I’ve found a nice article on this topic – here are the reasons from that article

1. Time Tracking is the Basis for Billing in Time and Material Projects

2. Enhance Your Ability to Accurately Estimate by Learning from the Past

3. Time Tracking Might Simply be a Legal Obligation

4. Use Time Tracking to Keep Track of Your Project’s Budget

5. Allocate Costs of Team Consultants Based on Time Tracking Data

6. Manage Cross-Team Efforts and Administrative Overhead

And here the complete article: