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Why Is Time Tracking Important in Project Management?

Time tracking isn’t just about tracking your project’s progress. It’s about improving it. Find out why it’s essential for effective project management.


Project management mainly revolves around four pillars: scope, cost, quality, and schedule. Among these pillars, scheduling plays a pivotal role and calls for managing various project tasks within the specified start and end date to achieve the final goal.

Therefore, time tracking is imperative for keeping a tab on the project schedule and ensuring that it is completed within the stipulated timeframe.

Time tracking gives an overview of estimated vs. actual time taken on different tasks, which helps optimize the workflow of the project., This article will briefly explain why time tracking is important in project management and how it can step up your game.

What Is Time Tracking?

Time tracking is the process of recording the employees’ time, i.e., how much time was spent on which project by the employees.

Any project has a start date and an end date, and it is the responsibility of the project manager to utilize this period in the best possible ways to accomplish the project before the deadline.

Time tracking streamlines the process by allowing managers to have a broad view of the project time and estimate the project’s duration. This overview enables project managers to make prudent decisions about allocating resources and distributing the tasks among the team members in the most efficient ways.

Furthermore, time tracking captures the employee’s time and respective tasks, thereby providing insight into the actual time taken to complete any task compared to the estimated time.

In addition, time tracking allows project managers to create a progress report of the project, which they can share with the stakeholders and clients to keep them acquainted with the project status.

Significance of Time Tracking in Project Management

Better Productivity and Workflow

Time tracking helps project managers enhance the productivity of the team by offering a holistic view of the project.

To put it simply, time tracking provides a big picture of the time (days/weeks/months) used by team members on different tasks of the project. With the help of this minutiae, the project manager can evaluate the productivity of the team and develop a roadmap to increase their efficiency and productivity.

For example, time tracking gives visibility into the time and bandwidth of every employee. Henceforth, a project manager can compare the time taken by two employees to complete a similar task. This data helps estimate individual productivity so that training or guidance can be provided to those who are lagging.

Moreover, time tracking enables project managers to discern tasks that are less significant and are consuming a good deal of time and resources. Thus, a project manager can vet the priorities and reorganize the more pertinent tasks.

More Achievable Deadlines and Reduced Cost Overrun

When you are unable to estimate the time required for completing the tasks, the chances are high that you will miss the deadlines more often. Even more, underestimating the time required for any project may lead to cost overruns.

Therefore, effective project management accompanied by accurate time tracking is crucial, as it provides the most probable estimated time any project may take. This estimate helps optimize the tasks to complete the project before the deadline. Further, if the deadline is missed, it’s not always due to the teams slacking off on their work; it may result from roadblocks or bottlenecks in the project. A project manager can trace the area of such impedances using time tracking and proactively take action to address them quickly.

With the help of time tracking, project managers can also ascertain which tasks are going over budget or are wasting resources. As a result, these resources can be reallocated to minimize cost overruns and budget leaks. Additionally, time-tracking software lets project managers look into the project’s return on investment (ROI), which helps them discern and focus on those projects that are more beneficial for the business.

Time Tracking Is Helpful in Resource Allocation

One of the most challenging parts of project management is allocating the resources among different tasks competently. And, as it says, you can assign the resources efficiently only when you clearly understand how much time each task will take to complete.

Here, time tracking fits the bill as it enables managers to have concise information about the distribution of time among various tasks.

For instance, if a project manager finds out that a team of six people is working on any task that barely requires two people to complete, they can reallocate other people to different productive tasks.

Identifying Employees Who Are Putting Extra Efforts

Time tracker transpires the employee’s working behavior like:

  • How much time it takes for different employees to complete a similar task?
  • Which employees take less time than others to complete any task, and who takes more time?
  • On which tasks do employees work more efficiently and quickly
  • Do some people procrastinate the work?
  • In which stage of the project employees are facing frequent bottlenecks

These stats enable project managers to identify employees who are giving extra effort, who are more efficient, who might be slacking off their work, and whose performance is not up to the mark.

To foster a productive environment in the team, project managers can motivate the team by publicly recognizing the achievements or efforts of workers who worked sincerely.

Similarly, managers can provide guidance or training to those who are not able to do any task efficiently or take more time than usual.

Better Management of Scope Creep

Changes are unpredictable in any project and can randomly pop up at any stage of the project. Furthermore, frequent changes can negatively impact the schedule, quality, and cost of the project. However, time tracking in project management nips in the bud by helping managers reassign tasks, reschedule deadlines, and optimize the workflow/ cost without any friction.

Note: It is suggested that any organization should have a change management process to better deal with such random scope creep.

Helps Team in Self-Assessment

When team members have visibility into what others are working on and how much time they take to complete those tasks, they can use this information to evaluate their efficiency and speed. This way, time tracking encourages team members to become more zero in on their work and stay on top of each other.

For instance, in an organization, if the team uses time tracking software, then each one of them can mark their completed tasks as soon as it is done so that they have clarity about how many tasks are in the pipeline and how to manage the time to cover them all within the stipulated timeframe.

Timely Reports for Stakeholders and Clients

Time tracking in project management can be used to create periodic reports illustrating the work progress and time utilized to share with the stakeholders and clients. Sharing such progress reports with clients builds transparency and trust as they can track the status of the project at this point.

In addition, such a report works as the touchstone for the stakeholders to determine if their investment is paying off or not. Especially if the work is delivered on an hourly basis to the client, then such timely reports do wonders.

How to Keep Track of Time in Project Management

Even today, many organizations still depend on spreadsheets and pen-paper methods to monitor the time used in project management; nonetheless, these outdated systems are ineffective and have several limitations. One of the most efficient ways to track the project is using time-tracking software. It captures and records the total time spent on any project and provides a comprehensive report on how this period was distributed among various project tasks.

There are both paid and free time tracking tools available in the market, but the free tools come with some limitations, while the other one is versatile and provides numerous functionalities, including payroll processing, client billing, etc.

Before opting for any time-tracking solution, one should evaluate some questions like:

  • What features of the time-tracking software does my project need?
  • Does my project need other functionalities like payroll and billing as well?
  • How complex is my project?
  • What is my budget for time-tracking software?

Once you are specific about your requirements, you can easily find the right time-tracking solution that will cater to all the needs of your project.


Time tracking ensures that the project is on track and does not run behind schedule. Leveraging time-tracking software in project management helps in allocating resources effectively, enhancing the team’s productivity, reducing cost overrun, and producing time reports to share with clients. Project managers can deploy suitable time-tracking software for their teams that aligns well with the project’s requirements and budget.

Written By

Bibhu is a tech enthusiast and has an academic background in marketing. He enjoys learning about the latest technologies that extend human potential and challenge the status quo. Besides his work life, he loves writing poetry, songs, and indulging in creative philosophies.

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