Time tracking for SMEs
Hours are missing before the client invoice can be sent. Project management is waiting for the latest time logs, and HR needs complete working hours. We’ll use an example to show you how to consolidate this information in your day-to-day operations.
One workday, three questions
An employee works from 8:00 a.m. to 12:00 p.m. and from 1:00 p.m. to 5:00 p.m., with a one-hour lunch break in between. Her eight working hours are distributed as follows:
- Five hours for setting up new computers at the client's site
- Two hours for internal documentation
- One hour for a team meeting
HR asks: When and for how long did the employee work? Project management wants to know how much effort is attributable to the client project. Administration checks which services should be included on the invoice.
It’s the same workday, but the three departments require different information from it.
Working time, project time, and billing
The following overview shows the requirements for this example. It is not a complete list of all legally required information.
Who needs what information?
The five client hours are part of the total working time. Whether the company can bill for all of them depends on the contract. Internal documentation and the team meeting also count as working time. In our example, these are not billed to any client.
Recording only project hours does not provide a complete record of working time. Conversely, a timesheet without project allocation is not enough to prepare a client invoice.
How to manage tracking within the team
1. Clear rules for everyone
The IT service provider uses a one-page guide to define how employees should log working hours and breaks. The guide also explains how to assign time to a client project or internal task and how to correct incorrect or missing entries.
To start with, three categories are sufficient for this example: client projects, internal documentation, and meetings. An additional category is only added if the company needs it for a specific analysis.
This keeps the selection manageable for daily use. The company should also verify which information it is legally required to track.
2. Log time on the same day
After the client visit, the employee selects the correct project and logs the five hours. She adds a brief note on what she did, such as "Set up computers and tested functionality."
She uses the agreed-upon internal categories for documentation and meetings. At the end of the day, she checks that her working hours have been fully recorded.
If a question arises, it is easy to see what an entry refers to. The employee does not have to try to reconstruct what she did that day weeks later.
3. Regularly review project effort
A total of 20 hours is planned for the on-site setup at the customer's location. At the interim review, 16 hours have already been logged. The project manager checks which tasks are still outstanding.
Is the remaining budget sufficient? Did the customer have additional requests, or was there a technical problem? She clarifies this with the team. The logged hours show the effort involved, but the project manager must find out the reason for it through discussion.
This feedback helps with future planning and with subsequent quotes for similar projects.
4. Check services before invoicing
Before billing, the administration team reconciles the recorded services with the order. Are the descriptions clear? Are the hourly rates correct? Is the company authorized to charge for all recorded services as planned?
She clarifies any open questions with the project manager before the invoice is generated. A time entry alone does not automatically mean that the customer is liable for that service.
Billable customer services are prepared for invoicing. Internal hours are retained for the company's operational overview.
Excel or software?
There is no specific tool mandated for recording working hours. Excel is also an option, provided the necessary information is documented. The federal SME portal lists Excel alongside time clocks, software, and mobile applications as a possible tool.
For simple processes, a shared template may suffice. Define which file is the master version, who reviews it, and where the documents are stored.
For our IT service provider, an integrated solution is particularly worthwhile where hours have to be entered multiple times. Follow a typical workday through your own company: Who is re-entering data? Where is the project assignment missing? What questions arise before invoicing?
The answers will show you what a solution needs to do for your business.
What the law requires
For employees subject to the working and rest time provisions of the Labor Act, systematic recording it the basic rule. This includes, in particular, the start, end, and duration of daily work, weekly working hours, as well as the timing and duration of breaks of half an hour or more.
Depending on the situation, further information may be required. Once they are no longer valid, these documents must be kept for at least five years.
There are exceptions. Simplified recording or an exemption is only possible under certain conditions. Therefore, check which regulations apply to your employees.
Linking work and project hours with Exxas
With Exxas, your team records time against categories, tasks, and projects. This also includes attendance times as well as requests and approvals. Time tracking can be integrated with service recording for service orders, projects, and tasks.
In this example, the employee records her client services against the project. The project manager compares the effort against the time budget. Hourly rates and functions for project billing are available for further processing.
How you set up these functions depends on your workflows and the applicable requirements. This also continues to include the rules for recording and verifying entries.
Start with a client project and review the process from time entry to invoicing. This will show you where Exxas can simplify your current work.
Get to know time tracking with Exxas
As of: November 12, 2026. This article is for general guidance only and does not replace legal advice in individual cases. The specific time-tracking regulations that apply depend on the company and the employees involved. The applicable legal foundations are authoritative.
