28 Oct 2022
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Guide To Timesheets Automation – What It Is & Where To Begin

Manual processing of timesheet documents wastes resources and increases operational costs. You can speed up payable processes and significantly reduce your spendings by automating timesheets – using a fixed template, scanning, and performing data extraction.

Depending on the size of the business, physical timesheets can cause quite a bottleneck for smooth operations. This article will provide valuable insights to small business owners and executives who wish to automate their timesheet processing, in particular:

  • What is the purpose of using timesheets?
  • Types of extracted data from timesheets
  • What is an automated timesheet?
  • The downsides of paper-based timesheets
  • Benefits of timesheet automation
  • Intro to Alphamoon’s solution for timesheets automation

A timesheet is a document that collects information on how many hours each employee has worked in a given time. They’re usually tables, Excel files, or simple Word templates containing employee information. This document can be paper-based or digital.

Dating as far as Hammurabi’s days, timesheets helped create a coherent view of workers’ performance. Ever since the Billable Hour was invented in the 1950s, timesheets have also included crucial insights into the duration of performing particular tasks. It’s no surprise they instantly remind you of blue-collar workers, punch cards, or wall-mounted readers because they’ve been universally used across all manufacturing sites in the 19th and 20th centuries and are used in such untampered-with manner till today.

Code of Hammurabi
Code of Hammurabi, Source: History.com

What is the purpose of using timesheets?

While some job professions aren’t so dependent on hours-based wages (i.e., management positions), a majority still rely heavily on hourly rates – from freelance writers, developers, and consultants to construction workers.

Timesheets are documents of supervision use, but they also play a part in cash flow forecasting and monitoring the number of overtime completed by the team (information subsequently used in assessing the needs of new hires). As such, timesheets can be used by Accounts Payables, but also various executives, team leaders, and operations managers. We’ve established already that the information about each employee’s working hours constitutes the baseline for payroll calculation.

Supposing an employee worked 60 hours in a specific pay period, the supervisor can adjust the timesheet to include the precise tasks performed by that person, the time it took to complete those tasks, and any associated deliverables. If that employee receives 10 EUR per hour, then the monthly salary is 600 EUR (that is before tax deduction). Following that logic, each employee’s timesheet determines the amount to be paid as a monthly salary.

Is it mandatory for businesses to track time with timesheets?

The answer depends on the regulations on the national level.

In the UK, a timesheet is a legal document every business needs for monitoring reasons. Meanwhile, in Poland, this obligation depends on the form of employment. It is recommended to do proper research in the country where you pay your taxes to avoid penalties.

Types of extracted data from timesheets

Although the requirements may differ on a company basis, there is a range of information pieces usually extracted from a timesheet:

  • Name and surname of the employee
  • Date
  • Time stamps: clock in and clock out

In some cases, timesheets may also include the following:

  • ID or passport number (i.e., construction sites)
  • Information on project/client name (i.e., agencies or software houses that “rent” teams to their clients)

Note: Timesheet automation software can be fine-tuned to extract only the fields you need for further processing. Talk to our sales team to create a dedicated timesheets automation workflow.

Timesheet template

What is an automated timesheet?

Understandably, the form of a timesheet – digital or paper-based – often depends on the company’s infrastructure or general level of digitization. Despite the vast range of automation applications in a workplace, timesheets are still rarely automated across various industries. Usually, the main reason for that is the generally low level of technological advancement in the workplace.

Automated timesheets are ready-to-use digital templates that help executives collect all necessary information in a way that complies with the consecutive processing steps. Software that automates the processing of timesheets can perform a range of tasks, including:

  • Specify the template of a timesheet
  • Scan each paper copy and turn the image into the text
  • Extract annotated fields containing information
  • Generate a report (usually a CSV file) that contains all the data from timesheets for a given pay period
  • Validate the number of timesheets provided
  • Provide insights for Account Payable and H&R teams
Tasks that timesheet automation performs

The downsides of paper-based timesheets

Before we dig deeper into timesheet automation, let’s discuss the inefficiencies caused by physical timesheets. While paper-based timesheets may seem easier to work with, the truth is that they open gates to many issues happening.

In general terms, physical copies of documents are prone to disappearing or sustaining damage. It’s easy to spill coffee on a piece of paper or get a few timesheets mixed up in the shredder, but it’s no longer fun when you are obligated to provide evidence for all the billed hours to your client or a regulatory body. Then, having a digital copy means the world.

Perhaps a more timely downside is using paper itself.

One way or another, your business has an impact on the environment. The scope differs, obviously, but we’re all guilty of excavating resources and damaging the planet. Luckily, even minor changes in your operations are a necessary drop in the ocean, and turning away from paper-based timesheets is one of these pro-sustainability upgrades.

Note: Carry on reading about sustainability in intelligent document processing – we’ve created a pretty neat case study with data concerning power consumption and the actual costs of document automation.

Due to paper-based timesheets, you will incur maintenance costs (i.e., the paper used for printing, energy costs for scanning them), deal with errors and purposeful manipulation of data (messy handwriting, the so-called buddy-punching), and see your employees’ morale and job satisfaction deteriorate (i.e., due to long queues to clock in and clock out).

Forget Excel reporting – the benefits of timesheets automation with Alphamoon

So what are the benefits of automatic timesheet processing? Take a look below.

  • Significant cost reduction

The all-time favorite of business owners – cost reduction. Some companies hire employees whose only task is to introduce data from timesheets to a digital form, which is a fully automatable task. These employees can switch to more challenging projects, generating more value for the business.

  • Swift implementation

Deploying Alphamoon is a no-brainer. Timesheets are sourced from a folder – Dropbox, GDrive, OneDrive, etc. – and then processed in a short time directly in the platform. Our software operates with a simple, intuitive UI and enables you or your team to download reports in CSV.

  • Short learning curve

Compared with processes requiring lots of employee training, automation of timesheets can happen in a matter of days. On top of that, the operational aspect isn’t challenging even for the less tech-savvy workers, so adopting the technology will not be a months-long implementation.

  • Shorter procure-to-pay time

Automating document extraction makes your timesheets a data source for any subsequent operation. You may use the billing hours to feed invoices or transfer monitored hours into project management tools. Alphamoon’s engine handles data extraction from invoices and corrective invoices with up to 98% accuracy. For an even more seamless experience with documents, data from the timesheets can also be integrated with your invoices system so that billing hours are directly sourced from timesheets into your invoices.

  • Smoother billing of clients

Instead of manual calculations, which tend to be error-prone, automated timesheets will let you keep your client billing more transparent and more understandable.

Note: We actually distinguish 10 benefits of automated timesheets. We described them in a separate article that you can read here.

Alphamoon’s solution for timesheets automation

Does the above sound like a solution to some of your headaches?

Alphamoon’s platform for intelligent document processing simplifies the management of timesheets. The core components of our engine include AI-based OCR and data extraction, as well as an easy way to integrate with your existing systems through API. With timesheet automation, you’ll improve your payroll process, keep a better grip over overtime, and have a simple way of sourcing data from timesheets directly to other systems you’re using.

Over to you – you can keep missing out on the opportunity or get in touch with us and start automating your timesheets (we strongly recommend the latter!).

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