Inaccurate time tracking costs businesses money in two directions: underbilling clients and overpaying employees for time not worked. For businesses that bill by the hour or pay hourly employees, the time tracking system you use directly determines payroll accuracy, client billing precision, and the quality of your profitability analysis.
FJ & Associates, PLLC integrates time tracking data into payroll and bookkeeping engagements — ensuring hours translate correctly to pay and invoices.
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Top Time Tracking Platforms for Small Businesses
- TSheets (QuickBooks Time) — Best for businesses already on QuickBooks Online. Direct QBO integration pushes hours directly to payroll. GPS tracking for field employees. Mobile app. Scheduling features.
- Toggl Track — Simple, intuitive, and free for small teams. Best for professional services firms and consultants tracking billable hours across clients. Integrates with many project management tools.
- Harvest — Strong invoicing integration — converts tracked time directly to client invoices. Ideal for agencies and consultants who bill hourly and need seamless time-to-invoice workflow.
- Clockify — Free for unlimited users. Basic feature set; best for businesses that need simple tracking across a large team without per-seat costs.
- Deputy — Best for shift-based businesses (retail, restaurant, hospitality). Scheduling, timesheets, and award compliance in one platform. Integrates with most payroll providers.
- Homebase — Popular with restaurants and retail. Free tier available. Strong scheduling, clock-in/clock-out, and overtime alert features.
What to Look for in a Time Tracking Solution
| Feature | Why It Matters |
|---|---|
| Payroll integration | Hours flow directly to payroll — eliminates manual entry errors |
| Mobile app | Field employees and remote workers can track from anywhere |
| GPS tracking | Verifies location for field-based employees; deters buddy punching |
| Overtime alerts | Flags approaching overtime thresholds before they’re triggered |
| Project/client codes | Allocates time to specific projects for profitability analysis |
| Approval workflow | Manager reviews and approves timesheets before payroll runs |
Time Tracking for FLSA Compliance
The Fair Labor Standards Act (FLSA) requires employers to keep accurate records of hours worked by non-exempt employees. Inaccurate records — even if inadvertent — create FLSA wage and hour liability. A reliable time tracking system is your documentation defense.
Key FLSA considerations:
- Non-exempt employees must be paid overtime for all hours over 40 in a workweek
- Rest breaks under 20 minutes are compensable; meal breaks of 30+ minutes (duty-free) are not
- Time worked before a scheduled shift (“pre-shift work”) is compensable if the employer allows or is aware of it
- Remote employees’ working time must be captured — not just scheduled hours
Time Tracking FAQs
Do I need time tracking for salaried employees?
For exempt salaried employees, time tracking is not required by FLSA. However, tracking project time for salaried employees is valuable for profitability analysis and client billing in professional services firms.
What if employees round their time?
Rounding is permitted under FLSA as long as it is neutral over time (rounds up as often as it rounds down) and doesn’t systematically reduce pay. Employer-directed rounding that always favors the employer is an FLSA violation.
Can I use a paper timesheet?
Yes. Paper timesheets are legally compliant. They are also the most error-prone, most easily lost, and most difficult to integrate with payroll systems. Digital time tracking is faster, more accurate, and audit-ready.
Get Payroll Accuracy Right at the Source
Ready to eliminate payroll errors and protect your business from wage and hour liability? Contact FJ & Associates, PLLC today.
Call: (801) 927-1337 | Email: admin@cpaone.net
See also: Full-Service Payroll Processing | Payroll Best Practices | Employee vs. Contractor
About the Author: Missy Dennis, CPA | Partner | FJ & Associates, PLLC | Kaysville, Utah
Missy holds a Master of Accounting degree from the University of Utah and is a licensed Certified Public Accountant. She is committed to providing clear, accurate, and actionable guidance so clients can navigate complex financial decisions with confidence. With more than twenty years of public accounting experience, Missy Dennis specializes in: tax preparation and tax advisory; bookkeeping strategy alignment; estate and trust taxation; audit and consulting services; low-income housing tax credits; non-profit accounting; and small- and mid-sized business advisory.
