At a point when businesses are so technology-driven, manual timesheet methods sound like a thing of the past. It brings to mind your first job at a grocery store 20 years ago when you had to punch in and out on one of these bad boys.
But believe it or not, 38% of U.S. employees still use paper timesheets and punch cards. The result? Losses in productivity, income, and your precious time.
Today we’re covering some of the downsides associated with manual timesheet methods. Whether you’re a one-person operation or a business with dozens of employees, it’s time to consider your other options.
The 411 on manual timesheet methods
Manual timesheets require employees to track the time they worked by hand. Traditional methods include paper-based forms such as physical punchcards or weekly timesheets. Some businesses have transitioned to a digital approach, using Excel or Google Sheets to track hours. However, this still requires employees to enter the program and manually record their work throughout the day.
More than two-thirds of US employees submit a timesheet on a daily or weekly basis, but 22% submit one twice a month. That’s a lot of work to account for in one fell swoop.
It’s 2025—why do so many of us still use manual timesheets?
While we haven’t quite reached a Jetsons-level reliance on technology, you have to admit that the world we live in is a digital one. Our love for (or dependence on?) tech is obvious in the need to constantly have the latest gadgets or in the way so many jobs require the use of technology.
So, with tech usage only becoming more prevalent, why do more than a third of US businesses still use manual time sheet methods?
I’d argue it’s for several reasons—
First, the cost of these manual time tracking methods is next to nothing. Paper and pencil timesheets run you a few cents. Google Sheets—especially for businesses who are using the Google Suite products—is basically free. These low prices may keep businesses from even considering an alternative. A lot of time tracking software options require a monthly subscription that companies are unwilling to pay, especially if they’re supplying an entire team with the software.
It’s also an undeniable fact that some business owners and executives simply don’t want to try something new. The “If it ain’t broke, don’t fix it” mentality keeps them on a familiar path, unwilling to swap out manual timesheets for a digital approach.
Finally, some business owners simply may not see (or have) a need for anything other than manual time tracking. This could easily be the case in industries where employees rarely use technology to complete their jobs. People with a trade—like hairstylists, plumbers, or woodworkers—might not need a digital tool to track their work when they spend all day working with their hands.
Not everyone needs to move away from the traditional manual timesheet methods. However, for businesses that could benefit from utilizing a digital system, there are some unintended consequences from maintaining the status quo.
The consequences of manual timesheets on freelancers & entrepreneurs
If you’re working solo as a freelancer or entrepreneur, tracking your time can seem a little pointless. Sure, you need to log the time you work for your hourly contracts, but what’s the point outside of that? You started your own business to be your own boss. You shouldn’t have to answer to the man, even if that man is yourself!
As a small business owner, you may also be working with a small budget. Manual timesheet methods are low-cost (read– FREE) and an attractive solution when you’re juggling other software for your business.
The hesitation in using a digital time tracking tool isn’t a new concept– we talked about it just two weeks ago. You may have decided to find a middle ground by manually recording your work throughout the day. That’s absolutely a good place to start—but it’s not necessarily an ideal long-term solution.
Here’s why—
Inefficiency
Owning a business means juggling two kinds of work: work for your clients and work for your own business. Both are valuable, but only one directly generates income.
Manual time tracking takes up time you could be using to send proposals, complete client work, or improve your advertising efforts. When you streamline tedious administrative work like logging your hours, you free up billable hours that can add to your bottom line.
And speaking of billable hours…
Missing out on billable hours
Manual time-tracking methods often fail to capture all client-related work. You may not always account for the 10 minutes you spent replying to a Slack message before bed or the half-hour you spent researching your client’s competitors. This costs you the money you rightfully earned but failed to claim.
Inaccurate tracking also opens the door for scope creep. If you’re contracted for 10 hours of work a week, you want to limit yourself to those 10 hours. When you fail to accurately record all of the time you spend on a client’s project, you may not even notice as your workload grows outside of your contractual agreement until it snowballs into something that’s impacting the rest of your work and feels uncomfortable to address.
Impacts on your professional image and client relationships
Imposter syndrome is very real, and it can deprive you of feeling like a professional even though you are one.
I’m not saying that you’re not a real business owner if you don’t utilize a million kinds of technology, but using a few key pieces of software can make you feel more like a professional and give you confidence in navigating your client relationships.
Time tracking software that integrates with your invoicing system makes it easier to send professional invoices. If you experience any hourly billing disputes, you’d probably prefer to reference your time tracking software data instead of sending a picture of a paper where you wrote down your hours for the week.
Missed opportunities for data-driven decisions
Manual time tracking—if it’s accurate—gives you a broad overview of how you spend your time. You can see that at 9:00 you worked on Project A and at 10:30 you switched to Project B. You have a general idea of how many hours you worked that week and how much time you spent on various tasks.
But time tracking software is rich with data about your work habits.
Take this snapshot of my work patterns for the month of December—
My working hours typically span 9 am-3 pm. From looking at this report, I can tell that my productivity peaks about midway through the day. This helps me know when to schedule my writing work and when to schedule administrative and communication-related tasks as bookends to my day when my focus isn’t as strong.
A Google sheet listing what I did that day isn’t going to give me the same kinds of insights.
The consequences of manual timesheets on a business
I know that most of you are freelancers and entrepreneurs—small business owners looking to optimize their processes and increase their revenue.
But many large corporations are still stuck in the early 2000s, asking employees to manually account for their hours while spearheading million-dollar projects. I used to teach in one of the largest school districts in my state, with a working annual budget near $30 million, and classified staff submitted their timesheets on a piece of paper that was popped into their employee mailbox each week.
In a recent blog post, our CEO, Brian Ficoa, shared that RescueTime frequently fields requests from companies who are looking for a way to monitor their employees’ work. I want to speak to those readers as well, outlining the pitfalls of manual time tracking and suggesting a middle ground to help track time worked without acting like Big Brother.
Manual timesheet methods are financially inefficient over time
On the surface, manual timesheets sound affordable. They don’t require companies to invest in time tracking software or the associated costs—additional licenses, training, etc.
However, the time inefficiency of manual time tracking also has a cost, in terms of both money and productivity. The time that employees spend tracking and entering their time each week is taken away from hours they could be completing actual company work. But the cost doesn’t stop there. Managers or payroll employees then have to take all of that information and transfer it into the payroll software. Instead of mentoring employees or overseeing projects, managers are spending their time making sure people are paid correctly.
We’re prone to human error
Manual timesheets are more prone to being wrong than being right. Research shows that US employers have to correct mistakes on 80% of timesheets submitted by employees. Most often it’s because employees can’t remember their exact hours or they forget to clock in or out.
Compliance issues
Employees want to be paid for every minute they work—and rightfully so!
Lawsuits related to the Fair Labor Standards Act have risen by 417% since 1997. While the majority of these lawsuits relate to restaurants, hotels, healthcare providers, and construction companies, they can be filed against any company not following the legislation outlined by the FLSA.
For example, the FLSA requires that timesheets have to be kept for 2 years. However, only 16% of business owners are aware of this law, and only 36% know that they need to keep payroll records for at least 3 years. There are a lot of businesses out there that haven’t maintained the appropriate records because who wants to hold onto filing cabinets full of timesheets?
Employee dissatisfaction
A friend of mine was recently entering her time for the week on the digital platform that her company uses for timekeeping. As she vented about the complexities of the program, she snarkily noted, “But they offer a class on how to enter your time if I want to attend that!”
Few employees enjoy the manual process of entering their time. It takes away from time they could be spending on more meaningful work. Making sure every moment is accurately accounted for can also result in stress and anxiety.
It’s time to shift to automated time tracking solutions
For small businesses, teams working remotely, and freelancers, RescueTime created a new product to automate time tracking and provide insight into where their time went each day.
RescueTime Timesheets simplifies timesheet generation, reduces manual entry time, and enhances team productivity by automating tracking and task assignments. Our automated timesheets eliminate the worry you have about logging your hours correctly or missing out on billable hours you never recorded. It includes simple tracking tools so you’re always up to date with your project status—and therefore on track to meet your deadlines.
Timesheets also integrates with GitHub, Asana, and Trello to help you track the work you complete for each of your clients. Calendar integrations with Google and Outlook allow you to see meetings on your daily timeline.
When you try RescueTime, you get Timesheets for free. What are you waiting for?
