Why Freelancers Should Care About Accurate Time Tracking
Running a small business is a lot to handle. Between taxes, employees, customers, and more, it requires a lot of complex documentation. The importance of accurate timekeeping in small businesses cannot be understated. Without exact times, transactions, contracts, and expenses can accidentally become inaccurate and end up costing even more money.
Accurate bookkeeping means tax opportunities
The most obvious reason for good timekeeping is simply keeping the books as detailed and as correct as possible. Many digital tools have built-in timestamping capabilities which makes logging information easy. Register programs and transaction services typically provide a readout for the time and date a customer made a purchase. This information will need to find its way to a log sheet—especially in the case of online services, as data storage may have a time limit. Do not rely on programs and services to keep the books for you!
Keeping everything legal
One group very concerned with the importance of accurate timekeeping in small businesses is the IRS. With accurate timestamping on all transactions and records, any audits that may occur will be much easier to deal with. In addition, state and federal laws have varying rules on what is permissible in terms of employee income and hours. What is right for one employee may not be for another based on health, age, and other factors. By knowing what each employee can work on and recording worked hours accurately, a business can stay well within the safe limits of the laws.
Compensating employees or contractors
Besides ensuring every employee works the hours they are allowed based on laws, paying employees accurately is essential. In big business, this is less of a hassle, as physical buildings usually have expensive synchronized time clock systems for accurate time punches. Just because small businesses do not always have access to these tools is no reason to have employees jot down rough time estimates into log sheets and notepads. There are many digital programs and web services that enable traditional-style time punches without major installations. There are even small plug-and-play time synch tools that can ensure remote and international employees are creating accurate punches in the same time zone as the rest of the business.
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