Do you ever wonder, “where did the time go”? If so, as a business leader, that sounds like a problem, especially to your whole business. As an employee, you may be at risk of getting demoted or perhaps fired if you’re not getting the work done on time. Financial GPS runs on working smarter, not harder, to get more done in less time – even when time is tight and pressures are high.
In this blog, we go over the following:
“A slight change in your daily habits can guide your life to a very different destination.” - Atomic Habits by James Clear
How to Audit Time
A lot can be done in a day, especially if you have a plan already set. Auditing time is simply put, keeping track of what you do during the day. This way you can examine and analyze how you actually spend your time versus how you want to spend your time. There are plenty of productivity techniques out there that promise to make people more productive and feel like things are getting done. However, how do you prove those results and that technique you are using is working? One of our suggestions is recording and time tracking your day so you can then analyze how much time is being spent on a certain task. Time tracking does not only just boost your productivity, but the data that comes from it can be utilized to answer and understand other important business decisions, such as:
Prioritization in projects
Hiring more or letting employees go
Change in processes/systems
This brings up, the question of which time tracking method is best? Everyone’s needs and preferences are different. So, here are a few along with some pros and cons:
This method fits well with those that enjoy writing pen on paper and carrying it with them everywhere. Journals also fit quite nicely with those that are visual forward. It can be bought with the premade templates for people to fill out or if you have the time to get creative, it is flexible with whatever system you might have. Journals are convenient for on the go for CEOs to unwind and reflect at a cafe (that might not provide internet).
This method can become time-consuming (but can be worth it especially if you plan on keeping it as a memoir). If you are following the grid system (where each block represents 10 or 15-minute chunks), it can be a con in the sense not everything takes that clean 10 or 15-minute chunk. Because it is paper, it can get ruined (so handle it with care). Due to this method being high in manual labor, it’s not suggested for a company of any size.
This goes to all the Excel and Google Sheets people. Creating a timetable of what has been done does have the advantage of being digital. This is great for people that enjoy turning data into doing different things such as calculating percentages automatically or making charts/graphs for further investigation.
Depending on how you set up your timetable, it can be a con in the sense not everything takes that clean 10 or 15-minute chunk. Even though this method is medium manual labor, we still do not suggest this for any size company.
Accessible on most devices (phone, computer, etc). Tracks exact time (as long as you remember to turn on/off the timer. There are lots of options with free versions or paid upgrades to export reports and analyze useful data. This has the least manual labor.
No cons here, this is one of the most effective methods to help maximize your days to come.
There are lots of other options for time tracking applications. Plenty of them also offer free trials, so try them before investing fully. Financial GPS’ go-to time tracking tool for business is Harvest. Recording time in an application environment enables supervisors to track the workload of team members and make adjustments based on the reports Harvest creates. Here’s an introduction to getting started with Harvest as a regular user. This video will walk through the basics of time tracking, expenses, and more.
How to Audit Expenses
Now that we have gotten the team to time-track on a regular basis, it’s time to understand the business’s expenses. The objective of the expenses audit is to ascertain efficiency in internal control, check the reasonableness of expenses, ensure accuracy and proper documentation. The following is the fundamental procedure for auditing expenses.
Occurrence Assertion This assertion is where auditors check the reasonability and validate the occurrence of expenses. From expense journal entries to invoice, receiving reports, approved purchases and requests, auditors should ensure the transactions were real. They should check that prices and quantities were correct so there’s no risk of unusual payments.
This assertion is where auditors check the reasonability and validate the completeness of expenses. Looking for any haphazard sample of purchase requests to receiving reports, invoices from supplies and journal entries. All documents present should be accounted for as well. In addition to examining a sample of bank statements, match payments to expenses/purchases.
While tracing and vouching, recalculate the value or the amount of the transactions. Check the quantity charged matches the quantity ordered, price is as quoted, and recalculate line items while checking the total of the order is correct. The expense total should match what is recorded in the journal entry.
While testing completeness, check that the journal entry is correct by matching the accounts used to the chart of accounts.
In a haphazard sample, the journal entries for expenses two weeks before and after the end of the fiscal year make sure to: vouch to proof of receipt of items and goods must be received by end of the fiscal year. When receiving reports and trace journal entries, goods should be received before or at end of the fiscal year recorded in this period.
At the end of the day, time tracking is an essential tool to provide leaders insight into how to make processes smoother and keep team members on the same page. Time tracking provides information if a team member is out sick or if they have extra time they can use for training and room for growth. Overall, this is a vital tool to help people focus on the task at hand.