What is timekeeping?

Timekeeping is the process of recording employee work hours for payroll calculation, overtime determination, and labor cost tracking. For professional service firms, timekeeping serves dual purposes: paying employees accurately and tracking billable hours for client invoicing.

Key characteristics

• Records hours worked

• Basis for payroll

• Required for non-exempt employees

• Supports overtime calculation

• May track billable time

• Various methods available

Why it matters for professional service firms

Accurate timekeeping ensures proper pay, overtime compliance, and billable hour capture. Poor timekeeping creates payroll errors and lost revenue. Professional service firms should implement timekeeping systems that serve both payroll and billing needs.

Real-world example

David implemented a timekeeping system: employees logged daily hours by project/client, the system calculated total hours for payroll, flagged overtime for non-exempt staff, and generated billable hour reports for invoicing. Weekly timesheet approval ensured accuracy. The system served both HR (payroll) and operations (billing) needs efficiently.