This is the most common argument against automated time tracking systems—and the most misleading one. Excel really is “free”—if you don’t count the five hidden “taxes” you pay every month without even noticing.
In this article, we’ll analyze the real cost of manual time tracking and compare it with a subscription to professional software. Spoiler: the difference will surprise you.
Tax #1: Memory — you’re paying for “fiction”
Time tracking problem: post-factum data is just fantasy
How does time tracking in Excel usually work? At the end of the day (or on Friday for the whole week), an employee opens the spreadsheet and tries to remember: “What was I doing on Tuesday at 2:00 PM?”
Peter Drucker warned that people don’t have a reliable sense of time. Researcher Laura Vanderkam found that when filling in spreadsheets after the fact, people overestimate their working time by 10–50%.
| What the employee records | What actually happened |
|---|---|
| Worked on project — 6 hrs | 3.5 hrs work, 2.5 hrs interruptions |
| Meetings — 2 hrs | 3.5 hrs meetings + waiting |
| Administrative — 0 hrs | 1.5 hrs on emails and messengers |
“I have 15 remote developers. The sprint ended, tasks are not ready. Everyone says ‘worked all day.' I can’t check.”
Cost of this “tax”
Example: a client on outsourcing pays 2,150 UAH/hr. If your time tracking is overestimated by 20% due to memory errors, you either:
- Underbill the client (lose money)
- Overbill the client, they don’t believe you, and you lose trust
Solution: Automated time tracking records data in real time, without relying on memory. Not “I think I worked 6 hours,” but “the system recorded 4 hours 12 minutes in the IDE.”
→ How to get objective data instead of guesses — read the article “Time Tracker for Scaling: How to Find Bottlenecks”
Tax #2: Willpower — friction kills discipline
Problem: Excel requires effort
James Clear in “Atomic Habits” formulated a law: for a habit to stick, you need to reduce friction to zero.
Steps to track time in Excel:
- Open the file
- Find the correct sheet
- Find the right cell
- Remember what you did
- Enter data
- Save the file
Six steps. Too much for a busy person.
Peter Bregman describes a company where employees didn’t fill out timesheets not out of sabotage, but because the system required 10 extra seconds of effort. Ten seconds—and discipline collapses.
“The client wrote: ‘Prove the team worked 160 hours.' I only have manually filled timesheets. The client doesn’t believe me.”
Cost of this “tax”
If out of 20 employees, 5 “forget” to fill in the sheet — you have 25% of data missing or inaccurate. This is not statistics, this is noise.
Solution: Time tracking software works in the background. The employee doesn’t need to do anything — the system records activity automatically. Zero friction = 100% data.
→ How to choose a system with minimal “friction” — in the guide “Time Tracking: How to Choose a Time Tracker for Your Company”
Tax #3: Administrative — expensive time on cheap work
Problem: someone has to “maintain” Excel
Who in your company:
- Reminds the team to fill in the sheet?
- Compiles data from different files?
- Fixes “broken” formulas?
- Formats reports for management?
Jason Fried in Rework warns: thick processes and bureaucracy require enormous energy to maintain. This energy is stolen from real work.
Cost of this “tax”
| Activity | Time per week | Performed by | Cost |
|---|---|---|---|
| Reminder to fill | 1 hr | Manager | 1,075 UAH |
| Data compilation | 2 hrs | Manager | 2,150 UAH |
| Fixing errors | 1 hr | Manager | 1,075 UAH |
| Formatting reports | 1 hr | Assistant | 645 UAH |
| Total per week | 5 hrs | 4,945 UAH |
Per month — 19,780 UAH. Per year — 237,360 UAH.
Subscription to professional time tracking software costs 130–215 UAH per employee per month. For 20 people — 51,600–103,200 UAH per year.
Savings: 134,000–186,000 UAH per year + 240 hours of manager time.
“It turned out that two analysts were preparing identical reports for different managers. 8 hours per week — wasted.”
Solution: Automated time tracking doesn’t require “maintenance.” Reports are generated in seconds, data is collected automatically, formulas don’t break.
Tax #4: Speed — “dead data” vs live dashboard
Problem: Excel shows the past, not the present
When was the last time you opened an Excel time tracking sheet and made decisions based on it? Not just “looked at the numbers,” but actually changed something in team operations?
Drucker warned: the most important thing is not the trends themselves, but changes in trends. You need to notice them immediately.
What Excel shows:
- Static data from last week or month
- Information that is already outdated
- Numbers that are hard to compare with previous periods
What a manager needs — signals here and now:
- Testing takes 40% more time than a month ago
- An employee has been working 10+ hours daily for two weeks
- Code review time increased by 180%
Solution: Software provides instant feedback. Time tracking turns from an archive of numbers into a management tool.
Tax #5: Attention — interruptions kill productivity
Problem: Excel time tracking causes context switching
Chris Bailey in “Hyperfocus” cites research: it takes an average of 25 minutes to regain focus after an interruption.
If this happens several times a day — the team loses hundreds of hours per month.
For a team of 20 people, this means thousands of lost hours and millions of UAH per year.
Solution: Background time tracking doesn’t cause interruptions. The system works unobtrusively, and people remain in a state of focus.
Conclusions: “Free” Excel is the most expensive choice
Time tracking in Excel seems free only because its real cost is spread across memory, attention, willpower, and administrative effort.
For a team of 20 people, these hidden “taxes” cost over 5 million UAH per year.
Professional software costs tens of times less.
The question is not whether you should switch from Excel to automation. The question is whether you can afford not to.
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