In-Depth Guide to the Timesheet Approval Process

How do you keep track of your employees’ work hours? If you’re like most organizations, your employees record the number of hours they worked on a timesheet. In the old days, this involved ‘punching’ a physical time card. In fact, this is why human resources professionals still refer to clock-in times as ‘punches.’ Employee timesheets are almost entirely digital today, with some using advanced features like biometrics.

You can’t just take your employees’ word for the hours they worked, which is where the timesheet approval process enters the picture. It’s up to each department manager to review the timesheets their employees submit to ensure accuracy. Otherwise, employees may try to bill for hours they didn’t actually work.

Time theft is a very real issue that affects organizations from all industries. A recent study uncovered that 43% of employees commit time theft by padding their time cards, hence the need for timesheet approval.

Beyond ensuring the accuracy of each time entry, time tracking serves other purposes as well. For example, a solid timesheet approval system will help you stay on budget, and you can gain insights into your workforce’s productivity. However, manual timekeeping is a time-consuming and frustrating process, especially if tackled without the aid of software.

Does your time approval process cause you more headaches than benefits? If so, read on to learn how you can streamline your time approval to save time and money.

Why is timesheet approval necessary?

Employee compensation is always a sensitive process requiring lots of care and consideration. That’s because it’s extremely easy for tensions to run high whenever money is involved. Timesheet approval is a necessary process because it ensures fairness and accuracy when paying your employees.

We’re all human, and we can all make mistakes with timesheet entries. Missed punches are extremely common, and they can cause employees to gain or lose compensation if they aren’t properly addressed. Timesheet approval provides a way for managers to double-check their employee’s time punches to ensure there are no mistakes or missed punches.

It can also reduce instances of time theft, such as an employee using buddy punches to clock in early. If the manager knows they didn’t show up to work until 30 minutes after their punch, they’ll know that something is up.

Other reasons why timesheet approval is a necessity include:

• It ensures proper payroll processing. Whenever a manager submits their employee timecards to payroll, they need to be extremely precise. Otherwise, you could go over budget for the pay period, or you may wind up undercompensating some employees. Taking the time to approve or reject timesheets greatly improves the accuracy of the payroll process, ensuring fair compensation for all employees.

• Recordkeeping for legal requirements. Your human resources department must keep detailed records for all your employees, including their total hours worked for two years. This is actually a legal requirement mandated by the Fair Labor Standards Act (FLSA), so it’s not a step you’ll want to skip. Keeping employee timesheets for two years will also safeguard you against complaints by the EEOC, as you’ll be able to prove when an employee worked for you (including any absences that may have contributed to your decision to terminate them).

• Uncovering performance issues. The benefits of timesheet approval aren’t entirely related to money. Examining timesheets will also let managers know if certain employees are underperforming. This could take the form of excessive tardiness, absences, or not having enough time during the day to complete their tasks.

• Controlling costs. Nothing will eat up an organization’s profits more than overtime, so you must keep a close eye on your employee’s work hours. If your managers aren’t approving timesheets before submitting them to payroll, you may be spending more than you should on labor.

The timesheet approval process

Now that you know why timesheet approval should become a standard practice at your organization, it’s time to learn how to implement it properly.

The following steps will ensure a desirable timesheet approval workflow.

Step #1: Timesheet submission

The process begins whenever an employee submits a timesheet to their immediate manager for review. There are multiple ways they can fill out their timesheets, from clocking in with a biometrics machine to manually filling out an Excel spreadsheet.

How employees record their hours will vary from organization to organization, but time-tracking software has become increasingly common. Each timesheet should have a deadline to ensure managers have time to submit them to payroll. Otherwise, your accounting team won’t have the data they need to pay your employees on time.

Using timesheet reminders (such as automated text messages that go out to your team members) will help your staff remember to fill out their timesheets before it’s too late. If an employee completes their timecard electronically, it’s normal for them to submit it to their manager via email. If they used a physical time card, then they’ll have to hand it to their manager in person.

Step #2: Timesheet review

Next, the manager addresses the timesheets that are currently pending approval. There are two ways to handle this process: manually or automated.

During a manual review, the manager closely examines each time entry from the employee – checking for things like errors, missed punches, time theft, and tardiness. Once the manager has gone over the timesheet with a fine-toothed comb, it’s either rejected or moved on for final approval.

If any mistakes or inaccuracies are found, the manager will reject the timesheet and submit it back to the employee.

Step #3: Editing and resubmission (If there are errors)

If the manager does find a discrepancy in an employee’s billable hours, they’ll have to edit it and resubmit it for approval.

It’s typical for time tracking software to list a timesheet’s approval status, which will let the employee know if they have a rejected timesheet or not. They may also receive an email notification to help expedite the process, as employees must edit timesheets ASAP to receive payment on time.

Reasons why managers reject timesheets include:

• Incorrect number of hours

• Missing punches

• Time off not reported

• Breaks not included

Once the employee adjusts the timesheet, they resubmit it to their manager. If there are still errors, the manager will continue to send it back to the employee until it’s error-free and ready for payroll processing.

Step #4: Approval and submission to payroll

The final step is for the manager to sign off on the employee’s timesheet and submit it to payroll.

A manager’s final approval signifies that everything included in the timesheet is accurate, so it’s crucial for managers to ensure everything is correct. At this point, payroll will bill for the hours as reported, meaning employees won’t have the chance to correct any mistakes before receiving their paycheck.

Having to report paycheck issues is cumbersome for employees and your accounting department, and it reflects poorly on your reputation as a manager.

That’s why it’s common for managers to double-check and even triple-check employee timesheets before approving them.

Things to look out for on timesheets

As a manager, it’s your responsibility to review timesheets for errors and inefficiencies. Not every organization automates the timesheet approval process, in which case managers must manually review each time entry.

If you’re manually reviewing a timesheet, here are the top factors to check.

Employee time punches

The first thing to analyze is the employee’s clock-in and clock-out times for each workday.

Do they tend to clock in at the same time each day? Are they ever more than five minutes late? Do you suspect that they’re having a co-worker clock them in early?

These are all essential questions to ask when reviewing employee time punches. Also, look for any missing punches, as you’ll need to resolve those as soon as possible. This typically involves reaching out to the employee to verify their start and end times for each missed punch.

Time off

Next, verify if the employee used any paid time off during the work period covered by the timesheet.

If you keep track of requested days off (such as in a PTO book), use it to double-check the employee’s punches. If they clocked in and out on a day that they requested off, you’d want to remove those punches to avoid paying the employee for work they didn’t complete.

Breaks

While there’s no federal law requiring lunch or coffee breaks in the US, many state laws require uninterrupted 30-minute breaks for employees working 8 hours or longer.

Accordingly, you’ll have to verify that the employee clocked out for their break each workday, as 30-minute breaks are not compensable. If it’s discovered that you aren’t providing adequate break time required by state law, you could find your organization in legal trouble.

That’s why managers need to check for breaks when analyzing timesheets.

Automated timesheet approval

Organizations that use time-tracking software like Buddy Punch or Homebase can automate the timesheet approval process, which saves managers the trouble of manually reviewing timecards. Instead, the software tracks employee hours, and both managers and employees can access it through mobile apps on IOS and Android devices.

Some project management software like Asana have time tracking features built-in that greatly simplify keeping track of employee work hours. These platforms come in handy when managing a team of remote workers since they can log their hours using mobile devices.

To ensure accuracy, time tracking software automatically notifies employees of things like missed punches, missing breaks, and unreported time off. This reduces manual errors and greatly speeds up the timesheet approval process.

If your managers spend lots of time manually reviewing timesheets, you should consider adopting software that can automate the process. Doing so will actually boost your productivity since your managers won’t have to spend hours looking over timesheets and will have more time to focus on more productive endeavors.

The same is true for your employees. Filling out manual timesheets is cumbersome and wastes time, so automating the process will free up time for your employees, too.

Tips to streamline your timesheet approval process

Using time-tracking software isn’t the only way to speed up timesheet approval. Even if you use automation, you still need to configure an approval process that makes sense.

After all, an automated timesheet functionality won’t matter if your team winds up wasting time going through too many communication channels.

Here are some tips for developing an airtight timesheet approval process.

Set clear submission deadlines

Nobody likes waiting to get paid, so you need to designate submission deadlines well ahead of the next pay cycle. As team lead, you want to have plenty of time to double-check that each timesheet is accurate and for your accounting department to run payroll.

The rule of thumb tends to be for employees to submit their timesheet at the end of their shift on the last day of the pay period.

Adopt technological solutions

Time clock software isn’t the only way to use technology to improve your time-tracking process. For instance, if your goal is to eliminate buddy punching at your organization, adopting a biometric time clock will get the job done.

These time clocks use employees’ biometrics (such as their unique fingerprints) to clock them in, effectively eliminating co-workers’ ability to clock each other in when they aren’t there.

Simplify communication

Ideally, you should have a singular way for your employees to submit their timesheets to you. It could be through time clock software like Homebase, or you may prefer to use email or an instant messenger like Slack.

If your employees aren’t sure how to get in touch with you, it’ll increase the chances of something going wrong. Designate one communication channel for submitting your timesheets, and make sure every employee knows about it.

Train employees properly

Lastly, don’t forget to provide adequate training for your employees on how to keep track of their work hours, especially for new hires. If you have the resources, provide regular training sessions to refresh your employee’s memory.

Whether you use time-tracking software or a physical time clock, it’s integral that your staff know how to use them. As a bonus, well-trained employees are more likely to submit error-free timesheets, making your life as a manager a lot easier.

Final thoughts: The timesheet approval process

Timesheet approval is a necessary business process for all organizations, so why not streamline it? In today’s age, there are plenty of affordable options for simplifying time-tracking, so there’s no reason to continue to use manual time cards or Excel spreadsheets. From software programs to biometric time clocks and beyond, there are dozens of ways to improve the timesheet approval process at your organization.