as the “Best Ease of Use Tool in 2023” and recognized by its users, Timeular removes the guesswork from your data while it requires one commitment to track one minute a day.

“People complain a lot less about time tracking now because of the easy interface of Timeular.”

Kaitlin Snow Seamons, Executive Creative Director at Harmon Brothers

Read the full story

Timeular’s key features:

• Captures and adds AI time entry suggestions in your calendar for an honest overview of your time spent on tasks so that your calendar becomes an accurate reflection of your workday, client billing, and reporting;

• Tracks automatically your work in the background and adds apps, docs, and websites you’ve used in your timesheet once you’ve approved them;

• It’s designed to notice personal productivity patterns with AI, such as apps that sidetrack your efficiency or times you’re at peak productivity, and add them to a dashboard visible only to the primary user. Let’s be honest: as a small business owner, you don’t have time to micro-manage your team but rather empower them to remove roadblocks themselves;

• Time reporting system suitable either for client reporting or checking up on project profitability;

• Helps you stay within budget on projects with budget notifications, ensuring you never exceed the designated time and stay financially smart;

• It includes all-in-one tracking, from billable hours tracking with one click to PTO tracking and overtime tracking. Timeular does it without the need for additional tools.

The best part about Timeular?

The Timeular’s time-tracking tracking cube, which comes as an addition to the software – it’s a unique physical tracking device that isn’t just practical, but it turns time tracking into an engaging activity, leading to more precise input.

TIP: Timeular is an excellent time-tracking software for marketing agencies.

Pricing:

• Free 30-day trial

• Personal: €6.30/month per user

• Personal Pro: €9.60/month per user

• Team: €14.60/month per user

Embrace the most effortless AI time tracker

Say goodbye to disjointed time and leave management AI tools. Timeular’s AI time entry suggestions, automated tracking, and smart productivity insights are linked within the same app.

Try Timeular for free

Create content

Small businesses must use their thinly spread resources to the best of their ability. So, if you need to create content like social media posts, blog articles, or website landing pages, you need to look into AI tools for content creation.

By integrating AI tools to produce written content, you’ll save time that can be distributed to strategic endeavors, as writing is a tedious process.

Luckily, artificial intelligence made great leaps in its natural language processing capabilities and writes more like a human.

Jasper AI – writing tools for small businesses

The writing tool that addresses small business owners or marketing professionals’ distress in generating content ideas and skipping a blank page is Jasper.

It’s the fastest writing app I’ve used to date, and it promises to, in fact, help users generate content 10 times faster.

While it specializes in long-form content, you can find almost any social media content template, such as product descriptions and others.

Jasper’s key features:

• Jasper scans your website and learns your brand, products, or services and tone of voice;

• Produces content for a specific target audience based on your prompt;

• It generates images, too, so you could benefit from content and imagery in one platform;

• Gives you access to 50+ templates to get you started with minimal writing experience;

• Integrates with Grammarly, SurferSEO, and Copyscape;

• Its Extension, Jasper Everywhere, reads your texts across any platform and suggests edits or fills the rest of your text for you with its generative AI function;

Check out the best AI tools for marketers to discover 11 effective marketing tools that can be added to your toolkit.

Pricing:

• No free plan: 7-day trial for paid plans

• Creator: $49/month

• Teams: $125/month

• Business: Contact for pricing

Manage projects and tasks

The ‘teamwork makes the dream work’ saying resonates with small business owners more than it would affect a bigger business. Each and every team member in your organization adds to your growth and impact considerably.

Just like a task and project management tool that would impede your team from collaborating properly or would be too cumbersome to navigate.

The modus operandi of a PM system needs to allow small businesses to monitor progress at a glance and answer questions about projects without struggling.

Notion AI

Your projects are more than lists of tasks. They’re strategy documents, meeting notes, briefs, calls, and roadmaps. Notion interconnects all of them and helps you manage and access all data within one app in a less fragmented way.

With Notion, small businesses can plan, manage, and execute projects with more ease and at a lower price than PM tools, which don’t include such vast amounts of features.

Notion’s key features:

• Access to countless free or paid templates for managing any type of project, from a simple Kanban board similar to Trello’s to writing articles within the app.

• It helps your task management with its features that prioritize work based on urgency and importance, and new tasks are generated automatically once previous ones are done.

• With its AskNotion command, it helps identify any information in your project’s database by pointing you to specific data points;

• Generates automatic to-do lists and key takeaways based on meeting notes upon request;

• Get AI-powered auto-fills with meeting summaries, follow-ups, or project updates. It even generates summaries of articles from the web with its Web Clipper.

• Extracts insights from text-based data, analyzes data, and identifies common themes or patterns, allowing you to draw learnings from data efficiently.

Pricing:

• Free plan

• Plus: $8/month per user

• Business: $15/month per user

• Enterprise: Contact for pricing

• For startups, Notion offers 6 months for free, with all features included, based on an application.

Write code with speed

As a small business owner, you know how tedious and time-consuming it is for your one or two developer teams to write test cases, sample data, and other repetitive tasks as such. So, an AI tool is a game-changer as you need to grow, but more often than you’d like, you lack resources on the dev side.

An artificial intelligence code pair will process data, save time, and shorten development cycles so you can launch that new feature before your competition.

At the same time, AI coding tools are designed to anticipate coding needs at a way faster speed than people would.

GitHub Copilot

GitHub Copilot is an AI pair programmer that has increased in popularity among developers and is an affordable option for small businesses.

It assists teams with coding suggestions in real-time based on countless lines of code stored in the GitHub repositories. It comes as a Visual Studio Code extension and suggests snippets and functions as one type.

It is one of the AI tools, and the more it is used, the more it learns your preferences with its machine learning algorithm.

GitHub Copilot’s key features:

• Generates intelligent and alternative types of code tailored to a developer’s style, preferences, and usage patterns;

• It’s versatile across a broad range of programming languages and frameworks, which makes it suitable for any developer;

• Understands code context with the contextual code completion feature and produces relevant suggestions;

• Spots bugs and style lapses, proposing amends for clean code outputs;

• Integrates with Vim, Neovim, the JetBrains suite of IDEs, and others.

Pricing:

• Free

• Team: $3.67/month per user

• Enterprise: $19.25/month per user

Manage your social media presence

In today’s climate, having a robust social media presence is non-negotiable for small businesses, especially if you’re aiming to carve out a significant niche in your industry.

Social media isn’t just a platform for broadcasting. It fosters engagement, brand building, and customer interactions while processing large amounts of data to deliver the right message for the right customer needs on the channel.

Beyond the remarkable functionalities of AI-driven social media tools, it’s important to remember that your brand’s unique voice and narrative will foster a loyal brand community.

FeedHive

As small business owners often juggle numerous tasks, streamlining your social media management into an all-in-one AI tool might solve many business challenges.

FeedHive allows you to effortlessly manage your content creation with an easy-to-navigate interface that condenses hours of work into just a few clicks.

It helps you lower costs and combines many other fragmented social media marketing tools into one.

It incorporates functionalities that other marketing tools have not yet, such as automation for creation, recycling content, monitoring, and posting.

FeedHive’s key features:

• Auto-generates captivating posts using AI-generated suggestions;

• Recycles and re-purposes high-performing content for higher customer engagement;

• Triggers automatic follow-ups on trending posts that amplify your reach across all social platforms;

• Includes predictive analytics and customer insights on post engagement, follower growth, or hashtag performance;

• Suggests improvements in content and audience reach, saving time from data analysis.

• Has an inbuilt AI chat with a trained AI ready to come up with ideas and enhance social media posts;

Pricing:

• Creator: $15/month (up to 4 social accounts)

• Brand: $22/month (up to 10 social accounts)

• Business: $69/month (up to 100 social accounts)

• Agency: $239/month (up to 500 social accounts)

Create video content at scale

Video gains more traction for a business’s social media strategy, of course, depending on your industry and niche, but if you consider video content to be something you’d need to implement, automate this process as much as possible.

Descript

Descript is a game changer for small business owners who may not have extensive experience in video production.

Imagine having your video content transcribed into a written script by an AI-powered tool. With Descript, that’s exactly what you get. The best functionality of Descript is when you’re editing the transcribed text—any changes you make to the script are automatically reflected in the video itself.

Simply cut, paste, or delete parts of your text script, and you (AI tools) will produce a polished video in a fraction of the time.

Descript’s key features:

• Lets you create realistic-voice cloning voiceovers from written text based on its library of AI voices;

• Converts your video and audio content into text scripts, perfect for repurposing content across social media posts, blogs, and more;

• Lets you edit the transcript instead of the video, which requires technical skills – simply tweak the text transcript, and the AI will reflect it into your video;

• For all the moments you want to correct something you said in a video – Descript’s Overdub feature allows you to do it – type the correct text and watch as it seamlessly translates back into your video’s audio.

Pricing:

• Free plan available

• Creator: $12 per month

• Pro: $24 per month

• Enterprise: Contact for pricing

Generate visual assets

One of the most important assets in marketing, and not only, are compelling visual assets like images and presentations used in pitching or for investors and other purposes.

With audiences increasingly drawn to visually appealing content, leveraging AI tools for design creation doesn’t just streamline the creative process—it becomes essential for standing out.

AI tools for image creation enable small businesses to stand out and convey their unique selling points and their brand’s story effectively.

Canva

Canva, one of the best AI tools for designers, is a game-changer for creating eye-catching social media graphics with minimal design investment. With its recent AI features, Canva now makes it easy for anyone to craft stunning visuals to a whole new level.

You don’t need to be a design pro; Canva’s user-friendly interface empowers anyone on your team to create professional-looking imagery quickly and effortlessly.

Canva’s key features:

• Generate compelling images and presentations with simple text prompts to give your company a unique visual edge with Canva’s Magic Media feature;

• Instantly revamp your visuals by altering elements within images with simple text commands, thanks to Magic Edit functionality;

• Generate design templates from text queries or uploaded photos, streamlining your creation process.

• Create Powerpoints with the AI generator; whether you need it for a board meeting or a client meeting, this revolutionary feature offers up-to-date templates.

Pricing:

• Free Plan

• Canva Pro: $14.99/month for a single user

• Canva for Teams: $29.99/month for the first five users

• Enterprise: Contact for pricing

Make accounting simpler

Digging through spreadsheets to analyze data and understand your business’s profitability should be taken off your list.

AI tools for accounting can learn over time how to organize and tag your accounting data, automating this manual process you might otherwise have to do it yourself or have a specialist handle it.

Zeni.ai

Zeni.ai is designed for small and medium-sized companies, automating bookkeeping and expense tracking with an AI-powered dashboard​.

Zeni’s key features:

• Gain a comprehensive overview of your financial activities in a dashboard tailored to give you a bird’s eye view of your finances;

• Quickly digitize and organize your receipt data by simply sending it to a specific email address — Zeni’s AI will add it on record for you;

• Easily compare financial performance across different time frames such as monthly, quarterly, and annually to spot trends and track growth;

• Achieve better team collaboration by keeping them up to date automatically with alerts that sync across departments.

Pricing:

• Starter: $549/month

• Growth: $799/month

• Enterprise: Contact for pricing

What to look for in an AI tool for small business

Before making your decision and implement AI to foster growth and keep up with any future trends, you need to assess the following:

• Scalability: Don’t overlook the fact that as your business grows, your tools must grow with it, too. Before acquiring, assess the tool’s capability to expand alongside your business and surpass only the current needs of small businesses.

• Integration: Operating your small business efficiently is pivotal. Make sure AI tools integrate smoothly with your existing infrastructure, such as project management apps, marketing tools, and others;

• Data security: the more AI tools for small or bigger organizations appear, the higher the potential threats are. Double-check how AI tools prioritize your data security, compliance, and protection against potential threats.

• Ease of use: Choosing a tool that doesn’t require extensive training and has a gradual learning curve will help your team get quickly on board, and you’ll benefit from results in

• Price: Consider the return on investment over affordability. Choose tools that offer significant benefits without exceeding your budget but provide sustainable growth.

Conclusion

The integration of AI tools can augment human resources’ capabilities to a great extent, from intuitive time-tracking with Timeular to seamless content generation with Jasper AI. The democratization of AI offers affordable solutions to elevate your business, empowering you to foster sustainable growth.

The best advice is to implement tools that align with your vision and needs, whether for time management or task automation.

You might be interested in:

• Best task automation software

• Best AI tools
• Practical tips for effective time management
• Best tools for small businesses in 2024
• Time tracking for consultants
• How to sell consulting services

The post The 8 Best AI Tools For Small Business appeared first on Timeular.

Calculating labor costs offers a realistic view of each employee’s financial impact, aiding informed decision-making and the development of strategies to control or reduce expenses.

In this article, we’ll explore the labor cost definition, how to calculate labor cost, and how to reduce labor costs.

Looking for a smart and effortless way to calculate labor costs?

Start tracking employee time with Timeular!

Try Timeular for free

What is labor cost?

Labor cost is the amount of money a business spends on its workforce. This includes not only the salaries (direct labor costs) but also related expenses. Usually, an average labor cost includes fixed costs and additional costs beyond employee costs such as:

• Payroll taxes
• Medicare taxes
• Health insurance
• Employer retirement contributions
• Social security
• Life insurance
• Overtime hours
• Paid time off
• Bonuses
• Training costs
• Food costs
• Equipment and supplies (protective gear, uniform, cell phone, desks, chairs…)

What are the different types of labor costs?

1. Direct labor costs: These are expenses directly tied to the production of goods or services, such as wages paid to workers directly involved in manufacturing or delivering a product.
2. Indirect labor costs: Indirect labor costs includes wages for employees not directly involved in production, like supervisors, maintenance staff, or quality control personnel.
3. Overtime costs: This includes any additional wages paid to employees for working beyond their regular hours, often at a higher rate than standard pay.
4. Employee benefits: These encompass other expenses beyond wages, such as healthcare, retirement contributions, paid time off, and other perks provided to employees.
5. Training costs: Expenses related to training employees, including materials, instructors, and resources used for skill development or onboarding.
6. Labor burden costs: Additional indirect costs associated with employing labor, like payroll taxes, insurance, worker’s compensation, and other overhead expenses.
7. Contractor costs: Payments made to external contractors or freelancers for specific services rendered, which might involve a fixed fee or hourly rate.

Labor cost calculation with a simple labor cost formula

The labor cost formula is: Total Labor Cost = Total Labor Hours x Hourly Labor Rate

This formula calculates the overall labor cost by multiplying the total number of labor hours expended on a project by the hourly rate paid to each worker involved.

Direct and indirect labor cost: What’s the difference?

While direct labor cost relate solely to the salaries employees get paid, indirect labor cost are all the other benefits we mentioned above.

Even if some of them are not visible to the employees, they are still costs that the company has to consider when calculating an employee’s labor cost.

Why is labor cost calculation so important?

Labor cost analysis shows its significance in several areas of a business. Let’s analyze some of them to better understand why calculating labor cost is so important for any company.

Cost control and budgeting

Labor cost often constitutes a big portion of a company’s total operating costs. Analyzing the actual annual labor cost helps businesses understand and control how they spend their money, allowing for successful budgeting and financial planning.

Product pricing

Labor cost analysis plays a crucial role in determining the pricing of goods or services. By accurately calculating labor costs your businesses can set competitive prices, ensuring profitability.

Performance measurement 

Comparing labor costs against key performance indicators helps in assessing your workforce’s productivity and efficiency. It enables businesses to identify high-performing employees or teams and address areas that need improvement.

Read also: Managing high-performing employees

Strategic decision-making 

Labor cost analysis informs strategic decision-making regarding workforce management, staffing levels, and organizational structure.

It also helps businesses align their human resources with the overall business objectives and adapt to changing market conditions.

Resource allocation 

Companies can optimize their resource allocation by identifying areas where fixed labor cost can be better managed. This may involve restructuring teams, implementing training programs, or adjusting compensation structures.

Read also:

• Resource allocation in project management
• How can you avoid work overload?

How to calculate labor cost: Example

Three main methods can be used to calculate labor cost, depending on the analysis you wish to make and the field your business is in. They are the Hourly Rate Calculation, Labor Cost per Unit Calculation, and the Labor Cost Percentage Calculation

Below, we’ll explore each of them, explaining how they can be used and their business advantages.

Hourly Rate Calculation – direct labor cost formula:

This method allows you to calculate direct labor cost per hour of each employee. Consider the salaries and hours worked per month using this formula:

Hourly Rate = Salary / Hours Worked per Month

Example:

If an employee has a base salary of 1500 dollars/euros after taxes and works 168 hours per month, their hourly rate would be:

Hourly Rate = 1500$ : 168 = $8,92 

As we mentioned, to calculate total labor costs, you should also consider any indirect labor costs like potential benefits and taxes. Let’s consider $1000  in monthly benefits and taxes, and divide it by the number of worked hours.

$1000 : 160 = $6,25

If we add the two values, we’ll have the final hourly labor cost of an employee:

$8,92 + $6,25 = $15,17 

This method is beneficial if you use time tracking or if you want to calculate the actual labor costs of each employee individually. However, if you want to understand the overall weight each employee labor cost has in your budget, you might benefit from using a percentage calculation.

DOWNLOAD:

Free billable hours templates

Time management schedule template

Labor Cost Percentage Formula

The Labor Cost Percentages method is used to calculate the proportion of a company’s total expenses that is allocated to labor cost. It is calculated by dividing the total labor cost by the total expenses and expressing the result as a percentage. 

First, you need to add all the variable costs, relating to fixed labor costs during a certain time: salaries, benefits, and payroll taxes paid, among other factors. Then, you’ll identify the total expenses generated by the business during the same period for which you calculate the labor cost.

Once you have all the data, you’ll need to use the following formula to calculate labor cost percentage:

Labor Cost Percentage = (Total Expenses/Total Labor Costs) ×100

Example

Imagine your company’s total labor cost for a period were $100,000, and your total expenses for the same period were $500,000. Using the formula, you’ll get:

Labor Cost Percentage = (100,000 /500,000) × 100 = 20%

This means that 20% of your total expenses are entirely allocated to labor cost.

Even though this formula allows you to get a good overview of the overall labor cost your company might have, it still is a very broad metric, as it doesn’t give you a detailed value for each employee or department.

A good labor cost percentage typically falls within the range of 20-30% of total revenue, though this can vary based on industry and specific business factors.

Labor Cost per Unit Calculation

The Labor Cost per Unit is a method mostly used in the manufacturing and service-based industries, as it allows you to determine the average cost of labor required to produce a single unit of a product or service.

To calculate this metric, you’ll need to determine the hourly rate for your employees (which we’ve previously explained) and multiply it by the number of hours you need to produce a unit or complete a service, like this formula:

Labor Cost per Unit = Hourly Rate x Number of Hours to Produce Unit or Complete Service

Imagine an employee hourly rate of $15/hour, including all direct labor and indirect labor costs, and a service that takes 3 hours to be completed.

The formula would assume these numbers and give you the following result:

Labor Cost per Unit = $15 x 3 = $45

In this case, your Labor Cost per Service would be $45, which means it costs your company $45 to complete a specific service.

Factors that influence labor cost

Employee wages and salaries

The most direct and significant factor is the actual compensation paid to employees. Different roles, skill levels, and geographic locations can result in varying wage rates, which results in different labor costs.

For example, if your company’s roles require people with more knowledge and technical skills, you’ll probably have higher labor costs.

Overtime and shift differentials

Overtime and shifts can directly impact your labor costs. Overtime hours usually have their hourly rate, which is usually higher.

Likewise, in the case of shifts, your employees’ hourly rates may vary according to the type of shifts they work.

TIP: To calculate overtime hours, use our free Overtime Calculator. In case you need to track overtime regularly, switch to the Overtime Tracker.

Employee benefits and taxes

As we mentioned previously, employee benefits, including health insurance, retirement plans, paid time off, and other perks, contribute to the overall labor cost of a company.

The types and extent of benefits provided by the employer can impact costs in a significant way.

Training and development expenses

If your company offers training and development opportunities to its employees, it can also impact labor costs. Depending on the level of specialization your employees have, the labor cost percentage can be lower or higher.

You might be interested in:

• How to teach time management
• Top time management training courses
• Top project management courses
• Good courses to improve communication skills

Why is time tracking important for calculating and managing labor costs?

• Accurate payroll: employee time tracking data helps in accurately calculating their compensation. Whether it’s hourly wages or overtime pay, having precise records of time worked ensures fair and correct payroll processing.

• Cost allocation: the data provided by time tracking allows businesses to allocate labor costs to specific projects, tasks, or clients accurately. This helps in understanding the true cost of each project and ensures correct client billing.
• Productivity analysis: monitoring time spent on different tasks or projects provides insights into employee productivity. It helps identify inefficiencies, bottlenecks, or areas where additional training or resources might be needed.
• Resource management: Knowing how much time is spent enables better resource management. It helps in assigning tasks effectively, balancing workloads, and optimizing productivity by allocating resources where they are most needed.
• Cost control and budgeting: A time tracking app assists in controlling costs by revealing where resources are being utilized most and where they might be wasted. This information is vital for budgeting accurately and making informed decisions to manage labor expenses effectively.

Overall, time tracking is integral to understanding, managing, and controlling labor costs. It provides valuable data that aids in various aspects of business operations, from payroll accuracy to resource optimization and compliance with regulations.

Looking for a smart and effortless way to calculate labor costs?

Start tracking employee time with Timeular!

Try Timeular for free

Conclusion

Labor costs are a necessary expense to keep companies running, and employees should be fairly compensated for their work. However, even a necessary expense can be controlled using the right methods. 

Calculate your labor costs and analyze if they need to be lowered. If so, follow our strategies to achieve manageable, lower labor costs and maintain your business health in good shape.

Compensate your employees while keeping your financial goals!

FAQ

What is the significance of labor cost analysis?

Labor cost analysis can be used to control operating costs and budgets, determine product pricing, measure performance, efficient resource allocation, negotiations with employees, and strategic decision-making.

How can I control labor costs in my business?

To control rising labor costs, in your business, you can use many strategies, such as workforce and overtime management, using technology to aid in day-to-day tasks, and implementing programs to improve the quality of your employees.

• TIP: Start using a workforce management system to improve your business efficiency.

What is the formula for the labor budget?

To calculate a labor budget, you need to estimate the number of hours needed to finish the project and multiply that number by your hourly rate.

Are taxes and benefits included in labor cost calculations?

Yes, taxes and benefits are often included in labor cost calculations. When determining the total cost of labor, it is essential to account for various other expenses beyond just gross wages, or hourly rates.

How to calculate labor costs for a project? 

To calculate labor costs for a project, estimate the total hours needed for completion across all tasks, multiply by the hourly rate for each worker involved, and include additional expenses such as benefits or overheads, providing a comprehensive labor cost for the entire project.

Recommended tools:

• Timecard Calculator
• Markup Calculator
• Margin Calculator

How do you calculate the actual unit cost?

To calculate a unit cost, you need to use the Labor Cost per Unit formula, which is:

Labor Cost per Unit = Hourly Rate x Number of Hours to Produce Unit or Complete Service

How to calculate standard labor costs?

To calculate standard labor cost, you can use 3 methods, depending on the type of calculation you need: Hourly Rate Calculation, Labor Cost per Unit Calculation, and Labor Cost Percentage Calculation.

The post How to Calculate Labor Costs appeared first on Timeular.

This guide aims to clarify the differences between PTO and vacation and offer insights to help you make informed choices that suit your individual needs.

Easily manage all types of employee time off in one place: paid time off, sick days, time off in lieu, and many more

Try Timeular for free

What is PTO?

Paid Time Off (PTO) is a human resource management policy that encompasses various types of leave, including vacation, personal, and sick leave.

This consolidation offers employees greater flexibility and autonomy in determining how they utilize their allotted time off.

Purpose of PTO

The primary purpose of PTO is to enhance the work-life balance of employees by acknowledging that time away from work is essential for overall well-being. PTO recognizes that individuals may require time off for various reasons, be it for rest, personal obligations, or health-related concerns.

This approach reflects a more modern and inclusive perspective on leave policies, accommodating the diverse needs of today’s workforce.

Benefits of PTO

• Flexibility: One key advantage of PTO is its flexibility. Employees can use their accrued PTO days for any purpose, whether a planned vacation, a personal day to attend to non-work-related matters or an unexpected situation like illness.
• Work-life balance: PTO promotes a healthier work-life balance by acknowledging the importance of downtime. Employees can recharge, spend quality time with family and friends, or address personal matters without the stress of work responsibilities.
• Reduced presenteeism: With a comprehensive PTO policy, there is less pressure for employees to come to work when unwell, reducing the phenomenon of presenteeism. This, in turn, contributes to a more productive and healthier work environment.

Common PTO policies and accrual methods

• Accrual methods: PTO can be accrued based on the length of an employee’s service or through a more straightforward accrual system, where employees earn a certain number of hours per pay period.
• Usage policies: Employers may have specific guidelines on how PTO can be used, such as advance notice requirements for planned vacations or restrictions during busy periods.
• Accrual caps: Some companies impose limits on the maximum amount of PTO an employee can accrue to prevent excessive accumulation.
• Paid holidays: Some organizations include paid holidays as part of their PTO policy, ensuring that employees receive compensation for designated public holidays.

What is a vacation?

Vacation, a treasured component of time-off policies, refers to a designated period during which employees are granted leave from work to engage in leisure, relaxation, and personal pursuits.

The primary purpose of vacation is to allow individuals to recharge, unwind, and step away from the demands of the workplace.

Unlike the more encompassing PTO, vacation time is specifically earmarked for leisure activities, family vacations, travel, or any other activities that contribute to an individual’s overall well-being.

Benefits of vacation

• Relaxation: The core benefit of vacation lies in providing individuals with dedicated time to relax and detach from the stresses of their professional responsibilities. This downtime is crucial for mental and emotional rejuvenation.
• Rejuvenation: Vacation allows individuals to recharge their physical and mental energy, promoting improved focus, creativity, and productivity upon their return to work. It serves as a preventative measure against burnout.
• Quality time: Whether spent with family, friends, or in solitary reflection, vacation time enables individuals to foster meaningful connections and create lasting memories, contributing to a more fulfilling life outside of the workplace.

Read also: Coping with stress at work

Common vacation policies and accrual methods

• Accrual methods: Like PTO, vacation time can be accrued based on an employee’s tenure with the company or through a straightforward accrual system, where individuals earn a set number of vacation days per pay period.
• Usage policies: Companies often have guidelines for how vacation time should be requested and used. This may include advance notice requirements, especially for extended vacations, to ensure proper workflow management.
• Accrual caps: Employers may set limits on the maximum amount of vacation time an employee can accrue, encouraging regular usage and preventing excessive accumulation.
• Blackout periods: Some companies impose blackout periods, restricting the use of vacation during peak business times or specific seasons when a high level of employee presence is crucial.
• Use-it-or-lose-it policies: To promote regular breaks and discourage stockpiling of vacation days, certain organizations implement use-it-or-lose-it policies, where unused vacation days do not carry over to the next accrual period.

PTO vs vacation: The key differences

1. Usage

• PTO

Versatility: PTO is an umbrella term that allows employees the flexibility to use their accrued days for various reasons, including vacations, personal matters, or unexpected circumstances like illness.

Broad application: Employees can utilize PTO for both planned and unplanned absences, making it a more adaptable option for managing time away from work.

• Vacation

Specific purpose: Vacation time is specifically designated for leisure and relaxation. It is intended for planned breaks from work to rejuvenate and engage in personal activities, travel, or spend quality time with family and friends.

2. Accumulation

• PTO

Comprehensive accrual: PTO combines various types of leave, which may include vacation days, personal days, and sick leave. This consolidation allows for a more comprehensive approach to time-off accrual.

Unified bank: Accrued PTO is typically stored in a unified bank, providing a pool of hours or days that employees can draw from for different purposes.

• Vacation

Specific to leisure: Vacation accrual is specifically tied to leisure time, reflecting a more traditional approach to time-off policies segregating different types of leave.

3. Flexibility

• PTO

Adaptable usage: The flexibility of PTO lies in its adaptability. Employees can use accrued PTO for any purpose, offering a versatile solution that aligns with the diverse needs of a modern workforce.

• Vacation

Dedicated purpose: Vacation days are allocated for leisure and are not as versatile as PTO. While they contribute significantly to work-life balance, their application is limited to planned time away for relaxation.

4. Company policies and culture

• PTO impact

Companies with a PTO-centric approach tend to prioritize flexibility and acknowledge the diverse reasons employees may need time off.

PTO policies often align with a more modern and inclusive workplace culture that values work-life balance and individual well-being.

• Vacation impact

Organizations emphasizing specific vacation policies may foster a culture that values dedicated breaks for rest and rejuvenation.

Vacation-focused cultures may encourage employees to plan and take extended breaks to prevent burnout and enhance overall job satisfaction.

Understanding the differences in usage, accumulation, and flexibility between PTO and vacation is crucial for employees navigating time-off policies. The impact of company policies and culture further underscores the importance of aligning personal preferences with the prevailing ethos of the workplace.

Factors to consider when choosing PTO or vacation

1. Purpose of time off
   • PTO: If the need for time off encompasses various purposes, such as personal days, relaxation, and potential unforeseen events, PTO offers the flexibility to address these diverse needs.
   • Vacation: When the primary goal is rest, relaxation, and leisure, dedicated vacation days may be the more appropriate choice.
2. Flexibility requirements
   • PTO: Opt for PTO when flexibility in the usage of leave days is essential. This allows for spontaneous breaks or addressing unexpected personal or family matters.
   • Vacation: Designated vacation days may offer a more structured approach if planning and having a specific timeframe for relaxation is a priority.
3. Company policies
   • Consider the existing policies of your company. If the workplace has a strong PTO culture, aligning with this approach may be advantageous. Similarly, if the organization emphasizes traditional vacation policies, it’s essential to adhere to these guidelines.
4. Accrual balance
   • Evaluate your accrued balance for both PTO and vacation. If one balance is significantly higher than the other, it may influence your decision. For instance, if you have a surplus of PTO, it might be more practical to use those days for various purposes.

Scenarios and suitability

1. Last-minute plans
   • PTO: Ideal for spontaneous or last-minute plans, such as a sudden need for personal time or an impromptu day off.
   • Vacation: Better suited for planned breaks, especially for longer durations or trips that require advance arrangements.
2. Health and well-being
   • PTO: If you have health-related concerns or need intermittent breaks for self-care, PTO provides the flexibility to address these needs.
   • Vacation: For comprehensive rejuvenation and mental well-being, a dedicated vacation might be more suitable.
3. Family events
   • PTO: Valuable when you need time off for various family-related events, such as birthdays, graduations, or special occasions.
   • Vacation: Especially suitable for family vacations or planned trips where the focus is on spending quality time with loved ones.

4. Workload and project deadlines
   • PTO: When facing a high workload or tight project deadlines, using PTO for shorter breaks or sporadic days off can provide a breather without disrupting long-term plans.
   • Vacation: Ideal for longer breaks when you can ensure that work responsibilities are appropriately delegated or managed in your absence.

Read also: How to manage workload at work

Tips for effective utilization

1. Plan: Whether you opt for PTO or vacation, planning allows you to better coordinate your work responsibilities and ensures a seamless transition during your absence.
2. Communication: Communicate your time-off plans to supervisors and colleagues. Providing ample notice and keeping everyone in the loop helps manage expectations and workflow.
3. Balance accumulation: Regularly assess and balance your accrued PTO and vacation days. Strive to use your time off regularly to prevent excessive accumulation or potential use-it-or-lose-it scenarios.
4. Consider workload impact: Evaluate the impact of your absence on ongoing projects and workload. Choose the type of leave that aligns with the demands of your role, ensuring a smooth workflow during your time away.
5. Mix and match: Depending on your company’s policies, consider combining PTO and vacation strategically. This allows for a blend of flexibility and dedicated leisure time.
6. Reflect on personal needs: Consider your well-being and what type of break aligns with your current needs. Whether it’s a spontaneous day off for self-care or a planned vacation for extended relaxation, prioritize what contributes most to your overall happiness and balance.

By thoughtfully considering these factors and scenarios, individuals can make informed decisions when choosing between PTO and vacation, ultimately enhancing their work-life balance and well-being.

Conclusion

In unraveling the distinctions between Paid Time Off (PTO) and vacation, we’ve identified key factors influencing the choice between flexibility and dedicated leisure.

PTO’s adaptability caters to diverse needs, while vacation provides structured respite for planned breaks. Understanding the impact of company policies and aligning choices with individual needs is essential.

Whether opting for the versatility of PTO or the focused relaxation of vacation, readers are encouraged to consider factors such as purpose, flexibility requirements, and workplace culture. Effective utilization involves planning, communication, and maintaining a balanced accrual.

As you navigate your time-off decisions, remember that informed choices contribute significantly to a harmonious work-life balance, fostering well-being and professional satisfaction.

• TIP: Manage PTO and vacation like a pro with workforce management software.

FAQ

What is the difference between PTO and vacation?

PTO is a comprehensive leave policy that includes various types of leave, while vacation specifically refers to time off for leisure and relaxation.

Is it better to use PTO than vacation?

The choice depends on personal needs. PTO offers more flexibility, while vacation is dedicated to leisure. Consider your purpose for time off.

Can PTO be used for sick days?

Yes, PTO is often inclusive of sick leave. It provides flexibility to use accrued days for planned or unplanned absences, including illness.

How is PTO calculated?

PTO calculation methods vary, commonly based on years of service or accrual per pay period. Check your company’s policy for specific details.

How does vacation accrual work?

Vacation accrual involves earning a set number of days per pay period or year based on company policy and tenure.

Can I carry over unused PTO or vacation days?

Policies differ, but some companies allow the carryover of unused PTO or vacation days, while others may have use-it-or-lose-it policies.

Can I request PTO or vacation in advance?

Yes, advance notice for time-off requests is common practice. Check your company’s policy for specific guidelines.

Can I be forced to work during PTO or vacation?

Generally, employers cannot force employees to work during approved PTO or vacation days. Respect for personal time is standard practice.

What does PTO mean for holidays?

PTO policies may include or exclude holidays. Check your company’s policy to understand if holidays are part of your PTO allocation.

Should I track my time off?

Yes, tracking time off is crucial for managing accrual balances and ensuring compliance with company policies.

What happens if I don’t use my vacation days?

Policies vary, but unused vacation days may be forfeited, or some companies may allow a carryover. Check your company’s specific guidelines.

You might be interested in:

• Causes of stress in the workplace
• How to calculate overtime pay
• Top employee leave management system
• Remote work essentials
• Benefits of quick decision-making
• Calculating work hours
• AI business examples

The post PTO vs Vacation: What Are the Differences? appeared first on Timeular.

This article is your go-to guide for tracking hours worked, crunching the numbers for total hours, and making the whole process a breeze with nifty tool like a time-tracking app.

Dive into our step-by-step guide to discover how to calculate payroll hours.

Looking for an effortless, smart and secure Payroll Tracker?

Track all work-related time matters in a single place: working hours, overtime and leave.

Try Timeular for free

What are payroll hours?

Payroll hours are a critical part of the payroll process and refer to the total amount of time that an employee has worked during a specific pay period.

This time is typically measured with a payroll tracker in hours and minutes, and it may include overtime calculations and paid time off, such as vacation or sick leave. Payroll hours are usually used to calculate gross pay, calculate overtime hours, and comply with labor laws.

• Check out: Enterprise time tracking by Timeular

The importance of tracking employee hours

Tracking employee hours is a crucial practice for businesses of all sizes. A tool like team time tracker by Timeular serves several important purposes, including:

• Accurate payroll management: Employee time tracking ensures accurate payroll calculations, ensuring employees receive their wages correctly, including overtime pay, bonuses, and other compensation. 
• Enforcing labor laws: Time tracking helps organizations comply with labor laws, such as the Fair Labor Standards Act (FLSA) and local wage and hour regulations. By maintaining accurate records, employers can avoid costly fines or legal challenges related to unpaid overtime, minimum wage violations, or improper recordkeeping.
• Project management and resource allocation: Tracking employee hours provides valuable insights into how time is being spent on projects. This information helps managers identify potential inefficiencies, optimize workflows, and allocate resources more effectively.
• Time reporting, cost control, and budgeting: Time tracking data helps businesses track project costs and identify areas where expenses can be reduced, which is essential for financial planning and project budgeting.
• Absence management and attendance tracking: Tracking employee leave absences (sick leave, vacation, personal days) provides insights into workforce patterns and helps HR departments manage absences effectively (Read: Best Attendance Tracker Apps).
• Performance evaluation and recognition: Time-tracking data can be used to evaluate employee performance and identify areas for improvement. This information can also be used to recognize and reward high-performing employees.
• Data-driven decisions: Time-tracking data can be used to identify trends, patterns, and areas for improvement in various aspects of the business, from productivity and project management to employee engagement, which helps businesses make informed decisions that enhance overall performance.
• Compliance with project contracts: When working on projects for clients, time tracking ensures adherence to project contract timelines and budgets. This helps maintain client satisfaction and avoid potential disputes.
• Tracking overtime: An overtime tracker provided within time tracking apps helps identify instances of overtime, ensuring fair compensation and compliance with labor laws. 

For one-time payroll hours calculations use our free Time Card Calculator.

• Check out: Enterprise time tracking by Timeular

Common challenges in calculating payroll hours 

Calculating payroll hours accurately can be a complex task, especially for businesses with a large or diverse workforce. Several challenges can arise during the payroll calculation process, potentially leading to inaccuracies, errors, and compliance issues, such as:

Manual data entry and errors

There are several challenges when your employees manually calculate hours worked. Manually entering hours worked or using spreadsheets to calculate overtime hours can introduce a high risk of errors.

Human error in transcribing all the hours, manually calculating hours worked, or applying deductions in decimal format can lead to inaccurate payroll checks, miscalculations of overtime pay, and missed deductions.

Dealing with fluctuating pay rates and schedules

Employers handling employees with diverse hourly wage, shift schedules, or overtime threshold encounter the challenge of precisely computing hours for payroll.

Employees with non-standard work schedules, such as split shifts, irregular hours, or compressed workweeks, require careful attention to calculate their pay accurately.

• Read also: How to schedule employees effectively

Juggling multiple pay rates, calculating average hours, and factoring in unpaid breaks for hourly workers can be a time-consuming process within the payroll system.

Moreover, manually calculating hours worked adds a layer of complexity, increasing the likelihood of errors. For this reason, employees favor payroll solutions like automatic time clock app.

Tracking time off and paid leaves

Accurate tracking of time off, vacation, sick leave, and other paid leaves is crucial to calculate total work hours correctly.

Manually managing time off records can lead to data entry errors, missing records, and inaccurate payroll calculations.

For this reason, an all-in-one online solution for tracking working hours and time off in one place is recommended.

TIP: Read our blog to discover the top employee leave management system.

How to calculate payroll hours 

There are three primary methods for calculating payroll hours: manual calculation, using online time clock apps that integrate with payroll solutions, or directly through payroll solutions.

What is important to note is that before calculating payroll hours, you need an accurate system to track your employees’ worked hours. 

To ensure employees buy-in and timesheet accuracy, you need an effortless and smart time tracking app supercharged with automation. Additionally, keep in mind that employees will only track time honestly if they don’t feel monitored in real time.

Manual calculation

This method involves manually recording employee timesheets, calculating overtime, and applying deductions. It’s usually performed in Excel or Google Docs.

It represents the most fundamental time tracking method, also being the most time-consuming, error-prone, and lacking automation. Consequently, it is less suitable for businesses with a large or diverse workforce.

Resources:

• Time-tracking spreadsheet templates
• Time allocation templates
• Free billable hours timesheet templates

User-friendly time clock software

A time clock app like Timeular automates the process of recording and calculating employee hours, reducing the risk of errors and making payroll processing more efficient.

Timeular provides several different, user-friendly time tracking methods, including automatic time tracking, a physical time tracker, or tracking time with keyboard shortcuts. Each method reduces daily time tracking to under 1 minute!

What’s more, unlike many other time clock apps, Timeular is fully compliant with GDPR regulations, ensuring that user data is protected and privacy rights are respected.

Additionally, it has a 24h delay for time entries to appear on the managers side, which prevents micromanagement.

Time clocks typically integrate with your payroll tool to automate payroll generation, and Timeular does, too. Check the integrations page.

Payroll software

Payroll tools usually provide several in-built features, including time tracking, deduction management, and payroll calculation. It eliminates the need for manual calculations and reduces the risk of errors.

However, as payroll software is usually created for payroll experts and not for employees who are tracking time daily, it tends to overcomplicate the time tracking process. This, in turn, results in inaccurate timesheets which leads to delayed or incorrect payments.

Hence, we highly recommend choosing user-friendly time clock software that your employees will genuinely enjoy using, and seamlessly integrating it with the payroll app.

How to manually calculate payroll hours

1. Collect timesheets or timekeeping records

Request your employees to record their clock in and clock out time dilligently.

Gather timesheets from all employees, ensuring they are accurate and complete. Check for any missing or incomplete timesheets and request them from employees promptly.

Ensure timesheets are submitted within the designated time frame to avoid delays in payroll processing. If the employee noted 4 hours and 13 minutes, use the exact number for their payroll.

2. Review and verify employee hours

Scrutinize timesheets for any inconsistencies or discrepancies. Verify that the recorded hours align with the employee’s regular work schedule and any approved absences or overhours.

Investigate any unusual or excessive hours to ensure accuracy and compliance with labor laws.

3. Calculate hours worked

Determine the employee’s regular workweek based on their employment contract or company policy.

Multiply the regular workweek by the standard work hours per day, typically 8 hours. Subtract unpaid breaks or meal periods when calculating regular hours.

Resource: Employee work schedule template

4. Handling overtime hours

Identify total hours worked beyond the regular workweek (i.e. 40 hours per week) or more than the standard work hours per day.

Calculate overtime pay by multiplying the overtime hours by the overtime pay rate, typically 1.5 times the regular pay rate. Ensure overtime hours are compliant with labor laws and applicable exemptions.

Read also: Overtime calculation formula

5. Accounting for breaks and meal periods

Exclude unpaid breaks and meal periods from regular and overtime hours calculations.

Clearly define the duration and frequency of breaks and meal periods in company policies or employee handbooks. Documented approved breaks and meal periods on timesheets to maintain transparency and accuracy.

6. Calculating total payroll hours

Add regular hours to overtime hours to determine the total payroll hours for each employee.

Ensure the total payroll hours accurately reflect the employee’s work for the pay period.

7. How to convert minutes for payroll

Round minutes to the nearest quarter hour or tenth of an hour, following company policy or payroll software settings to maintain consistency and avoid discrepancies in payroll calculations.

Additionally, ensure to convert time to decimal form when calculating the gross wage, using the sum function based on the total number of hours worked.

Best practices for manual payroll hours calculation

While manual calculations can be time-consuming and prone to errors, following best practices can help ensure accuracy and efficiency. Some key steps to consider:

1. Ensuring timesheet accuracy

Timesheets function as the foundation for payroll calculations. Thoroughly reviewing and verifying timesheets is crucial to ensure that the recorded hours reflect the actual time of work performed by each employee.

This involves checking for inconsistencies, missing data, and discrepancies between timesheets and other records.

Read also: What are manual timesheets?

2. Understanding wage and hour laws

Accurate payroll calculations must comply with applicable labor laws, including the FLSA. Understanding these laws is essential to ensure that employees are paid correctly for their hours worked, including overtime, minimum wage, and break requirements.

3. Verifying employee classifications

Employee classifications determine their pay rates, overtime eligibility, and other compensation factors.

It’s crucial to accurately classify employees based on their job duties, responsibilities, and tenure, especially because misclassification can lead to legal issues and financial penalties.

4. Double-checking calculations for accuracy

Manual calculations are prone to human error, so it’s essential to double-check and verify the accuracy of all payroll calculations. This includes reviewing overtime calculations, deductions, and total pay amounts to reduce the risk of errors.

Recommended tools:

• Markup Calculator
• Overtime Calculator

Streamlining payroll hours calculation with software

Since manual payroll hours calculation can be extremely time-consuming and not appropriate for bigger companies, payroll software has become a very useful and valuable tool to optimize and ensure accurate calculation. 

Benefits of payroll software

1. Automation and time-saving features

Payroll software can automate many of the manual tasks involved in payroll processing, such as timesheet entry, payroll calculations, deduction calculations, and paycheck generation.

This automation can save businesses a significant amount of time and effort, freeing up staff to focus on more strategic and value-added activities.

Read also: What are the benefits of workplace automation?

2. Accuracy and error reduction

Manual payroll processes are prone to errors, which can lead to inaccurate paychecks, missed deductions, and compliance issues.

Payroll software eliminates the risk of human error by automating calculations and using built-in checks and balances. 

3. Compliance with labor laws

Payroll software helps businesses stay compliant with complex labor laws, including minimum wage requirements, overtime pay rules, and tax regulations.

The software automatically calculates and applies deductions based on employee data and pay rules, ensuring businesses adhere to all applicable regulations.

4. Reporting and analytics capabilities

Payroll software provides valuable reporting and analytics capabilities that can help businesses gain insights into their payroll data.

This information can be used to identify trends, track expenses, and make informed decisions about compensation and payroll practices.

TIP: Discover the best software to automate repetitive tasks

Choosing the right payroll software

Navigating the range of available payroll software options can be daunting, but selecting the right solution is crucial for streamlining payroll processes, optimizing efficiency, and ensuring compliance with labor laws. 

1. Features to consider

When evaluating payroll software, carefully consider the following key features to ensure it aligns with your specific needs:

• Ease of use – it’s key!
• Automated calculations
• Integration with HR systems
• Compliance with labor laws and requirements
• Reporting and analytics
• Security and data protection

2. Popular payroll software options

• Timeular: It’s a time clock software that puts simplicity first. In an effortless, smart and secure way it lets you and your team track all work-related time matters in one place (working hours, overtime and leave). It provides multiple effortless time tracking methods that cater to the needs of different users, making time capturing fast and enjoyable.
• ADP Workforce Now: ADP Workforce Now is a comprehensive Human Capital Management (HCM) platform that provides a wide range of features for managing payroll, benefits, HR administration, and workforce management. It is designed for businesses of all sizes, from small organizations to large enterprises.
• Rippling: Rippling is a comprehensive payroll, benefits, and HR platform that simplifies and automates various aspects of employee management. It offers a wide range of features, including automation, multiple integrations, and a wide range of benefits administration capabilities. 
• Gusto: Gusto is a payroll and people management platform that helps businesses streamline their payroll processes, manage HR tasks, and stay compliant with labor laws. Its main features include multiple integrations, paycheck generation and delivery, employee onboarding and offboarding, and more.

3. Implementation and training

Selecting the right payroll solution is not the end of the line; instead, it is the first step to successful implementation. Here are some key considerations:

Choose a reputable vendor: Partner with a reputable vendor that offers comprehensive onboarding, training, and support services. 

Conduct a thorough needs assessment: Clearly define your payroll needs and requirements before selecting software and implementing it.

Provide training to employees: Offer comprehensive training to payroll administrators and employees involved in the payroll process.

Establish clear roles and responsibilities: Define clear roles and responsibilities for payroll processes to ensure accountability and efficiency.

Monitor and evaluate performance: Regularly monitor the performance of the new payroll software and identify areas for improvement.

• Related content: Read “AI in business examples” and find out how AI helps HR.

Conclusion

As we’ve seen through this guide, calculating payroll hours is a very important and sensitive task in an organization and requires attention and proper tools for accurately tracking employee worked hours.

By following this guide, you will ensure more accurate payroll hour calculations and an easier and more automated process.

FAQ

1. How do I calculate payroll hours for hourly employees?

Calculating payroll hours for hourly employees involves several steps, including collecting timesheets or timekeeping records, reviewing and verifying employee hours, calculating regular and overtime hours, accounting for breaks and meal periods, and calculating total payroll hours. 

2. What is the best way to track employee hours?

The best way to track employee hours is by using accurate time-tracking software that can help you automate the process of recording employee hours, such as Timeular.

3. How do I handle overtime calculations in payroll?

To handle overtime calculations in payroll, identify and track hours worked beyond the regular workweek, calculate overtime pay, reconcile with labor laws, exclude meal and break periods, handle exempt and nonexempt employees, automate calculations, review and verify, maintain records, and seek guidance when needed.

4. Are breaks and meal periods included in payroll hours?

No, breaks and meal periods are not included in payroll hours. Breaks are typically unpaid and are intended to allow employees to rest and recuperate from their work.

5. Can I use Excel for payroll hours calculation?

Yes, you can use Excel for payroll hours calculation, but it may not be the best option for larger businesses or those with complex needs. Payroll software is usually more efficient and user-friendly, and it can handle the complexities of payroll calculations for large or regulated businesses.

6. What are the consequences of inaccurate payroll calculations?

Inaccurate payroll calculations can lead to legal trouble, financial penalties, lost wages, reduced productivity, and damaged relationships for both employers and employees. To avoid these consequences, employers should use payroll software, train employees, review payroll records regularly, and conduct audits.

7. How often should payroll hours be calculated?

Payroll hours should be calculated as soon as possible after the pay period ends. This will help to ensure that employees are paid on time and that there are no errors in the payroll calculations.

8. What are the legal requirements for payroll hour tracking?

The legal requirements for payroll hour tracking vary from country to country. The FLSA, for example, requires employers to keep accurate records of employee hours worked and to pay overtime to non-exempt employees who work more than 40 hours in a workweek. 

9. How can payroll software simplify the payroll process?

Payroll software can simplify the payroll process by automating many of the tasks involved, such as calculating wages, deductions, and taxes, which can save time and reduce the risk of errors. Additionally, payroll software can help to ensure compliance with labor laws and regulations.

You might be interested in:

• Tracking time in Excel
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• Strategies to increase profitability
• The differences between revenue and profit
• How to teach time management
• How do lawyers keep track of billable hours?

The post How To Calculate Payroll Hours: Methods & Tools appeared first on Timeular.

Documenting every aspect of a project includes following certain steps and making sure that information is available to managers, stakeholders, and team members.

Whether you’re a seasoned project manager wanting to refine your own project management skills and create better project reports or want to create a project report for the first time, this article will guide you through the entire reporting process.

Want to create comprehensive project reports with just a few clicks?

Choose a simple, fast and secure time tracking solution that ensures timely timesheets, keeps your project budgets in check and automatically calculates billable hours.

Try Timeular for free

What is project reporting?

Project reporting is the process of collecting, analyzing, and disseminating information about a project’s progress and project team performance.

This kind of reporting involves gathering project data like key metrics and insights related to various aspects of the project, including timelines, project budget, resources, the status of operations, risks, and project milestones.

Project reporting exists to keep stakeholders and team members informed about the project’s development, being an essential tool when making decisions regarding any related situation.

The bottom line is that effective project reporting provides transparency on every action for everyone involved. Project reporting serves as a communication tool, fostering collaboration and accountability among team members and stakeholders. 

What is a project report?

A project report is a detailed document that provides a detailed overview of a project’s planning, execution, and outcomes.

It serves as a formal record, communicating essential information about the project’s progress, performance, and status to the various project stakeholders involved. This document plays a crucial role in fostering communication, transparency, and accountability within a project, assisting decision-makers when making decisions.

Typically, project management reports include these key points:

• The current status of the project and the project’s current direction
• Information about the timeline and project schedule
• Details about the project budget and resources used and/or needed
• Cost-benefit analysis report
• An outline of the upcoming tasks, realistic project objectives, and key milestones
• Strategies to address challenges, ensuring stakeholders clearly understand the project’s trajectory.

It’s important to also include an assessment of potential risks and challenges, and the solutions that may be the appropriate response if those ever arise.

It must also include the list of the pre-determined key performance indicators (KPIs), measures that assess the project’s performance against predefined project goals and objectives.

Who prepares a project report?

Usually, the project report is the responsibility of the project manager, unless another member of the team is designated to do it. It’s important to add that the responsibility for creating the project report may vary depending on the size and structure of the organization, as well as the nature of the project.

The project manager is usually the most well-acquainted team member with the project’s details, progress, and challenges, making them the best person to provide a complete and detailed project overview report.

In larger organizations, there might be dedicated project coordinators, analysts, or reporting specialists who collaborate with the project manager to gather relevant information and create the report.

Benefits of a project report in project management

A project report is a vital part of a project management operation not only for its purpose as a reference document but also as a communication tool.

Beyond being a formality, a well-crafted project report is essential in communicating information to stakeholders, guiding decision-making, and ensuring transparency throughout the project lifecycle.

Let’s explore the benefits of building a project report.

1. Improving communication and transparency

It serves as a communication bridge, offering stakeholders, team members, and decision-makers a clear and transparent view of the project’s status, progress, successes, and challenges.

2. Informing decision-making

Because it provides detailed insights into various aspects of the project, the project report empowers decision-makers to make informed choices. It facilitates the identification of potential issues and allows for timely adjustments to keep the project on track.

• Read also: Why quick decision-making is so important?

3. Informing resource allocation

Project reports include information on budget use, resource allocation, and financial aspects, among others. This data enables organizations to optimize resource allocation for current and future projects.

4. Enabling risk management

The identification and assessment of risks are integral components of a project report. This information helps teams develop strategies to mitigate risks, enhancing overall project resilience.

5. Evaluating performance

Having key performance indicators (KPIs) and progress updates in a project report enables stakeholders to evaluate the project’s performance against predefined benchmarks, ensuring alignment with organizational objectives.

6. Engaging stakeholders

A well-prepared project report keeps stakeholders informed about the project’s purpose, goals, and accomplishments. This involvement fosters a sense of collaboration and accountability.

7. Documentation purposes

Project reports serve as crucial documentation for auditing purposes and compliance with organizational standards, industry regulations, or contractual obligations. It also creates a historical record of the project, providing a reference point for future projects.

8. Evaluating the project

When the project is complete, the report serves as a comprehensive record for evaluating the project’s overall success, documenting lessons learned, and facilitating the closure process.

9. Continuous improvement

Through the analysis of past projects documented in reports, organizations can get valuable insights and use this information for continuous improvement. Lessons learned from one project can inform the approach to future initiatives.

12 Common project report types

Various types of project reports cater to different needs and objectives throughout the project lifecycle. There is often a need for more than one effective project report, and it’s essential to understand the different types of reports and when to use them.

Understanding the nuances of these project report types allows project managers and teams to tailor their communication to specific needs and issues.

1. Progress report (aka project status report)

This type of report provides an overview of the project’s status, highlighting completed tasks, milestones achieved, and work in progress. It keeps stakeholders informed about the project’s development.

For basic progress reporting, use the task tracker template.

2. Risk report

This one focuses on identifying, assessing, and managing potential risks associated with the project. It also helps to outline strategies to manage projects, mitigate risks, and ensure proactive risk management.

• Read also: How to create a project risk management plan

3. Financial report

Another type of project management report is a financial report. It documents the details of the project’s financial aspects, including budget allocation, expenses, resource utilization, etc. It helps in tracking financial health and adherence to budget requirements.

• TIP: Read our guide about cost tracking in project management
• Check out: Markup Calculator and Margin Calculator

4. Quality assurance report

It focuses on the quality of project deliverables, processes, and outcomes. It outlines measures taken to secure the overall quality of the project.

5. Status report

The project status report provides a concise summary of the project’s current state, including accomplishments, challenges, and upcoming milestones.

Project status reports are also known as project health reports.

6. Milestone report

This type of project completion report highlights the specific milestones achieved during the project, indicating progress and how the project timeline is being handled.

7. Issues log

The issues log document issues or challenges encountered during the project. It includes details about the nature of the issue, its impact, and proposed or implemented solutions.

8. Implementation report or project summary report

Created after the completion of the project, this report evaluates all project data, including the project plan, results, outcomes, what was learned during the project, and its overall project success. It provides insights for future projects.

9. Resource allocation report

The resource reports summarize the distribution of resources, including staff, equipment, materials, and budget. It helps optimize resource utilization when managing projects and ensures that resources meet the project requirements.

10. Communication plan

Those are project reports that outline the communication strategy and explain how information is shared among team members, stakeholders, and other relevant parties.

11. Forecast report

Forecast project reports created by project managers include projections for future project activities and potential challenges, supporting planning and decision-making for the upcoming phases of the project.

12. Closure report

This type of report summarizes the project’s overall performance, achievements, and challenges, and it should also include recommendations for future work. 

How to write a project report

Making sure that effective project reporting is in place is incredibly helpful for the project’s lifecycle. By structuring the report for maximum impact, each step plays a crucial role in delivering clear and useful information to stakeholders.

To create effective project reports, follow these tips:

Define the main goal of the project report

Consider what information you want to convey, whether you need to address project risks, and who the intended audience is.

Research your audience well

Tailor your language and wording based on your audience. Before building and sending a report, understand who will receive it and adjust your communication style accordingly.

Choose the type or types of report you’ll be using

Evaluate the team’s needs, the stakeholders’ expectations, and the project type to determine the most suitable report type. Align it with the project itself.

Use templates

Templates can save you precious time. Find or create templates tailored to the specific focus of your report to expedite the formatting process and provide a standardized structure for conveying the same data more effectively.

• TIP: Save time by downloading these time management templates that you can use for reporting.

Make sure you’re including all the relevant information

A comprehensive report should include the most important details from your project, focusing on the most recent and critical information. Keep the report concise by including essential elements such as original deadlines, project tasks completed, potential issues, and individual team member responsibilities.

Keep the information well-organized

The report needs to be fairly easy to consult for clarity and impact. Prioritize information based on importance, arranging it in a logical order.

Choose the report format

Choosing the right report format is crucial as it ensures that the information is presented in a clear, accessible, and engaging manner.

This usually means using familiar formats like PowerPoint slides, PDFs, interactive dashboards, or Word docs to fit what different project stakeholders prefer.

Use a structure

A well-defined structure typically includes an executive summary, an introduction, a body of information presenting essential information (issues, team needs, project analysis, etc), and a conclusion.

Revise it and proofread it thoroughly

Do meticulously proofread for spelling errors, formatting issues, and accuracy in calculations and numbers. Ask for input from team members to catch any errors you might have missed. Another pair of eyes can be a big help.

Depending on the project needs or the company’s policy itself, it’s advised to maintain a regular reporting routine to provide project stakeholders with a consistent view of the project’s progress.

Create automated project reports with Timeular

As we’ve been explaining through this article, accurate project reporting is essential for successful project management. The key element of your project reports are time reports.

This is where a time reporting system like Timeular comes in, providing automated time tracking.

They not only enhance the accuracy and efficiency of your project reports but also offer comprehensive insights. They help in minimizing errors in tracking work hours and project progress, making the reporting process more streamlined and reliable.

Effortless, smart, and secure project time tracking

Timeular is a user-friendly and secure app that helps you create time reports with just a few clicks:

• Create detailed project reports
• Manage project expenses and project budgets
• Generate availability reports and reports on resource allocation
• Monitor the time dedicated to specific tasks
• Evaluate the productivity of your project team

Its simplicity and smart features make time tracking an integral and effortless part of your project management routine.

Choose your favorite time tracking method

In Timeular, you can pick the time tracking method that best adapts to your workstyle: use a physical time Tracker, automatic time tracking, or keyboard shortcuts, all ensuring a smooth and fast tracking experience.

Effects? Time tracking takes less than 1 minute a day!

Don’t chase timesheets ever again

All team members track work time, time off, and overtime in a single place. Thanks to effortless time capturing, which can be either automated or enhanced by smart time tracking methods and automated tracking reminders, you make sure that timesheets are always complete and ready whenever you need to write a project report.

Track billable hours automatically

As a project manager, you can effortlessly tag tasks as billable or non-billable, allowing for simple tracking of time invested in various projects and clients. By assigning hourly rates to specific tasks or team members, the system automatically computes costs.

This feature is instrumental in checking up project’s health and creating an insightful project management report. Monitoring project expenses, guaranteeing precise client billing, and offering valuable information regarding your team’s productivity additionally improves your project management skills.

• Discover the benefits of the Timeular billable hours tracker for more details.

You can finally keep project budgets in check

Timeular’s data is particularly valuable for creating precise status reports regarding project budgets. Keep your budgets in check by setting the planned hours for each project and hourly rates for each task or team member.

We will let you know when you are approaching certain limits to keep you away from overspending and overservicing your clients.

Smoothly integrate with your project management tools

You can easily track the time of all the tasks monitored in your project management software thanks to integrations provided by Timeular and Zapier. You can build your own integrations, too, using API.

Read more:

• Salesforce time tracking
• ClickUp time tracking
• Jira time tracking
• HubSpot time tracking
• Trello time tracking

Conclusion

Project reporting is an integral aspect of project management, a compass that guides projects from inception to completion. Hopefully, this article serves as a guide that has proven the significance of project reports, their types, and the critical role they play in effective communication, decision-making, and accountability.

From understanding the basics of project reporting to exploring various report types, including progress reports, risk reports, and financial reports, this guide can help project managers and teams with the knowledge to tailor their reporting to the project’s specific needs.

As we also explored, the benefits of project reporting are vast, from improving communication and transparency to informing decision-making, optimizing resource allocation, and enabling risk management.

Project reports not only document project details but also contribute to continuous improvement and serve as historical records for future initiatives.

You might be interested in:

• Project management tracking
• What is project monitoring?
• How to measure project profitability
• Timekeeping policy
• What is the first step in project cost management?
• How to sell consulting services

The post Project Reporting: In-Depth Guide to Project Reports appeared first on Timeular.

In this guide, we’ll show you how to calculate overtime pay, providing a clear and comprehensive roadmap to deal with this crucial aspect confidently. Also, you’ll learn how time tracking can help companies keep overtime track accurately.

What is overtime pay?

According to the Fair Labor Standards Act (FSLA), overtime pay refers to the additional compensation eligible employees receive when working more than their defined number of working hours.

If the average work week of an employee is 40 hours and he works 50 hours, he could be eligible to earn overtime pay for the extra hours he has worked.

The rates, eligibility, and calculation method may vary depending on the labor laws and regulations of the jurisdiction. 

What is the FLSA regular rate of pay?

The FLSA regular pay rate is derived by dividing the employee’s total earnings for a given workweek – excluding specific statutory exclusions – by the actual number of hours worked that week. 

How does overtime work?

Overtime hours are typically calculated within a workweek framework established by labor laws such as the FLSA. If an employee surpasses the standard weekly hours defined by the FLSA, he becomes eligible for overtime pay. 

It’s important to note that the specific rules for overtime pay can vary based on jurisdiction and employment agreements.

Some states may have different overtime thresholds or rates, and certain industries may have unique regulations. 

It may also vary depending on the employee classification. The FLSA provides guidelines for proper employee classification, as failing to do so can result in costly penalties retroactively applicable from the employee’s hiring date. 

Employees exempt from overtime

As mentioned before, depending on the employee classification, he could be eligible or not for overtime pay.

According to the FLSA, employees who are exempt from overtime pay are not entitled to additional compensation for working more hours than the standard weekly hours because of their job duties and salary levels.

According to the FLSA, exempt categories often include:

• Salaried employees, who receive a fixed salary regardless of their working hours;
• Highly compensated employees;
• Certain professionals, such as doctors, lawyers, and teachers;
• Outside salespeople;
• Some computer professionals who meet specific criteria;
• Some agricultural and farm workers. 

Never miss a billable hour again! Track time accurately with Timeular.

The most effortless and intuitive time tracking software for teams whi bill their time.

Try Timeular for free

How to calculate overtime pay for hourly employees

Calculating overtime pay for hourly employees is a simple task to do. If you work overtime occasionally, use our free Overtime Calculator. To track overtime regularly, use Timeular’s overtime tracker that calculates overtime automatically.

To do it manually, multiply the number of overtime hours by the calculated overtime rate, which is usually 1.5 times the regular hourly wage.

This will give you the additional amount the employee should receive for their overtime work. So, it is the number of overtime hours x overtime rate.

Example:

If an hourly employee’s regular hourly wage is $15 and he worked 45 hours in a week, with 5 of those hours being overtime, the calculation would be:

• Regular Pay (40 hours × $15) = $600
• Overtime Pay (5 hours × $15 × 1.5) = $112.50
• Total Earnings = $600 + $112.50 = $712.50

Calculating overtime for multiple pay rates

Calculating overtime for multiple pay rates is more complex than the hourly employees and involves adding up all the hours the employee has worked at each rate. Then, you determine the total pay for each rate by multiplying the hours worked by that rate.

After adding up all these payments, you divide by the total hours worked to find the average rate. If the total hours worked in a week exceed the usual threshold (usually 40 hours), the extra hours qualify for higher overtime pay, one and a half times the average rate.

Finally, you add this overtime pay to the regular pay to get the employee’s weekly earnings.

The overtime pay formula

Total Earnings = (Regular Pay for Rate 1 + Regular Pay for Rate 2 + …) + (Overtime Hours × Weighted Average Rate × 1.5)

Example:

An employee worked 20 hours at $10 per hour and 25 hours at $15 per hour in a 40-hour week:  

• Total Regular Pay = ($200 + $375) = $575.
• Weighted Average Rate = Total Regular Pay ÷ Total Hours (45) = $575 ÷ 45 = $12.78.
• Overtime Pay = Overtime Hours × Weighted Average Rate × 1.5 = 5 × $12.78 × 1.5 = $95.85.
• Total Earnings = $575 (Regular Pay) + $95.85 (Overtime Pay) = $670.85.

Overtime pay calculation for nonexempt employees earning a salary

Although nonexempt employees receive a fixed salary, they are entitled to additional pay if their weekly working hours exceed a certain threshold, usually 40 hours.

To calculate their overtime pay, it is necessary to establish their regular hourly rate by dividing their weekly salary by the expected number of hours in a week. When employees work overtime, their pay rate is 1.5 times their regular hourly rate.

Example:

If a nonexempt salaried employee earns $600 per week and he works 45 hours in a week with 5 hours of overtime, the calculation would be:

• Regular Weekly Salary: $600
• Regular Hourly Rate: $600 ÷ 40 hours = $15 per hour
• Overtime Pay Rate: $15 × 1.5 = $22.50 per hour
• Overtime Pay: 5 hours × $22.50 = $112.50
• Total Earnings: $600 + $112.50 = $712.50

Calculating overtime for a nonexempt employee that works a fluctuating workweek

Calculating overtime for a nonexempt employee working a fluctuating workweek addresses a unique scenario where weekly working hours vary weekly. This approach acknowledges the reality that some jobs don’t adhere to fixed schedules. 

When overtime hours come into play, the calculation method involves a distinct approach, factoring in half the regular rate as the additional compensation for each overtime hour worked.

Here’s how to calculate overtime pay in such cases:

• If a nonexempt employee’s weekly salary is $500 and he worked 35 hours in a week, his regular rate would be $500 ÷ 35 hours = $14.29 per hour.
• If he worked an additional 10 hours of overtime, his overtime pay would be 10 hours × ($14.29 ÷ 2) = $71.45.
• The total earnings for that fluctuating workweek would be $500 (regular salary) + $71.45 (overtime pay) = $571.45.

Read also: How to effectively create a schedule for employees

Calculating overtime pay for non-hourly compensation

There are other types of compensation rather than those based on an hourly or salary basis that must also be considered when calculating overtime, such as the following.

Piece-rate work

Piece-rate work is a kind of compensation often used in which employees are paid based on the number of pieces or units they produce rather than receiving a fixed hourly wage. Each piece or task has an assigned rate, and the employee will receive money based on productivity.

It is an often-used method in industries where work can be easily measured and quantified, such as manufacturing, agriculture, construction, and certain types of service work.

First, determine the total earnings for the week based on the piece-rate system. Next, calculate the regular rate by dividing the total earnings by the total hours worked, encompassing both piece-rate earnings and hours worked.

Identify any overtime hours beyond the standard threshold, and compute overtime pay by multiplying the overtime hours by half of the regular rate.

Example:

An employee works 45 hours during the week and assembles 150 components, earning $300.

• Regular rate = Total earnings / Total hours worked = $300 / 45 hours = $6.67/hour
• Overtime hours = Total hours worked – Overtime threshold = 45 hours – 40 hours = 5 hours
• Overtime pay = Overtime hours × (Regular rate ÷ 2) = 5 hours × ($6.67 ÷ 2) = $16.67
• Total compensation = Total piece-rate earnings + Overtime pay = $300 + $16.67 = $316.67

Non-discretionary bonuses and commission payments

Non-discretionary bonuses and commission payments are additional compensation that employees can earn based on specific criteria or performance metrics, often outlined in employment contracts or agreements.

The calculation method of non-discretionary bonuses varies depending on where the commission is allocated, by the workweek or monthly, quarterly, or annually.

Overtime rules and regulations

Overtime rules and regulations are the established labor laws that determine how nonexempt employees are compensated for working beyond standard work hours.

The standard overtime pay rate defined by the FLSA is 1.5 times the regular hourly rate on a 40 hours workweek. 

Keeping proper records for overtime pay

Keeping proper records for overtime pay is crucial to ensure accurate compensation and compliance with labor laws.

For employers, it is essential to keep an accurate time tracking of the worked hours and a clear and easily accessible record of overtime pay, work hours, and compensation, as well as for employees who work by the hour and need an accurate record of payable hours.

There are several time tracking tools, timesheet software, and others that, through time tracking, can help enhance accuracy, streamline processes, and provide a reliable audit trail of worked and overworked hours to facilitate the calculation of overtime pay. 

Benefits of time tracking when calculating overtime pay 

What is time tracking?

Time tracking refers to recording and monitoring the time spent on various tasks, activities, or projects. It’s a systematic way of tracking how you allocate your time throughout the day. Time tracking can be used for personal productivity, project management, billing clients, or gaining insights into how you manage your time.

Time tracking can involve various methods, including:

1. Manual recording: this involves manually noting down the start and end times of tasks or activities. This can be done using a notebook, spreadsheet, or specialized time tracking software.
2. Clock-in/out systems: many businesses use clock-in and clock-out systems to track employee work hours. These systems often use biometric authentication, key cards, or digital logins to record when employees start and stop working.
3. Time tracking software: there are numerous digital tools and software applications designed for time tracking. These tools often offer features like creating tasks, setting timers, categorizing activities, and generating reports.

Read also: The different types of project reports

Creating a work-record

With time tracking, every time entry from employees is automatically aggregated and ready for invoice whenever you need it. Employers can improve workflows and estimate budgets better. Besides, it generates complete reporting for company audits and more. 

Accurate billable hours 

As mentioned, time tracking is essential if you bill your clients by the hour because it ensures that the time spent on the task is accurately tracked. There are no overcharging or missing billable hours, and all the little things in between are tracked. 

TIP: Ensure accurate billable hours with an effortless workforce management system.

Precise data and reporting

You get valuable insights and automated reports to identify areas you can improve and how much time employees spend on tasks.  

Read also: How to reduce overtime

Frequently asked questions about overtime pay

Is overtime 1.5 or 2x?

Overtime pay is typically calculated at 1.5 times the employee’s regular pay rate. This means that for each hour worked beyond the standard workweek (usually 40 hours), eligible employees are entitled to receive their regular pay plus an additional of their regular pay rate as overtime compensation. 

How do you calculate overtime per day?

In areas where overtime is calculated daily, employers are required to use the applicable overtime rate for every hour exceeding the designated standard workday. 

Is overtime calculated by day or week?

Overtime hours are typically calculated every week. In this context, overtime is determined by the number of hours an employee works in a 40-hour workweek. 

However, it’s important to note that overtime calculation methods vary by region and industry. Some states may have provisions for daily overtime or other variations. 

What is the formula to calculate overtime pay?

According to the FLSA, the formula to calculate overtime pay is the number of overtime hours × regular hourly rate × 1.5.

How to calculate overtime tax?

Overtime pay is generally subject to the same income tax rules as regular pay. Calculating overtime tax involves determining the extra taxes you might owe on the additional income you earn from working overtime. 

What is an acceptable overtime percentage?

An acceptable overtime percentage varies depending on the industry, the laws, and the regulations. Usually, keeping overtime within 5-10% of total hours worked is a reasonable goal for maintaining productivity and work-life balance.

How to calculate overtime during a holiday week?

To calculate overtime during a holiday week, you should consider both the extra hours worked and any applicable holiday pay rates to adjust the usual formula to calculate your overtime hours. 

How to calculate double overtime?

Calculating double overtime involves determining the extra pay owed to an employee who works more than a certain number of hours beyond their regular work hours, typically over the standard workweek and the initial overtime threshold. 

Double overtime pay = (double overtime hours) × (double overtime rate)

How to calculate overtime when there is a holiday?

To calculate overtime during a holiday, you should consider both the extra hours worked and if there’s any special holiday pay rate. 

How do you calculate overtime with night differential?

To calculate overtime with night differential, you should consider both the extra hours worked and applicable night shift differential pay rates and overtime rates. 

Conclusions

In conclusion, navigating the complexities of overtime pay can be challenging, but understanding the rules and regulations is essential for fair compensation and compliance.

This comprehensive guide has provided you with the knowledge and formulas to confidently calculate overtime pay for different types of employees, including hourly workers, salaried employees, and those on fluctuating workweeks or piece-rate work.

By accurately tracking employee hours and maintaining proper records, you can ensure that your overtime calculations are precise and compliant with labor laws.

Utilizing time-tracking tools and software can streamline the process, improving efficiency and providing valuable insights for better and quicker decision-making.

As you move forward, always consider the specific overtime rules and regulations in your jurisdiction and industry to avoid any potential pitfalls.

With this guide as your roadmap, you can navigate the complexities of overtime pay with ease and ensure that your employees are fairly compensated for their hard work and dedication.

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