The short answer: employees should record their own time every day
DCAA's contractor guidance describes daily employee time entry as a core internal control. The employee records the hours worked against the cost objective that reflects the work actually performed. A manager, administrator, or payroll clerk should not reconstruct the week from memory at period end.
Daily timekeeping is one part of a larger labor-charging system. Written procedures, authorized charge codes, complete-time recording, corrections, certification, supervisor approval, labor distribution, and reconciliation still matter. No timesheet product is DCAA approved, and software alone cannot make the complete accounting system adequate.
What ‘daily’ should mean in the written procedure
A useful policy states when a workday becomes due, which time zone controls the deadline, how employees record split assignments, and what happens when the system or work location is unavailable. ‘Enter time promptly’ is too vague to train, test, or enforce.
Daily does not automatically mean a punch clock or minute-by-minute recording. For many professional-services contractors, employees can enter a reasonable number of hours against the correct direct or indirect codes before the daily cutoff. The process should match the work while preserving a current record created by the employee.
- Define a daily cutoff and the time zone used for remote employees.
- Explain whether employees enter time as work occurs or once at the end of the day.
- Require every worked hour to land on an authorized direct or indirect code.
- Describe the exception process for travel, secure sites, outages, leave, and prolonged absence.
- State who reviews incomplete days and when an exception is escalated.
Record all hours worked, not only billable hours
DCAA Manual 7641.90 states that all hours worked should be recorded whether paid or unpaid because total hours affect labor-rate computations and related overhead. A system that captures only customer-billable hours leaves the labor record incomplete.
Provide indirect codes for activities such as administration, business development, training, bid and proposal work, and other approved non-contract activity. The code structure must follow the contractor's accounting policy; employees should not invent a convenient code when the correct one is missing.
For exempt employees working uncompensated overtime, review FAR 52.237-10 when it applies. That provision defines uncompensated overtime for proposal purposes and requires consistency between estimating and cost-accounting practices. Do not solve an uncompensated-overtime question with an arbitrary timesheet rule.
Keep the employee responsible for the record
The normal workflow is employee entry, employee certification, then supervisor approval. DCAA guidance says a supervisor should be prohibited from completing an employee's timesheet except for a documented prolonged-absence situation, followed by replacement of that record when the employee returns.
Managers can remind employees, reject an inaccurate submission, and approve or reject corrections. They should not quietly change the employee's hours or cost objective. If an authorized person must enter an emergency record, preserve who entered it, why the exception existed, and how the employee later concurred.
Design an explicit process for secure sites and offsite work
DCAA recognizes that employees in secure facilities, war zones, or other offsite locations may lack daily access to the electronic timekeeping system. The contractor should define an alternate procedure that mitigates mischarging risk instead of pretending the exception will never occur.
The alternate record should be contemporaneous, attributable to the employee, protected from silent change, and transferred to the official system as soon as permitted. A weekly reconstruction based only on memory is weak evidence. Document the approved method, responsible roles, transfer deadline, review, and retention location.
- Identify which locations or assignments qualify for the alternate process.
- Specify the temporary record employees must keep each day.
- Prohibit unapproved personal notes when security rules restrict them.
- Set the deadline and responsible person for entry into the official system.
- Require employee review and certification after transfer.
Use expected-versus-recorded hours as an exception report
A daily completeness report compares each employee's expected working pattern with recorded time after considering approved leave and nonstandard schedules. The report does not decide whether the charge is correct; it identifies a day that needs human review.
Target reminders to the employee with an incomplete day. Escalate repeated or unresolved exceptions to the appropriate manager. Avoid sending a generic reminder to the whole company, because people quickly learn to ignore a message that usually does not apply to them.
Separate a late entry from a correction
A late entry fills a record that was missing. A correction changes an existing record. Both need visibility, but the evidence differs. For a late entry, retain the actual entry time and any explanation required by policy. For a correction, retain the original value, corrected value, reason, actor, timestamp, and employee concurrence.
Do not backdate the system event to make the record appear timely. A transparent late entry plus corrective action is more defensible than an audit trail that contradicts the displayed date.
A 30-day implementation plan
Start with the policy and charge-code structure, then test the process through a complete period. Do not wait for a contract invoice or floor check to discover that employees cannot find the right code or managers do not know what approval means.
- Week 1: approve the daily-entry rule, exception paths, direct and indirect codes, and responsible owners.
- Week 2: configure the system, train employees and managers, and run realistic correction and absence scenarios.
- Week 3: operate a live period, review daily completeness, and document every exception instead of hiding it.
- Week 4: certify, approve, reconcile labor to payroll and accounting, then record corrective actions for the next period.