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By EasyHours | April 3, 2025
A guide to the benefits of digital time tracking
Tags: work time tracking, legal requirements, EU regulations, working hours, rest periods, time tracking, legislation
Small and medium-sized enterprises face a new requirement: All employees' working hours must be recorded daily from July 1, 2024. Many are therefore considering how best to comply with the legal requirement – should they use paper forms, fill out an Excel timesheet, or invest in a digital system? In this post, we take a closer look at why digital time tracking is often the best solution. We explain in a calm and clear language the advantages of digital solutions over traditional methods like Excel and paper, and provide insights into user-friendliness, error risks, compliance with legal requirements, data storage, and efficiency. As you may have read in our introductory post, time tracking has become a legal requirement, and here we guide you to the smartest way to approach it.
Many small businesses start with a simple Excel timesheet or even paper sheets to track working hours. It seems straightforward and cheap at first – everyone knows Excel, and a piece of paper costs nothing. But a number of challenges quickly arise:
Manual Entry and Errors: With paper and Excel, everything depends on human entry. It's easy to forget to include all hours, enter data incorrectly, or misunderstand scribbled handwritten notes. A single mistake can mean incorrect hours, which can create frustration for both employees and management.
Time-consuming administration: When using paper forms or Excel sheets, you have to manually collect and check the timesheets. A busy accountant or administrator may need to remind employees about missing entries and then spend time compiling the data. It's not just time-consuming – it's also tedious routine work that distracts from more important tasks.
Lack of overview and documentation: Paper stacks can get lost or damaged, and Excel files can be overwritten or forgotten in the email inbox. If you suddenly need to present documentation of employees' working hours (e.g., during an audit or a request from authorities), it can be difficult to quickly retrieve all the information. Paper and simple spreadsheets also do not provide an easy overview of work time patterns or violations of working time regulations – such calculations must be done manually.
Security and confidentiality: With paper and Excel, data is not particularly protected. Physical timesheets can disappear, and an Excel sheet shared via email can end up with the wrong recipients. Additionally, it can be difficult to control who has access to or can edit an Excel sheet, which can compromise data integrity. In short, traditional methods are vulnerable when it comes to the secure storage of your data.
Of course, paper and Excel are better than no registration at all. But these methods do not meet modern demands for efficiency and reliability. As the company grows – or simply to comply with new regulations – you will find that manual time tracking becomes a hindrance in daily operations.
A digital time tracking solution (e.g., a user-friendly time tracking app) eliminates many of the problems that paper and Excel cause. Here are some of the main benefits of going digital:
High user-friendliness: Digital systems are designed to make it as easy as possible for employees to track their time. Typically, you can log hours via an app on your mobile or a web portal – quickly and without hassle. This means that everyone can get it done on the go, whether they are in the field, at the office, or working from home. When time tracking is easy to use, it is more likely to be done correctly and daily.
Automatic logging and fewer errors: A good digital system records working hours objectively and accurately. Some solutions offer, for example, start/stop times, automation around breaks, or even geographically based clocking in and out. Because calculations are done automatically in the system, you avoid input errors and forgotten hours – the system can even send reminders if an employee has not reported their time for the day.
Effortless compliance with legal requirements: Digital solutions help you record the daily working hours for each employee, so you automatically comply with legal requirements. Data is objective and reliable, allowing you to meet the requirement for an "objective, reliable, and accessible" system. Employees can usually see their recorded hours themselves, which fulfills the requirement for accessibility and provides transparency. Should the authorities or your audit inquire about working hours, you can generate a report directly from the system with a few clicks instead of manually gathering documents.
Secure Data Storage: With a digital solution, all records are securely stored in the cloud or on a protected server. You avoid papers that can get lost and files that can become corrupted. Most professional systems continuously back up data, so nothing is lost. At the same time, access can be controlled per user, so only relevant people can view or modify time data. This gives you peace of mind that your work time data is securely stored.
Efficiency and Overview: When time tracking is digital, you save time on administration. You no longer need to enter data from paper to computer or collect timesheets – everything is gathered in one place. You automatically get an overview of employees' hours week by week and month by month. Many digital systems allow you to generate reports and statistics with a click, so you can easily see, for example, overtime, flex time, or if someone is approaching the maximum allowed working hours. This also makes it easier to handle payroll and invoicing, as the hours are accounted for correctly and on time.
In short, with a digital system you get a solution that is simple, secure, and efficient – benefiting both employees and management. You leverage technology to avoid trivial tasks and minimize the risk of errors. Once you have chosen a solution, you can also consider using modern methods for hour registration that automate the process even further. If you want to know more about how to get started, we have also created a guide with the 5 steps to implementing time tracking in your company.
Let's summarize the differences between the three methods on the key points:
User-friendliness: Paper forms require employees to remember to fill out timesheets by hand and hand them in – this is time-consuming and not very intuitive. Excel sheets are a bit better, as they can be filled out on a computer, but they still depend on opening the file and manually entering everything. A digital solution (e.g., a time tracking app), on the other hand, is the most user-friendly: employees can register time continuously via their phone or PC, often with just a few clicks and perhaps even automation, making it easy to get everyone on board.
Risk of errors: With paper and pencil, numbers can easily be misread or summed incorrectly, and in Excel, one wrong formula or a typing error can create inaccurate data. There is no built-in control, so a human error can go unnoticed. Digital systems drastically reduce errors by automating calculations and validating input (e.g., avoiding impossible timestamps). The system can alert if something is missing or looks incorrect, so errors are caught and corrected immediately.
Compliance with legal requirements: The new legal requirement demands reliable recording of working hours. Paper and Excel technically meet the requirement to record hours, but they make it harder to ensure consistent and credible recording every day. Additionally, it can be cumbersome to provide each employee with easy access to their own records using these methods. A digital system is designed to meet legal requirements: each entry is objectively timestamped, data cannot be easily altered without a trace, and employees can log in and view their own hours. You are therefore much stronger in terms of documentation and supervision.
Data storage and security: Paper must be stored physically (with the risk of fire, water damage, or clutter in the archives), and you must ensure that Excel files are stored securely (remember backups!). Neither is particularly secure in the long run. Digital solutions store everything centrally and encrypted. You always have a secure copy of the history, and you don't have to worry about a folder disappearing from the shelf or a file getting lost on the computer. Data is typically better protected against both accidents and unauthorized access in a professional system.
Efficiency in daily operations: With manual solutions, you waste time collecting, entering, and double-checking. Excel can help a bit with automatic summation of numbers, but it still requires many manual steps and coordination. A digital time tracking system saves you from all that unnecessary administration. Managers or HR can retrieve the information they need when they need it, without first having to piece things together. This frees up time that you can spend on more value-creating work in the company.
As can be seen, the digital solution wins on all fronts when it comes to time tracking. For employees, registration becomes easier and more straightforward, and for the company, data becomes more reliable and accessible.
Paper and Excel can probably solve the task in its simplest form, but they cannot compete with a digital system when accuracy, security, and efficiency are taken into account. With a digital solution, you get a future-proof way to handle work time registration, which both saves time and provides peace of mind.
Are you ready to try digital time tracking in practice? You can sign up for free at EasyHours.com.pt and see how easy it is to get started. EasyHours is a simple digital system for work time tracking, tailored for small businesses. Try EasyHours free for 30 days and experience the benefits of a modern solution – your employees (and your future self) will thank you for it.