Since the COVID-19 pandemic, there has been a discussion about why and how businesses can optimize project labor costs for better cash flow. But the way to achieve this is not as easy as it sounds. Several obstacles can derail project cost management efforts. It only becomes more challenging when the majority of employees are operating remotely.
Below are common barriers and insights for tracking and optimizing employee hours and project labor costs.
1. Not accurately tracking billed project time
Time is money. However, a lot of project time is not tracked because it is often considered an inconsequential activity and causes unnecessary disruption to the daily workflow. The inability to capture all billable and non-billable time is a common challenge that translates directly into lost revenue and poor project profitability for the business.
Without a complete picture of accurate billable time, you may underestimate project time and sell yourself short, or overcharge customers and damage customer trust and relationships.
With Timesheet, you can easily configure timesheets to track the latest project time for customer billing. Since the software is non-intrusive, your employees can complete their daily tasks without any interruptions. It will accurately capture billable and non-billable time for proper billing.
2. Difficult to manage project costs, resources and compliance
Whether a project is internal or external, cost management and budgeting mean a successful completion of the project or a high price for mistakes. Labor costs like turnaround time, idle time, and wasted resources can drain a lot of cash flow if not managed well.
Besides, with multiple projects running in parallel, it can be difficult to determine which project is causing the most cost and resource leakage. Without this visibility, you may see billing errors, incorrect work reports, and wrong quotes, all of which can lead to lost revenue or projects over budget.
Using Timesheet to associate resources and costs with projects helps financial staff like you to understand how projects are performing against assigned budgets and quickly identify projects that are out of control. With an effective solution, you can track and calculate all project costs and control project budgets.
3. Inaccurate project expense tracking
Projects incur costs. The ability to track and manage costs is critical to keeping projects within budget. Tracking time gives you and your employees real-time visibility into their work and projects to improve overall efficiency, productivity, and profitability. Nonetheless, managers found it challenging to collect accurate and complete timesheets. It may not come as a surprise that employees are reluctant to submit their timesheets.
Your employees would rather work on billing projects than go through multiple systems to track time or manually enter information during a busy work week. As a result, a large number of customer billable charges are not being tracked.
Give your employees the flexibility to add project costs and timesheets in real time. Choose an intelligent platform that provides insights into employees’ full-time work and helps them fill out timesheets. Timesheet allows your employees to capture time and link it to related projects, eliminating the risk of information loss. Unified management software like this is good for you to have complete control over staff and project-related time, ensuring that projects run smoothly within schedules.
4. Manage concurrency issues with paid time off
Do you use outdated systems, emails, or (even worse) spreadsheets to track employees paid leave, vacation, overtime, or accrued leave? If so, your finance team is likely struggling to keep track of these expenses to make payments accurately.
Even if the project manager and HR team are in charge of the approval process, delays in sending information to the finance team can be the difference between a positive and negative cash flow month, quarter or year. Additionally, with many employees now remote, tracking time off and overtime with 100% accuracy is not just a good thing, it is a must-have.
Timesheet supports recording different types of time as follows:
- Project hours—recorded by project name or code
- Non-project hours—support enterprises to customize non-project work categories, such as handling emergencies, recruitment and training, etc., and record them by category
- Leave time—support enterprise-defined categories, such as paid annual leave, paid sick leave, paid maternity leave, and unpaid personal leave, etc., and record them by category
Different companies have different rules for calculating overtime wages due to different business and industry habits. Timesheet can provide different overtime wage calculation rules for different companies. When the timesheets are approved, the finance team can quickly get 100% accurate information from the real-time calculation system.