Time tracking and its impact for the organization?

Time-tracking

Time is money. So it is important to track time in your organization. Time tracking is very important for good employee management process. Because you have to know, what your employees are doing? You may say, I don’t care. I want output, if my staff submit their assignment in due time, I am happy. But are you sure, you are utilizing their time efficiently? You have to remember, you are paying salary which is approximately 20% of total cost.

Lets you are owner of a manufacturing company. You have 800 employee working on different department. Average salary of each employee $550/Month. So you are paying $440,000/Month as salary expenses or $2,750 per Hour. So you are spending money for each minutes. Will you still say, I don’t care what they doing, I only care about output. But I am sure, some fine tuning can reduce upto 20% time that they are spending and it not only include salary expenses but also utility bill. Each minute the employees are spending office is increasing your utility bill which always impact your bottom line.

Now what will you do? I cannot tell you the correct answer, but I can give you come tip that can help organize your task force more efficiently.

There are different kind of people working on different department. Work process is not very similar. So you have to apply different strategy to track, how many time they are spending on which work. Here I am taking example of a sales department, where we assume 100 people are engaged just for invoice making. Ask your MIS manager their invoice frequency record. If you visualize those data, you can see, there are some when they don’t need to make any invoice. This is idle period. All though they are not working on those lazy period, still you have to pay.

Please see the figure 1, where log of two employees are recorded. Now you sort the data (As Figure # 2) and will see 20% of the total time is idle which is 96 minute of total working time.

Now you see, if you can save 96X100 = 9600 minute/Day or 192000 minute/Month (3200 Hour) which is equivalent to $ 11,000. Isn’t it a big saving to you?

Please don’t get me wrong. I am not telling you to fire the additional employee. You can involve them to focus some other work to get qualitative result.

You can track time using different tools/Software. You can customize your own tools or there are numbers of time tracking and time management software. But Before selecting any system please make sure that have the following features more or less.

  1. Automatic Time Capture
  2. Billable & Non-Billable Hours
  3. Billing & Invoicing
  4. Employee Database
  5. Expense Tracking
  6. Mobile Time Tracking
  7. Multiple Billing Rates
  8. Offline Time Tracking
  9. Online Time Tracking
  10. Overtime Calculation
  11. Time per Project Reporting
  12. Vacation / Leave Tracking

According to our expert, we have ranked the following system as top ten Time tracking system.

  1. Time Doctor
  2. Hubstaff
  3. Zoho Invoice
  4. Timesheets.com
  5. NetDispatcher
  6. Zoho Invoice
  7. Replicon
  8. Nutcache
  9. Avaza
  10. Grindstone
  11. eResource Scheduler

Its important to understand that no employee like tracking their works. So implementation this sort of system is really challenging. You have to motivate the staff and line manager financially and non-financially. And you have to ensure performance based remuneration system in your Payroll. To get quick result, recommending you to stop using Facebook like social media sites in office because its really a time killer.

8 easy steps to learn Journal entry

I know, many of the Accounts student journal entries, they just memorize which is not a good idea to understand accounting very well. Every day I get tons of email, requesting me to write article on journal entries.

To me Journal Entry is very easy. It is not something, that you have to memorize. You must have to understand it by your heart. 8 Easy Query will help you to understand, what will be the journal entry. In the transaction you need to query, what happen with your company? Generally there will be eight type of event can happen after one successful transaction.

  1. Increase Asset
  2. Increase Expenses
  3. Decrease Asset
  4. Decrease Expenses
  5. Increase Income
  6. Increase Liability
  7. Decrease Income
  8. Decrease Liability

Now I will discuss each of the case with some simple example:

Your Company Purchased 1 Laptop worth $ 1,000, on credit from IBM. What happen here? Asset increased (As Laptop purchased) and Liability increased as Company have to pay the sum to IBM

Fixed Asset – Laptop …………. Dr. 1000

Accounts Payable – IBM …………………..Cr. 1000

Now company payed cash $ 1000 to IBM to settle the credit. What happen now? Cash (Asset) decrease and Credit (Liability) decrease

Accounts Payable – IBM …………..Dr. 1000

Cash…………………………………………………………..Cr. 1000

Company sold their finished goods to wholesaler on credit worth $ 23000. What happen here? Companies Finished Goods (Asset) decrease and increased Accounts Receivable (Asset) increased.

Accounts Receivable – wholesaler …………………..Dr. 23,000

Finished Goods …………………………………………………………….Cr. 23,000

Company received Cash 20,000 against sale. What happen here? Cash (Asset) Increase and Accounts Receivable (Asset) Decrease.

Cash……………………………………………………..Dr. 20,000

Accounts Receivable…………………………………Cr. 20,000

In a nutshell I can summarize the issue as follow and it is golden Rules of Accounting

  1. Increase Asset Debit
  2. Increase Expenses Debit
  3. Decrease Asset Credit
  4. Decrease Expenses Credit
  5. Increase Income Credit
  6. Increase Liability Credit
  7. Decrease Income Debit
  8. Decrease Liability Debit

If you still confused, please feel free to comment, what you want to know more. I will try my level best to let you know the procedure for learning journal entry