Timesheet
A record of hours worked used to calculate billable time and generate invoices.
Definition
A timesheet is a document or digital record tracking hours worked on specific tasks, projects, or clients. For service businesses, timesheets are the foundation for time-based billing, converting recorded hours into invoice line items at agreed-upon rates.
Modern timesheet systems often include project codes, task descriptions, and approval workflows. They integrate with invoicing software to automatically generate billable amounts based on time entries, reducing manual calculation errors.
Why It Matters
Accurate timesheets are essential for profitable time-based billing. Underreporting hours means lost revenue; overreporting creates client disputes. Studies show professionals typically lose 15-30% of billable time due to poor time tracking habits.
Beyond billing, timesheets provide valuable data: which projects consume the most time, which clients are profitable, and where efficiency improvements are needed. This data informs pricing decisions and capacity planning.
Examples
- 1
A law firm requires attorneys to record time in 6-minute increments, with detailed descriptions of work performed for each client matter.
- 2
A creative agency uses time tracking software that employees update throughout the day, automatically syncing with project budgets.
- 3
A freelance developer submits weekly timesheets to clients showing hours worked, then generates invoices from the approved entries.
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