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Working Overtime? 3 Reasons Why Timesheets Need to be Accurate

Dec 30, 2014 | By Mark Khurshid | 0 Comments

Topics: Timesheets, Time Entry, Time Mangement, Industry Insights

Owners, managers, and employees alike cringe at the word “overtime” because it elicits negative emotions. Owners hate that it costs them more money. Employees hates that it costs them more time. Managers don’t hate but loathe having to work overtime almost every week of the year.

For public accounting firms, overtime is pretty much a necessity every year. A lull in billable activity is followed by a 300-hour audit with a two-week deadline or a 50-hour tax return with three days to turn around. The workload constantly grows, but it all has to get done on time.

Because overtime is a near-necessity in professional services firms, owners and managers need to understand the importance of tracking overtime and related payroll using a reliable, automated timekeeping system.

Here are three reasons why accurate timesheets are needed to help you deal with potential headaches associated with employees working more than the standard 40 hours per week:

Forecasting Workload

Meeting and exceeding client expectations is a primary goal of every business. For a service-based business, delivering a quality, final product often depends on the quantity of employees available and the quality of work performed by these employees. Accurate time tracking as a routine in your company helps you to estimate the future workload and staff allocation.

For example, how many hours will it take you to complete the audit your newest client just hired you for? Do you need one or more employees to work 40 hours a week to complete this audit? Do you need to hire a temporary employee now so you can complete the audit by the deadline you just said yes to?

Your situation may dictate that you either ask your current employees to work overtime or increase the quantity of employees available to help complete the project. If you don't increase the quantity of hours worked by your current employees or hire additional staff even on a temporary basis, the quality of your final product could be adversely affected.

Overextended or Underutilized Employees

Imagine you just survived April 15th. It's now May 1st and you need to finish those returns you extended. One of your staff accountants has 300 hours of billable work in his filing cabinet waiting to be attended to. Another one of your staff accountants has 5 hours of billable work in her filing cabinet that will be done by lunch.

If you're not aware of this workload imbalance, you'll have one employee working overtime for the next two or three weeks while your other employee will be making the rounds several times a day asking "Do you have anything I can help with?"

By tracking work that is done as well as that which still needs to be completed, you can quickly pinpoint an imbalance in workload among your employees and reallocate projects in order to avoid either having to pay overtime to hourly employees or having salaried employees work longer than they need to.

Compliance

The Internal Revenue Service isn’t the only government agency that has an active enforcement wing to collect past due tax liabilities. A lesser-known agency, but just as prominent in the business world, is the “Wage and Hour Division” (WHD) of the U.S. Department of Labor.

In 2011, the WHD collected back wages totaling $225 million. Since service-based firms don't employ many, if at all, non-salaried employees who are entitled to time-and-a-half for hours worked beyond 40 a week, the majority of back wages collected have been for overtime.

Even if you have only one or two hourly employees, being vigilant in your compliance with labor laws and accurate timekeeping can prevent possible headaches with the WHD down the road.

Overtime doesn't have to be feared by owners and employees. If it's properly tracked, timesheet and overtime reports can help business owners potentially save money by decreasing overtime hours needed to be worked by hourly employees, while salaried employees can clock out for the weekend after contributing their 40 hours.

BQE Software offers smart yet simple time tracking, billing and project management solutions for service professionals. Check out BillQuick!

The Author

Mark Khurshid

Mark Khurshid is Vice President, Training and Consulting at BQE Software, and specializes in onboarding customers to BQE products, providing them with customized solutions, and ensuring they have a great customer experience during training. Mark has a background in project management and programming and is a Sun Certified Java programmer as well as an expert graphic designer. When he isn't working on customer implementations, he enjoys reading fiction and spending time with his beautiful wife and three sons

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