Timesheet software is not just for payroll anymore. Increasingly, operational process accounting and project accounting (often for client billing) is becoming important to professional organizations of all sizes.

Timesheet software is recommended for companies that have outgrown their current paper-based or homegrown timesheet system, are trying to use Microsoft Excel for timesheets or have multiple installed time collection systems that produce inconsistent data. Without timesheet software, it is difficult to understand project costs and send correct and timely bills to customers. And it can make payroll very frustrating.

How can you be sure you’ll get a system that works for your company and is immune to the most common problems experienced when buying a timesheet collection automation system? Here are a few things to consider:

Have a Buying Process

Too often--in large and small companies alike--the key statement in the buying process is “Look at this cool thing I found on the Internet.”

The result of this usually is wasted time and money. Timesheet software is not a toy. It will touch everyone in your company. Nobody likes to track their time, so it has to look good. In fact, it has to look great. And be fast. And encourage accurate data collection in everyway possible. And be a real accounting system with double entry methodologies and approval processes. And have automatic reminders for the procrastinating, busy, forgetful executive (you know who you are).

First, you need a requirements list. This will enable you to eliminate scads of vendors that you will run across when you Google "timesheet." Ask all the different departments in the company that will be affected by the system for their input.

Here are a few potential requirements:

•       Do you need to verify invoices sent to you by contractors, and test the timesheet system on them first?
•       Do you need to have a system that prevents people from tracking time against projects they shouldn’t have access to?
•       Do you need to send payroll data to ADP or Paychex?
•       Do you need to send billing data or payroll data to QuickBooks (or SAP or Oracle)?
•       Do you need to get the system rolled out now and don’t have time to wait for IT to buy a machine and transfer it to your IT shop when they’re ready?
•       Do you need to split-bill back project costs to other internal departments?
•       Do you need to fix your estimation process?
•       Do you need Defense Contract Audit Agency (DCAA) compliance or very accurate IT capitalization data for the Sarbanes-Oxley Act (SOX)?
•       Do you need to understand your R&D costs on a per-product basis?
•       Do you need a tightly controlled but distributed purchasing process where everyone gets a company credit card?
•       Do you need to reimburse for mileage?
•       Do you need a low monthly fee rather than a giant one time fee?

Good timesheet software does all of that, if properly configured.

There is no Easter Bunny

I recently saw a statement on one vendor’s site that they can “implement in 2-3 days”.

And Santa is going to bring you a nice fluffy bunny sitting in a new Lexus.

No, you can’t roll your time tracking system out in two days unless your problem is simple enough to only include one of the above requirements. And if you think your requirements are that simple then you’re probably not looking very hard. If it’s really that easy, then you should just keep emailing around those Excel spreadsheets that you’re already sick of.

This technology is powerful and it can help your company become more profitable in a number of ways. It can lower your payroll processing cost while increasing accuracy. It can speed up your billing and convert more A/R to cash. It can automate travel expense reimbursement. And most importantly, it can tell you which projects are broken before you would ever have known it before.

Vendors who claim two-day rollout times are just plain lying to you. They’re preying on your "cool Internet toy I found" excitement in order to sell you shelfware. If you think it’s easy, then you won’t look too hard at their solution, you’ll just buy it.

Which is exactly what they want.

The Most Common Mistake In Buying Timesheet Software

Don’t fall for a deceptive demo.

You have the power to demand that any vendor absolutely, completely prove beyond a shadow of a doubt that their solution will solve your company’s specific business problem. You deserve a detailed demonstration that uses your employee list, your customer list, your project list, your company’s logo, your color scheme, and that shows you reports on your data that will prove to you that your business problem is solved. If a vendor can't make you 100 percent certain that the solution will work for your specific business needs, then walk. Period. Canned demos are designed to deceive. Don't believe them. By the way, this process alone will take more than two days if your problem is complicated. Don’t believe those instant rollout claims.

What To Ask Vendors: “Can you absolutely prove to me that you will solve my business problem, using my employees, departments, projects, etc., and then show me the reports I need to see? Can you provide references of clients that have successfully integrated your product with my accounting system, my project management system and my payroll service provider?” If the vendor can quickly configure the software during a demo for you and show you that it really meets your needs, then he probably can do it quickly after it’s installed at your company as well.

SaaS Flexibility Allows Early Rollouts, Server Protection and Easier Upgrades

If the software is 100 percent Web-based (and it better be if you want to avoid obsolete technology and installation problems on every machine in your company) then you are able to run it from any server on earth. Some timesheet software companies deliver their technology via only one of two different models: installed at your location or software that is rented. The software runs on their site. This approach is called software as a service (SaaS). Since most timesheet software is primarily Web-based these days, there is no reason a provider can’t do both, is there?

SaaS allows early rollouts, server protection and easier upgrades. In an "early rollout," the vendor lets you temporarily use the SaaS site while your IT shop deploys the machine purchased for your local installation. "Server protection" is the process of sending a backup to the vendor in case your local installation fails. Thus, the vendor can get your system up on his site instantly. SaaS vendors allow easier upgrades because they can provide you with a test site during the upgrade process that requires no hardware purchases on your part.


What To Ask Vendors: “What sort of backup generator do you have in case of a power outage at your SaaS site? Where is it hosted? How many connections to the Internet does your SaaS site have? How much does server protection cost? Can I rollout on your SaaS servers and later transfer the data to my own servers? Where are SaaS backup tapes stored? What kind of security and fire suppression capabilities exist at the hosting site?”

Look Outside the HR Department

When payroll executives implement time and attendance systems to automate payroll, they often miss the chance to facilitate greater profitability throughout the entire company. These executives are, of course, payroll experts. They are usually not experts at project accounting or billing automation.

The time data they collect, if collected appropriately, can also be used to automate project management, project costing, project tracking and project estimation improvement, as well as for internal, external and reverse billing automation. Most payroll and HR executives know little about these subjects, but increasingly, they are being asked to rise to new challenges.

This goes back to that requirements gathering portion of the timesheet software selection process. Bring in R&D managers, marketing folks, and A/P people. Have a selection team. It’s harder, but it will unleash profitability that you didn’t know you had available.

You deserve to be 100 percent positive that the timesheet software you is the right choice for you, and is capable of early rollouts, server protection, and simple upgrades. You have the right to demand a tailored demo with your company’s information. Be sure that you understand the degree to which the vendor’s solution is browser based. You probably need a solution that does more than just payroll--although payroll might be the first step in a phased implementation strategy.

If you’ve done a good job of requirements gathering and your chosen provider can include services people to get it rolled out correctly for you, and if you’ve checked references thoroughly, timesheet software can make enormous profitability increases in your company by automating payroll, billing and most of all project cost accounting.
 
Curt Finch is the CEO of Journyx in Austin, TX.