How to Evaluate Time Tracking Systems: A Buyer’s Guide

For the average person, tracking time can be incredibly boring or even an invasion of privacy. But for someone running a business, keeping tabs on time is the key to increased efficiency, productivity, and profitability. It’s also essential if you’re billing clients by the hour. 

Of course, time tracking methods aren’t made equal. Manual tracking with spreadsheets and notes belongs in the past — it’s clunky and requires hours of mind-numbing work. In contrast, time tracking software allows you to track projects with ease as you grow your bottom line. 

If you’re searching for a new time tracking system, you may be confused by the range of price points, features, integrations, and use cases available. This guide answers all your questions (and then some) to learn the most important aspects of purchasing a time tracking tool.

5 signs you need a time tracking system

Time tracking software does more than just track your team’s working hours. It gives you insight into the health of client accounts, the wellbeing of your employees, and measures the gap between the hours allocated to a project — and the resources actually used. 

Here are five signs it’s time to invest in a time tracking system 👇

1. You are using spreadsheets (like Excel or Sheets). Manual spreadsheets make it difficult to track real-time progress or adjust for project changes. Not only is tracking projects, time, and tasks manually prone to human error, it’s also inefficient and time consuming. 
2. Your team isn’t meeting project deadlines. Frequent delays or missed deadlines is a warning signal of a lack of visibility into how your team spends its time. A time tracking system shows where time is allocated, what tasks your team are working on, and whether resources are being used effectively.
3. Your customers question where time was spent on their project. If clients are asking where time went or doubting the value provided, it’s a sign you need a system to clearly show how effort aligns with deliverables.
4. You have zero insights or reports into projects. Without real-time data or historical reports, you can’t analyze trends, allocate resources effectively, or anticipate project bottlenecks.
5. You struggle to maintain accountability in your team. Disorganization or lack of clear accountability among team members can lead to wasted time, scattered capacity, or overlooked tasks.

If any of the above pain points resonate with you, it might be time to think about using a time tracking system.

What does a time tracking system do, and do you need one?

A time tracking system is much more than a stopwatch. The right platform has other key benefits besides telling you how much time you spend on a task or project:

1. Profitability

Profitability tracking is used to plan and estimate internal and client projects. It’s easy to compare the estimated time to your team’s actual time on a task.

Why it’s helpful 👇

• Determine your utilization rates, also known as how much of your total work is billable. For example, our research showed that design agencies have a high utilization rate of 70%, meaning they can bill clients for 70% of their work. The other 30% can then be comfortably allocated to non-billable work, like admin tasks, without worrying about making the project unprofitable. 
• Analyze data gathered from time tracking to deliver good client work while remaining profitable and accurately forecasting costs, revenue, and necessary time for future projects.

2. Productivity

Productivity tracking logs your time according to clients, projects, and tasks.

Why it’s helpful 👇

• Understand how much of your work time is productive, as opposed to scrolling TikTok or chatting with coworkers.
• Learn how long time individual tasks take, helping you forecast future projects more accurately.

3. Forecasting & planning

This feature determines how each project’s allotted time is used. For example, if it’s the 25th of the month and only 30% of the retainer hours are used for the client, the manager can be alerted and then decide how to strategically use the remaining time for the biggest impact.

Why it’s helpful 👇

• Monitor hours worked compared to forecasted hours for each client to see if a project is progressing as planned, if it’s profitable and if team members are completing the most valuable tasks.
• Determine the cost of individual tasks and compare them to the time a team member puts into them.

4. Precise billing & invoicing

Useful to set hourly rates for specific clients, types of work, and employees. Bill your clients accurately down to the last cent and create invoices based on the time entered by your time.

Why it’s helpful 👇

• Distinguish between billable and non-billable hours and remain profitable.
• Use built-in invoicing to create invoices with a few clicks, shortening the time from the created invoices to getting paid.

5. Time tracking for legal requirements

Many countries and states now require employers to track employee time for compliance and legal purposes. Time tracking can accurately record how long employees work for and if they are getting mandated breaks.

Why it’s helpful 👇

• Track time accurately for your team members and comply with federal and local laws, such as the Fair Labor Standards Act (FLSA) and EU Working Time Directive (EWTD).
• Track overtime easily and pay your employees fairly for the extra work.

When a time tracking system makes sense

Most businesses that want to stay on track, profitable, and productive could benefit from using a time tracking app daily. Here’s how to tell if your business needs a time tracking system:

You don’t know the difference between your billable and non-billable hours	You struggle to determine which clients and projects drain your time and resources
You can’t accurately forecast how much time your team will spend on a project	You must comply with legal requirements and have accurate timesheets for each employee
You frequently price project work by the hour or completed project	You want to balance your team workload better to prevent burnout and poor employee engagement
You can’t cope with manual time tracking through timesheets, tables, and documents	You need to distinguish between profitable projects or clients that hog more time than they pay for

To get the most out of a time tracking system, most teams require a paid software. So, the next part of evaluating whether it’s a viable software for your team is to calculate the ROI.

Calculate the cost of a time tracking system vs the ROI

There are plenty of free time tracking apps out there, and if you’re just starting, it’s only natural to consider these first. But purchasing a time tracking app is an investment rather than a cost. Although many require you to pay per user or seat, the return on investment can be massive over time.

You can track the ROI from your time tracking platform by:

• Comparing your profitability for each project against your time on it
• Considering the more accurate billing process, as you charge each client for the exact amount of time spent on their project
• Discovering productivity bottlenecks in your client roster and your team
• Determining what accounts for billable and non-billable time
• Having more data to make data-driven decisions instead of trusting your gut feel

Free time trackers are a good starting point, but if you’re serious about increasing productivity and profitability, they’re not a good long-term solution.There are certain downsides to using a free tool that can limit its overall impact on your operations:

❌ They may have limited or zero report customizations available
❌ It’s often not possible to add billable rates for individuals, teams, and projects
❌ You’ll usually lack forecasting, project analysis, and integration capabilities

While you may start on the free plan, this is not the best for larger teams needing better insights into profitability, billable rates, and capacity.

Must-have functionalities of a time tracking system

Choosing a time tracking system can feel incredibly difficult simply because of the enormous choice in the market. Here are the features you should look for in a time tracking system, at a minimum.

1. Ease of use

If you’re spending money on a tool, you’ll want your team to use it. Time tracking won’t come naturally to your team in most cases, and if the tool is easy to use, adoption will become easier, too. Also, using a time tracking app will become second nature if it integrates with your existing tech stack.

Here’s how to assess if a time tracking system is easy to use:

• The user experience should be straightforward, allowing you to add users easily, set reminders and alerts, and create workspaces.
• It should integrate with existing tools, such as project management, development, invoicing, design, and others.
• It should be available on multiple platforms and devices, e.g. desktop, web, and mobile
• It should have good customer support that functions across different channels, such as email, live chat, Slack, and phone.

How to evaluate this:
✅ The vendor promises minimal learning curve
✅ Product walkthrough to help you pick up the basics
✅ Proven examples of other teams easily adopting the time tracker into their tech stack

2. Flexibility

To increase adoption with your team, the time tracking app should be flexible and accommodate their needs instead of disrupting the way they work.

• Ideally, the tool should have automated time tracking. You hit the “start” button, and the tool automatically switches back and forth between apps in the background, accurately logging tasks and projects.
• A variety of apps, such as web, desktop, and mobile, make user adoption even easier
• The tool should integrate seamlessly with the apps you already use. For example, if you already use Trello for project management and Quickbooks for invoices, pick an app that has native integrations with both.

How to evaluate this:
✅ The platform offers different ways to track time
✅ Automated time tracking
✅ Integrations with apps you already use

3. Reporting and analytics capabilities

Tracking time is just the beginning of getting in control of it. Reporting features deliver an overview of how your team spends their time at work, which clients and projects take up their days, the ratio of billable and non-billable hours, and more. Look for:

• Tools that have metrics such as burn rate (billable/non-billable hour ratio)
• Project cost based on time tracked
• Project profitability (the ratio of projected vs. estimated revenue)
• Detailed timesheets

How to evaluate this:
✅ Project time estimates
✅ Billable rates/labor costs
✅ Different reporting views (e.g., pie charts, table charts, timelines, filters)
✅ Sharing options and export formats (e.g., scheduling automated client emails or public link sharing)
✅ Customizable dashboards for continuous reporting on data that matters to your company

4. Data security

The data generated by the time tracking system should be available to you and your team only. This is especially relevant for heavily regulated industries where client data should be protected at all costs.

Look for:

• Enterprise-level security
• Data encryption in transit and at rest
• Secure servers with protection against cyber attacks

How to evaluate this:
✅ Access rights
✅ TLS 1.2 protocols
✅ AES256 encryption
✅ SHA2 signatures (as supported by the customer)

How to validate time tracking vendor support

While a lot of time trackers look similar on the surface, many of them only offer the basics like time entry tracking or basic reports. To get the most out of your time tracking system, the vendor must offer detailed guidance and support for your team.

Here are some areas of support you should expect.

📚 Detailed guides

Many of us like to self-serve problems and troubleshoot to solve issues quickly. Research if chosen time tracking vendors have detailed guides and knowledge bases available to get answers to your questions. Some vendors also have communities where users can discuss quick solutions and tips.

🤝 Onboarding help

Your vendor should offer a customized onboarding process to ensure your new Toggl Track program fits into your team’s workflow. This could include sharing onboarding materials and videos, to training and priority support if needed.

🧑‍💻 Dedicated Customer Success manager

Larger teams or those with complex requirements can require ongoing expertise, feature assistance and even custom solutions to optimize their specific workspace. An Enterprise-grade time tracking software should offer a dedicated customer success manager to these teams to maximize the value of their time tracking system.

Successful companies using time tracking systems

Businesses of all shapes and sizes use time-tracking systems to increase profitability and productivity while making their teams and customers happier. These are some of the best examples.

Talk Shop Media saves 80 hours a month on time tracking while improving operations

Talk Shop Media is a full-stack marketing agency with around 50 people covering a variety of professional services, from PR to SEO and paid ads. Their previous time tracking app had a dated interface, and the reports were limited, leading to compliance issues.

After getting started with Toggl Track, the team spent 50% less time on time tracking, resulting in 60-80 hours won back every month. The reason? The simple and user-friendly interface.

With Toggl Track, Talk Shop Media created comprehensive reports on profitability, account health, and employee wellbeing. Toggl Track allowed them to collect and analyze data for reports without additional work.

The end result was the ability to identify accounts that needed extra attention, such as restructuring the retainer agreements and project rates.

“Time tracking data is crucial for us. If you need to know the health of your accounts, there’s no other way to figure it out without time tracking. Advanced and visually appealing Toggl reports and easy-to-use UI translated into much better company-wide time tracking compliance and accuracy of data.”

Hannah McClenaghan, Operations Manager, Talk Shop Media

FullStack Labs uses time tracking data to win more business

FullStack Labs is a software consultancy that grew from 70 to 600+ people in a very short time span. In a very crowded space, FullStack Labs stood out by providing clients with transparent Toggl Track reports to each client.

Instead of templated invoices with just a few lines and a sum to be paid, they included a breakdown of the delivered work along with who did it. Using Toggl Track time reporting in their pitches allowed them to win major clients such as Uber and multiple Fortune 500 companies.

On the operations side, this reporting practice allowed them to retain their top performers. Thanks to detailed reports, they compensated their team fairly and accurately and paid them overtime on top of their salary.

How to set your business up for success with Toggl Track

Toggl Track is a time tracking system you can adapt and customize to suit your company. From small teams to enterprise businesses, we’re confident we’ve got your use case covered.

If you have a small team, you can start as low as $9 per user/mo. Enterprise businesses can use some of the more advanced plans, which include features such as forecasts, analyses, SSO, timesheet approvals, and more.

Toggl Track offers much more than simple time tracking. Some standout features include:

✅ Billing and invoicing
✅ Payroll processing
✅ Project time tracking for multiple projects at a time
✅ Client management
✅ Detailed reports and analytics across employees, projects, and clients

Toggl Track integrates with the tools you love and use every day, including Asana, Jira, Github, Salesforce, Notion, Slack, and Zapier. Not only are there 100+ tools to choose from, Toggl Track also  has a custom API to fit into any tech stack.

If you don’t have a diverse tech stack to integrate with, you can use our browser extension and easily track your time using tools such as Notion and Zendesk.

Even though it may sound complex with its rich feature set, Toggl Track is incredibly intuitive and easy to use. Even if your team has never tracked their time before, adopting and mastering Toggl Track is as easy as pie.