5 Time Tracking Mistakes That Cost Your Business Money

Time tracking seems straightforward, but small mistakes compound into significant financial losses over time. Whether you are billing clients, claiming R&D tax credits, or simply trying to understand where your team's hours go, inaccurate time data leads to missed revenue, failed audits, and poor decision-making. Here are five of the most common mistakes -- and how to avoid them.

1. Not Tracking Consistently

The most damaging mistake is inconsistency. Some team members track every day, others do it weekly, and a few only fill in their timesheets at the end of the month. When entries are reconstructed from memory days or weeks after the work was done, accuracy drops dramatically. Studies show that time entries made more than 24 hours after the work was performed can be off by 30% or more.

The fix is simple but requires discipline: track time daily, ideally as you work. Tools like Logged make this easier by providing a clean calendar interface where logging an entry takes seconds. Building a daily habit eliminates the guesswork and ensures your records reflect reality.

2. Writing Vague Descriptions

Entries like "worked on project" or "development" are nearly useless for reporting, billing, and compliance. When auditors or clients ask what was done during those hours, vague descriptions provide no answers. This is especially costly for R&D tax credit claims, where documentation quality directly affects how much you can claim.

Every time entry should answer two questions: what did you do, and why did it matter? A good description reads like "Implemented caching layer to reduce API response times by 40%" rather than "backend work." Logged helps enforce this by requiring meaningful descriptions and using AI to flag entries that lack sufficient detail.

3. Skipping the Approval Process

Without a formal approval workflow, time entries go unreviewed. Managers never catch errors, inflated hours slip through, and there is no accountability trail for auditors. For companies claiming R&D tax credits, unapproved time entries are a red flag that can trigger deeper scrutiny during an audit.

An approval workflow does not need to be bureaucratic. A simple weekly review where team leads approve their team's entries adds a quality checkpoint without creating overhead. The key is that someone other than the person who logged the time reviews and confirms it. This dual-control principle is a cornerstone of financial compliance.

4. Ignoring Billable Time Leakage

Billable time leakage occurs when work is performed but never recorded. Quick meetings, email responses, code reviews, and troubleshooting sessions all consume time that should be tracked but often is not. For service businesses, even a 10% leakage rate can mean tens of thousands of euros in lost revenue annually.

The solution is to broaden your team's understanding of what counts as billable work. Create clear categories that include meetings, communication, and support alongside core project work. When your tracking system makes it easy to log these smaller activities, teams are more likely to capture them. Logged's quick-entry interface and project-based categories are designed specifically to minimize leakage.

5. Not Using Reports to Drive Decisions

Many teams track time but never analyze the data. The reports sit unused, and the same inefficiencies repeat month after month. Time data is one of the richest sources of operational insight available -- it reveals which projects are over budget, which team members are overloaded, and where processes break down.

Make report reviews a regular part of your management cadence. Weekly summaries help you catch problems early, while monthly project reports provide the strategic view needed for planning. Logged's AI-generated reports transform raw time data into structured narratives that highlight trends and anomalies, making it easy to act on what the data is telling you.