Are hourly employees part of your workforce at your IT consulting firm?
What tools or methods do you currently use to manage timesheets and process invoices or payroll?
Have you been running into issues with getting timesheet approval from your end clients, and ensuring those approvals are preserved as images when passing through different layers like Sub Vendors or Prime Vendors?
Do you often deal with complications in tracking timesheets, calculating overtime accurately, and making sure payroll reflects only the hours approved by the client?
In this article, we'll discuss some of the most common timesheet challenges IT consulting companies face and offer insights on overcoming them, making your operations smoother, more efficient, and more accurate.
Inaccurate Billing
One of the most common problems is inaccurate billing, often caused by incomplete or incorrect timesheet entries. Billing typically occurs based on the hours each employee records for a client. However, if employees are notorious for neglecting time entry or if a timesheet is never submitted, this can lead to significant billing inaccuracies.
This impacts your cash flow and can also lead to strained client relationships. A wrong invoice could delay payments, and clients might question the legitimacy of future invoices. In fact, 61% of late invoice payments occur due to inaccuracies. By refining your timesheet procedures, you can improve your accuracy, which helps maintain a steady cash flow and builds trust with your clients.
Delayed Client Payments
Delayed payments from clients can severely impact your company’s financial health. Your employees expect to be compensated regardless of whether your client has made a paid hour billed. This creates payment discrepancies, leading to strained cash flow and potentially forcing you to pay your team out of pocket.
Imagine an employee spends half of a pay period working on a client project. The client questions the accuracy of the work reported, resulting in a delayed payment. In the meantime, your team expects to be paid on time, whether the client has paid or not.
Missed Timesheet Submissions
Missed timesheet submissions are a major pain point for IT consulting companies. Employees may forget to submit their timesheets, resulting in gaps and lost revenue. This is especially problematic for growing businesses where the accounts receivable team may not always have the bandwidth to check for completeness in billing.
Without timely timesheet submissions, you could risk underbilling clients for work already completed. If you issue a second request for the same period, clients might raise concerns, potentially questioning the legitimacy of the hours submitted. Alternatively, if you decide not to send the second request, you might miss out on revenue that your company rightfully earned.
Multiple Timesheet Submissions
Many IT consulting companies deal with contractors working across different layers, such as end clients, prime vendors, and implementation partners. This can lead to a confusing array of timesheet submissions, with each department or stakeholder having their own format and submission process.
With multiple layers of approval and varying submission requirements, errors and delays are inevitable. Discrepancies between hours recorded in different systems can cause frustration for both employees and clients.
The Hidden Costs of Poor Timesheet Management
Timesheet mismanagement isn’t just an operational hassle—it can have serious financial implications. On average, payroll staff spend up to 10 hours a month processing payroll (WagePoint, 2019), and manual time-tracking errors cost companies billions each year. In fact, errors in manual time tracking can lead to companies overpaying for hundreds of billable hours. The manual processes that worked for a smaller team may no longer be sustainable, leading to bottlenecks. Significant time and resources spent on these tasks could be allocated to more strategic activities. Additionally, 49% of American workers will leave a company after experiencing two issues with their paychecks (ASAP Payroll Service, 2021).
These hidden costs can add up quickly, affecting both your bottom line and your ability to retain top talent. Worse yet, inaccurate timesheets directly translate into cash flow problems and strained client relationships.
How Rosterly.io Solves These Issues
Revamping your timesheet processes and workflow to automate Operations management is crucial to building efficiency and accuracy into your operations. Rosterly.io offers an AI-powered solution designed to tackle these common challenges head-on.
• Inaccurate Billing: Rosterly.io’s AI-powered system parses customer-submitted timesheet images, which auto-detects billable hours, project information, leaves, approval status, etc., to ensure accurate billing by capturing the right information with precision. The timesheet data is then sent to the Smart invoice queue to validate, approve, and send invoices to customers in one click.
• Delayed Client Payments: By automating the validation and approval process of the entire workflow for different project types—Time & Materials (T&M), Corp-to-Corp (C2C), and Fixed Bid projects—ensuring the appropriate data is used for billing and speeding up client payment cycles. Additionally, Rosterly.io provides AI-enabled gentle reminders to customers, prompting timely payments and reducing delays.
• Missed Timesheet Submissions: AI enables Alerts and Notification systems to make sure employees and contractors submit their timesheets on time by sending reminders at the right time and carefully managing notifications to avoid spamming mailboxes. This ensures timely submissions, eliminating gaps in tracking and enabling consistent payroll and billing cycles.
• Multiple Timesheet Submissions: With a unified system, Rosterly.io streamlines timesheet submissions across all layers—from Sub Vendors to Prime Vendors, Implementation Partners, and End Clients—with support for Corp-to-Corp (C2C) project types. This minimizes discrepancies between systems and ensures that all recorded hours are consistent and accurate across different stakeholders.
By embedding AI to parse timesheet images, manage leave, auto-detect billable hours, and send AI-enabled gentle reminders to customers, Rosterly.io ensures that invoices are generated accurately and sent promptly to the Smart invoice queue. Supporting multiple project types, including C2C, Rosterly.io integrates data from various sources for accurate billing and validation, helping you keep cash flow steady and operations efficient.
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