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What Is Employee Time Tracking?
Work Management
Last modified date

Feb 21, 2024

A Practical Guide to Employee Time Tracking Using Spreadsheets

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Roman Shvydun

Blog average read time

7 min

Last modified date

February 21, 2024

Did you know that only 17% of people actively track their time?

Employee time tracking is crucial in business. Think of it as a way to manage your time effectively, sort tasks efficiently, and get billed correctly.

But here’s the problem: About 87% of surveyed respondents encountered challenges in tracking time. The good news? Software automation has become readily available in the market. You can leverage one for employee time tracking.

Still, the use of spreadsheets has remained classic in business. Some companies and organizations have long relied on them for their ease of use, simplicity, and several other potential benefits.

This page is a practical guide to employee time tracking. Read on to learn more about:

  • The benefits of using a spreadsheet
  • How to set one up for time tracking
  • What best practices to implement.

Ready? Let’s dive right in!

Source: Pexels

What Is Employee Time Tracking?

Employee time tracking is precisely what it is—tracking how employees use their time at work. By definition, it entails recording and monitoring the hours workers spend accomplishing tasks during their shifts. This strategy is used for the following:

  • Payroll management: Track employees’ working hours to calculate their wages and make correct salary disbursements.
  • Work allocation: Distribute tasks among employees in a department and see if they are keeping up with their jobs.
  • Performance measurement: Monitor employees’ work efficiency, quality, and customer satisfaction.
  • Business planning: Track employees’ work hours and plan for staff scheduling, resource allocation, and workforce optimization.
  • Legal and regulatory compliance: Ensure accurate timekeeping for complete adherence to labor laws and regulations.

It’s easy to see companies and organizations invest in time tracking in today’s business landscape. Some go as far as leveraging employee time-tracking software to streamline this process. The proof is in the numbers:

The global time-tracking software could grow from $2.44 billion in 2022 to $2.86 billion this year. It’s projected to reach $11.45 billion by 2032 at a compound annual growth rate (CAGR) of 16.7%.

Source: Market Research Future

7 Benefits of spreadsheets for employee time tracking

Time tracking is beneficial to businesses in more ways than one. However, amid the rise of software automation, some organizations prefer using spreadsheets for a handful of reasons.

Michael Power, CMO at DTF Transfers, highlights the benefits of spreadsheets for time tracking. “Whether Excel spreadsheets or Google Sheets, they are easy to use and manage. They have long been reliable in maintaining timesheets and monitoring employees. That’s why we’re using spreadsheets for tracking our employees’ working hours and even our clients’ order requests.”

However, there is more to what Power said about time tracking using spreadsheets. The truth is, the benefits are multifold:

  1. Cost savings: Software automation can be costly, especially for startups and small businesses. Spreadsheets are often free, which can help you cut costs without compromising time tracking.
  2. Flexible customization: Spreadsheets are flexible, allowing you to customize your timesheet. All you have to do is input data and information best suited for your business.
  3. Error reduction: Spreadsheets can guarantee data accuracy, enabling your employees to double-check the inputs. Just ensure they track their work hours consistently and correctly.
  4. Seamless tracking: Most employees are familiar with using Spreadsheets. They won’t have a hard time updating the data from when they log in to when they log out.
  5. Data analysis: Spreadsheets include formulas and functions, allowing you to calculate data automatically. They can help you analyze the information to send accurate reports and make sound business decisions.
  6. Efficient reporting: Spreadsheets themselves can act as your official timesheets. They help with business reporting for scheduling, staffing, and task allocation.
  7. Easy employee management: Are you looking to manage your employees in one place seamlessly? The use of spreadsheets can help do the job for you!

In the next section, learn how to create and manage a spreadsheet for employee time tracking.

Start tracking your work time now! Create timesheets and time reports to watch your team's progress.

How To Set Up a Spreadsheet for Employee Time Tracking

Creating a spreadsheet for employee time-tracking isn’t that complicated. In fact, various templates are all at your disposal. However, there’s work that needs to be done.

Ryan Hammill, Co-Founder and Executive Director of the Ancient Language Institute, leverages spreadsheets for employee time tracking. “Using Microsoft Excel has been a tradition in our organization. It’s easy to create, organize, and maintain one. But it still requires a little technical expertise and attention to detail. You should consider using one for time tracking.”

Don’t know how to get started with employee time tracking? Follow our crucial steps for setting a spreadsheet below:

1. Invest in the right spreadsheet

Before you start with time tracking, you should consider what type of spreadsheet to use. The two most popular applications are Microsoft Excel and Google Sheets. You may also consider LibreOffice Calc, Apple Numbers, Zoho Sheet, Smartsheet, and Airtable.

Here’s the good news, though. There are several time-tracking software apps you can invest in. An automated time tracking app is the perfect solution as it takes away the hassle of having to create spreadsheets in the first place. In Paymo, you can add time automatically daily or add time in bulk for the whole week:

2. Develop your own template for time tracking

After deciding what spreadsheet to use, it’s time to create a template for employee time tracking. Using one to develop a time tracker can make your life much easier, more seamless, and more convenient. But of course, it depends on what spreadsheet to use and your work setup.

Fret not, as spreadsheet templates are readily available in today’s business landscape. Let’s take Microsoft Excel, for instance. You can simply go to the Microsoft website used for business templates. Then, you can choose a time tracker best suited for your organization. Voila! You can develop a timesheet in an instant using a template.

3. Define data entry fields

With the template in place, you can now add the details to your time-tracking spreadsheet. Of course, you should define and set the data for each field. Clueless on how to proceed? Here are elements to consider for the data entry in your spreadsheet:

  • Employee details: Include the name, employee number, job, role, and department.
  • Logging in and out: These fields reflect when they’ll clock in and out from work. You should also include the date, which consists of the day, month, and year.
  • Lunch and breaks: You have to add fields to fill out for their lunches and breaks. You shouldn’t miss out on these!
  • Overtime work: A separate, distinct field should define the employees’ OT work. It must be highlighted!
  • Task allocation: This part is where all the tasks get added, and employees tick them off once accomplished.
  • Remarks: This field allows employees to put notes or comments you should know, consider, or take action.

4. Add key formulas and automatic functions

At this point, it’s time to establish the time tracker’s automatic calculations. To do this, you must add the formulas and functions needed for your tracker. But how do you go about doing that?

The Excel spreadsheet lets you record and report data automatically. For instance, it automatically shows the number of days your employee worked and was absent. However, you have to know the formulas used to set them up. Ultimately, this feature helps you in employee tracking and business reporting.

And remember to add colors, backgrounds, and designs as well. They put little aesthetics into your timesheet. And there you have it—your time tracker is ready for employee time tracking!

According to Gerald Lombardo, Head of Growth at Popl, “Adding key formulas and automatic functions to your time tracker in Excel is a crucial step for efficient employee time tracking and business reporting. These formulas automate data recording and reporting, such as calculating the number of days an employee worked or was absent. It’s essential to understand the formulas used, as they are the backbone of this feature, ensuring accuracy and productivity in your tracking system.”

5. Start Tracking and Managing Employee Data

The real deal doesn’t end with optimizing the functions and enhancing the aesthetics of your time tracker. Once it’s all done, that’s where the actual work begins. Your employees can now start tracking their working hours, and you can begin to manage the employee data.

Anthony Martin, Founder and CEO of Choice Mutual, suggests accurate recording and regular tracking. “While spreadsheets greatly help with time tracking, the responsibility lies in each and every employee. And the tracker manager should always stay on top of this. Doing so ensures the details are always complete, accurate, and up-to-date.”

Discover some of the best practices in time tracking using spreadsheets below.

Best Practices for Employee Time Tracking Using Spreadsheets

Using spreadsheets isn’t the ultimate panacea for all your time-tracking problems. It also comes with some potential drawbacks and challenges. Therefore, you should optimize the use of these spreadsheets.

Jesse Hanson, Content Manager at Online Solitaire & World of Card Games, shared best practices for employee time tracking. “A spreadsheet has long been a reliable tool for tracking working hours and more. However, there are a few things to do and keep in mind.”

As such, Hanson recommends taking the following steps:

  1. Orient your employees. After setting up your timesheet, provide clear instructions for all employees. More importantly, train them how to use it and track their time.
  2. Require regular tracking. Some employees avoid time tracking for some reason; others simply forget to do so. So, ask leaders to monitor their subordinates and ensure they track time consistently.
  3. Note attendance and absences. What are timesheets for? They are designed to track the attendance. Therefore, you should prioritize marking employee absences.
  4. Track overtime work. Why? Employees deserve to get paid for their OT work. Failure to do so will escalate to payroll disputes and HR complaints.
  5. Monitor leave balances. During time-tracking training and orientation, remind employees to check their leave benefits regularly. They should use these balances; However, they shouldn’t forget to file for leaves properly.
  6. Conduct regular reporting. Tracking working hours is one thing; Generating reports is another. What’s good is that a well-established timesheet provides automatic calculations. Still, you must review and stay on top of your reports!
  7. Allow employees to validate. Employee validation should be a part of the overall equation. Before submitting payroll reports, have employees review them. More importantly, submit corrections when necessary.
  8. Stay on top of payroll. A spreadsheet lets you track time for billing purposes. This step is the most crucial part of time tracking. Ensure regular tracking, data accuracy, and proper review!
  9. Address errors immediately. There are time-tracking issues you need to resolve promptly. Make the necessary corrections as soon as you notice some inconsistencies and discrepancies.
  10. Maintain spreadsheet regularly. It’s best to assign a point of contact (POC) tasked to manage and maintain your timesheet. Any errors encountered by employees should be forwarded to the POC.
  11. Integrate it with other tools. Here’s the good news: You can integrate spreadsheets with other digital tools. You can import and export them in automated software for documentation and reporting.
  12. Set data backup and recovery. In some cases, companies and organizations invest in software automation for time tracking. But they continue to use spreadsheets for record and backup purposes.
  13. Ensure legal compliance. Andrew Pierce, CEO at LLC Attorney, highlights the importance of data accuracy in time tracking. “It impacts payroll, employee benefits, taxes, and insurance. Ensure 100% adherence to labor laws and regulations to avoid legal implications.”

Final words

Employee time tracking is crucial in business. Using spreadsheets remains beneficial to this day. As mentioned, this approach can help:

  • save costs
  • customize details
  • reduce errors
  • track time seamlessly
  • analyze data automatically
  • report efficiently
  • manage employees easily

As such, follow the crucial steps above for setting up a spreadsheet for your employee time tracking. More importantly, implement some of the best practices shared above. Doing so can maximize the use of spreadsheets and improve your employee time-tracking.

However, if you’d like an automated desktop time tracker, Paymo Track is free to download and use:

Looking to optimize your time-tracking operations for your small or mid-sized business? Consider leveraging Paymo. It has incredibly robust features, such as automatic time tracking, a robust project management tool, spreadsheet integration, data privacy and security, and more. Get in touch with the sales team today to see how we can help.

Roman Shvydun


Roman Shvydun writes informative articles about marketing, business, productivity, workplace culture, on a freelance basis. During 10+ years of content creation experience, his articles have helped numerous entrepreneurs to scale up their businesses.

Alexandra Martin


Drawing from a background in cognitive linguistics and armed with 10+ years of content writing experience, Alexandra Martin combines her expertise with a newfound interest in productivity and project management. In her spare time, she dabbles in all things creative.

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