How to do a time audit

Everhour gives teams structured time tracking, so a time audit starts from complete hours instead of memory.

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Enter your time in and out for each day. Overtime and gross pay are calculated automatically.

Employee Time Card
DayTime InBreak Start
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Break
Time OutTotal
Total hours0:00
Regular0:00
Overtime0:00
Double OT0:00
Total hours0:00
Regular0:00
Overtime0:00
Double OT0:00
Total gross pay
Regular pay
Overtime pay
Double OT pay
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Everhour — Time Tracking
Time Entries
01:24:00
00:31:00
01:07:00

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Everhour — Budgeting
Acme Web Project
1
50% of budget used
$2,500.00of $5,000.00
$2,500.00 remaining
75%
Actual costRemaining cost

Measurement

Track your budget through time or costs

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Everhour — Reports

Your invoice is ready!

Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.

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Everhour — Invoices
Your Company LLChello@yourcompany.com
INVOICE
Invoice #1042
Group by:
DescriptionHoursRateAmount
Website Redesign14h$150/h$2,100.00
Brand Guidelines7h$150/h$1,050.00
Marketing Strategy3.5h$150/h$525.00
Total Due$3,675.00
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Building a useful time audit

Start with the audit goal

A useful time audit starts with one practical question: where did the week go? You review recorded hours by day, project, client, task, and work category, then compare those records with the work the team expected to complete. The goal is a clear view of paid work, billable work, internal work, and missing time.

For U.S. employers, a time audit also supports wage-and-hour recordkeeping. The FLSA requires covered employers to keep accurate records for non-exempt workers, including hours worked each workday and total hours worked each workweek. The federal rule does not require one specific timekeeping system, but the method must produce complete and accurate records.

Gather the right time fields

Start with dates, worker names, project or client names, task descriptions, start and stop times, daily totals, weekly totals, billable status, and pay or billing rate fields in U.S. dollars. Separate hours actually worked from paid time not worked, such as time off, because those categories answer different payroll, billing, and capacity questions.

A clean audit also keeps the workweek intact. Under the FLSA, a workweek is a fixed, regularly recurring period of seven consecutive 24-hour periods, or 168 hours. Covered nonexempt employees must receive overtime pay for hours worked over 40 in a workweek at not less than one and one-half times the regular rate of pay.

Find gaps and misclassified time

The most useful audit finding is often a pattern, not a single bad entry. Look for days with no time, unusually round totals, project work logged to the wrong client, admin time marked as billable, and late manual entries that rely on memory. Reconstructed end-of-week timesheets drift because small task switches disappear.

Weekend and holiday work need careful labeling. The FLSA does not require overtime premium pay solely for Saturday, Sunday, holiday, or regular rest-day work unless the weekly overtime rule is triggered or another law, policy, contract, or agreement applies. The audit should show those hours clearly without treating every nonweekday hour as federal overtime.

Move from audit to workflow

A one-off review works when you need to clean up a single week, prepare a client invoice, or understand why one project exceeded its expected hours. It is enough when the team is small, the work is simple, and the records already show daily and weekly totals clearly.

A managed workflow becomes necessary when audit findings repeat. Everhour Team Management supports lock rules, admin time correction, personal tracking limits, weekly capacity, approval workflow, roles, project assignments, team groups, and team-wide time policy defaults. That structure turns the next audit into a review of approved records instead of a search for missing entries.

This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.

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Frequently Asked Questions

Which records should a time audit include?

A time audit should include the worker, date, project, client, task, start and stop times, daily total, weekly total, billable status, and rate category. For employees covered by the FLSA minimum wage or overtime provisions, employer records must include hours worked each workday and total hours worked each workweek.

How far back should a business keep time audit records?

U.S. employers must preserve payroll records for at least three years and basic time and earnings records, such as daily start and stop time cards or sheets, for at least two years. A time audit should not delete source records that support payroll, billing, or wage-and-hour review.

Should billable and non-billable work be audited separately?

Yes. Billable time supports client invoices, while non-billable time explains internal work, admin load, training, meetings, and project overhead. Mixing the categories makes project profitability and staffing decisions harder to read. A useful audit shows both totals, then checks whether entries were assigned to the right project or client.

Can a time audit use manual entries?

Yes. The FLSA allows any complete and accurate timekeeping method for covered employers, so manual entries can support a time audit when they are complete. The audit should flag late entries, missing start or stop times, and repeated rounded totals because those patterns weaken confidence in the record.

Does employee privacy matter during a time audit?

Yes. U.S. privacy obligations depend on sector and state, and businesses handling personal information must avoid unfair or deceptive practices under Section 5 of the FTC Act. FTC guidance says companies keeping sensitive personal information about employees should collect only what they need, keep it safe, and dispose of it securely.

How does Everhour Team Management support a time audit?

Everhour Team Management lets admins set lock rules, correct time for team members, apply personal tracking limits, review weekly capacity, and approve timesheets before records feed payroll, billing, or reporting. Those controls reduce repeat cleanup because late changes and missing submissions become visible sooner.

How does Everhour Reporting help after a time audit?

Everhour Reporting turns logged time, budgets, costs, and project data into reports with columns, grouping, filters, date ranges, and exports in CSV, Excel/XLSX, or PDF. After an audit, teams can review billable time, labor costs, project totals, and invoice status without rebuilding the same spreadsheet.

Keep time audits under control

Track approved hours, lock reviewed periods, and correct team records before payroll or billing review. Everhour Team Management gives audits a cleaner source of truth.

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