Here’s what it’s all about:
- Time Tracking for Small Businesses
- How small businesses can digitally track their work hours using a cloud-based solution without their own server
- What selection criteria matter
- When a terminal, browser, or a combination of both is best suited for day-to-day work
- What’s important during implementation
- How integrations with payroll systems can reduce administrative overhead
Cloud-based time tracking is often a good fit for small businesses without their own IT department. It doesn’t require a dedicated server, can be used without extensive training, and allows employees to track their work hours via a web-based solution or a time clock, for example. Key selection criteria include data storage in Germany or the EU, transparent costs per employee, and straightforward setup. This allows small teams to digitally track their work hours without having to set up a complex IT infrastructure.
🔍 Why Small Businesses Have Different Time Tracking Needs
In small businesses, management often handles multiple tasks at once. In addition to day-to-day operations, they are responsible for personnel management, vacation scheduling, and preparing payroll. These companies often lack a dedicated HR department or in-house IT support.
A suitable time tracking solution must therefore meet three key requirements: It should be quick to set up, function smoothly in day-to-day operations, and require minimal administrative effort. Complex software implementations involving additional servers or extensive training often do not fit within these constraints.
In addition, there is a legal obligation to track working hours, which generally applies regardless of the size of the company. In its ruling of September 13, 2022 (Case No. 1 ABR 22/21), the Federal Labor Court clarified that, pursuant to Section 3(2)(1) of the Working Hours Act (ArbSchG), employers must implement a system for recording all working hours. There is currently no general requirement for electronic time tracking. Companies may therefore still document working hours on paper for the time being.
🤔 When does time tracking become mandatory?
The following article explains exactly what requirements companies must meet: “When Will Work Time Tracking Become Mandatory Under the ECJ Ruling?”
⚠️ Time Tracking for Small Businesses: What Are the Key Selection Criteria?
Not all time-tracking software is equally suitable for small businesses. While larger organizations often require extensive integrations and complex time management, smaller teams prioritize ease of use, implementation effort, and cost.
The following tab outlines the most important criteria for selecting a simple time tracking solution:
Why it’s important for small businesses:
No need for your own server. The provider handles the operation and technical maintenance of the central infrastructure.
Why it’s important for small businesses:
Employees can track their work hours without extensive training.
Why it’s important for small businesses:
Terminals and browsers allow data entry from various work locations.
Why it’s important for small businesses:
Costs per employee and potential additional fees make budget planning easier.
Why it’s important for small businesses:
New employees can be added as the company grows, without replacing the entire solution.
Why this is important for small businesses:
The provider must be able to demonstrate that it has appropriate data protection and security measures in place.
Why it’s important for small businesses:
Implementation should be possible without a lengthy IT project.
Why it’s important for small businesses:
Even without an in-house IT contact person, it must be possible to resolve technical issues.
Why it’s important for small businesses:
Work time data can be made available for payroll processing, reducing the need for manual data entry.
For small businesses, a transparent and predictable cost structure plays an important role. Cloud-based time tracking solutions often offer a cost-effective way to get started, with low monthly fees per employee. Since there’s no need to purchase and operate your own server, the associated investment and maintenance costs are eliminated.
If you’d like to compare the two operating models in more detail, you can find additional information in the article “Cloud vs. On-Premises Time Tracking.”
👉 When making a selection, companies should also pay attention to which features are already included in the monthly price and whether there are additional costs for hardware, setup, or integrations. A scalable pricing model also makes it possible to adjust costs based on the current number of employees.
⏰ Time clock or web-based solution: How should employees track their work hours?
The appropriate method of time tracking depends on where employees work and what technical devices are available to them. For small businesses, time clock terminals and browser-based solutions are particularly suitable options.
Time Tracking via a Time Tracking Terminal
A PZE terminal is particularly well-suited for businesses with a fixed location. Employees record their start and end times directly when entering or leaving the premises, for example, using an identification device.
This is particularly convenient when not all employees have their own computer workstation. Time recording takes place at a central location and can be integrated into the daily workflow.
👉 When making a selection, companies should keep in mind that a terminal involves additional upfront costs and, in some cases, installation expenses. Additionally, the hardware must be compatible with the chosen time-tracking software.
Time Tracking via the Browser
A web-based solution enables time tracking via a web browser. It is suitable for office workstations, remote work, and jobs involving varying work locations, provided that a compatible device and an internet connection are available.
Employees can track their own hours without having to install separate time-tracking software on every computer. Depending on the feature set, they can also view their personal time records and correct entries.
👉 For small businesses, browser-based time tracking can therefore offer a particularly easy way to get started. Existing computers are often sufficient, so no additional hardware is required.
Combining Terminal and Web Solutions
Many small businesses need more than one way to track time. For example, some employees work in the workshop, while others work in the office or occasionally from home.
A suitable time-tracking solution can combine different tracking methods into a single system. This eliminates the need for HR to analyze multiple separate time sheets.
🚨 However, it’s important to check before making a selection whether the desired cloud solution actually supports both hardware terminals and browser-based tracking. Not every cloud-based software offers both tracking methods in the same plan—or at all.
👨🔧 Implement cloud-based time tracking without an in-house IT department
With cloud-based time tracking, the provider operates the central technical infrastructure. As a result, the company does not need its own application server and does not have to install the software itself on a local server.
However, this does not mean that implementation can take place entirely without preparation. Even a simple solution requires some basic configuration, such as settings for employees, permissions, and the intended work time rules.
How to Get Started in Four Steps
1️⃣ Define requirements: Determine how many employees will use the software and where they work. Decide whether browser-based, terminal-based, or mobile data entry is required.
2️⃣ Configure basic settings: Set up employees, access rights, and necessary work time rules. Determine who is authorized to review and, if necessary, correct time entries.
3️⃣ Test data entry in a real-world work environment: Test typical workflows with a small group. Verify that start times, end times, breaks, and corrections are documented correctly.
4️⃣ Involve all employees: Provide training on how to use the system and define internal responsibilities. Also, verify that the necessary data can be exported for payroll accounting.
When making your selection, you should also check whether support is available and which services are already included in the monthly price. Especially if you don’t have an in-house IT department, having a clear point of contact for technical questions is helpful.
✅ Checklist: 10 Steps to Finding the Right Time Tracking Solution for Small Businesses
Small businesses can use this checklist to systematically assess their needs before making a software decision:
Estimate the current number of employees and expected growth
🔵 Determine appropriate data collection methods for the office, the workplace, and remote work
🔵 Check whether the cloud solution works without your own server
🔵 Compare monthly fees and potential additional costs
🔵 Check the provider’s server location and privacy policy
🔵 Inquire about the setup time and the necessary internal effort
🔵 Clarify support services and availability
🔵 Check interfaces and data export for payroll accounting
🔵 Plan a trial period that includes typical workflows
🔵 Appoint an internal person to be responsible for time tracking
🤓 Bottom line: Simple time tracking must fit into your daily work routine
For small businesses, time tracking makes sense when it simplifies daily work and doesn’t create additional technical complexity. Cloud-based solutions offer good conditions for this because they don’t require a dedicated server and can be implemented with manageable effort.
Whether a time clock, a web browser, or a combination of both is the right choice depends on the company’s work locations and processes. Equally important are transparent costs, reliable support, and a suitable integration with payroll accounting.
With ZMI – People , ZMI offers a cloud-based time tracking solution for small and medium-sized businesses. This solution makes it easy to get started with digital time tracking without needing your own server infrastructure. Schedule a consultation now!
💡 FAQ: Simple Time Tracking for Small Businesses
Do I need my own server for time tracking in a small business?
No, with cloud-based time tracking, the provider operates the central server infrastructure. Your company simply needs suitable devices and Internet access. Therefore, you do not need your own server.
At what number of employees does digital time tracking become worthwhile?
Digital time tracking can be beneficial even with just one employee. The deciding factor isn’t just the size of the business, but the effort required for documentation and follow-up processing to date (learn more about the investment calculator). A digital solution can simplify administration, especially when there are multiple work schedules or a regular need for reconciliation.
How much does a basic time tracking system for small businesses cost?
The costs depend on the provider, the number of employees, the range of features, and the billing model selected. Monthly or annual fees per employee are often charged. Additional costs may arise for a time tracking terminal, identification media, or setup.
Is a cloud-based time tracking solution GDPR-compliant?
A cloud-based time tracking system can be operated in compliance with the GDPR if the necessary technical and organizational measures are implemented. Of particular importance are a data processing agreement pursuant to Article 28 of the GDPR, appropriate access restrictions, and security measures pursuant to Article 32 of the GDPR. Storing data in Germany or the EU simplifies certain data protection issues.
How long does the setup take without an in-house IT department?
Simple cloud solutions can often be set up within a few days. The actual effort involved depends on the number of employees, working time policies, data migration, and the desired data entry methods.
Jonathan Martin is a managing partner at ZMI GmbH. For many years, he has been working in the fields of time tracking, HR software, access control, and the digitization of HR processes. In his articles, he provides practical insights into current developments, legal requirements, and digital solutions for businesses.
