How does your company track time and attendance? We ask because there are still far too many small businesses doing things the old-fashioned way. That is to say, they use paper timecards or sheets that employees fill out manually. Some are using old-fashioned punch clocks that cannot necessarily be trusted for accuracy.
Here's the deal: all the old-fashioned methods were cutting edge in their day. But we are now in the 21st century. Paper cards and sheets were outdated back in the 1970s yet company's continued using them. Now punch clocks are equally outdated. It is time to graduate to the world of automation. New, automated time and attendance solutions are better all the way around.
Not convinced that upgrading is worth it? Then check out these two big ways manual time and attendance could be costing your company money:
1. Inaccurate Time Records
Cards or sheets filled out by hand are an open invitation for inaccurate records. Whether on purpose or out of ignorance, employees who write in their times manually are liable to be inaccurate by a minute or two. One or two minutes individually doesn't mean much. But add all those individual minutes up and you have something big. Let's do some math to see just how big this can be.
Let's say that of your 50 employees, 5 of them are misreporting their time by 5 minutes per day. Let us assume each of them is 5 minutes over and they each get one week of paid vacation every year. The total number of misreported minutes for each employee is 25 per week. That adds up to 125 minutes for all five.
If each of those employees is earning $10 per hour, you are losing $20.83 per week. Multiplied by 51 weeks, that comes out to $1,062.50. Now imagine if the discrepancies involve overtime pay rather than standard pay. Now you are up to $1,500 per year.
Manual time cards and sheets are ripe for inaccuracies. As for legacy punch clocks, they are rather easy to manipulate. They are more accurate than manually completed sheets, but they can still be worked in favor of employees with no compunction about misreporting their time.
2. Manual Time Card Processing
The second way manual time and attendance tracking could be costing your company money is related to time card processing. You may have payroll software that runs all the numbers after your HR team enters the data, but someone still has to take the time to process time cards and input the numbers. That time could be better spent doing other things.
As long as time and attendance have to be tracked and verified manually, you're spending precious labor on something that could be completely automated. Every hour of that labor represents time and money spent. Is manual time and attendance tracking worth it? Probably not.
Automated Time and Attendance Is Better
A better way to handle time and attendance tracking is with an automated system. An automated time clock scans employee badges or RFID chips to automatically track when employees punch in and out. Data is automatically sent to payroll software where it is calculated and verified. The final data is then used by the software to make payroll calculations.
An automated system reduces the likelihood of errors – both willful and ignorant. It increases payroll efficiency, ensures employees are paid every penny due, and frees up time in the HR department. And by the way, BenefitMall offers automated time and attendance tracking alongside our industry-leading online payroll solutions.