A Compelling Case for Integrating Time and Attendance with Payroll
How can an integrated payroll system benefit your small business? For many entrepreneurs, managing employees' time and attendance is one of the biggest and most time-consuming headaches related to owning a small business. When this process relies on manual entry and functions separately from payroll, the potential for errors and inaccuracies is clear.
Employees who use manual and paper-based time and attendance systems sometimes forget to complete their timesheets by the deadline, and then make errors trying to catch up later on. They can't recall precisely what time they came to work, the length of their lunch breaks and the exact time they departed in the evening. This opens the way to businesses either not paying employees enough for time they've worked—a frequent complaint among workers—or overpaying them. Issues revolving around payroll (such as not being properly paid) can negatively impact employee morale, which in turn affects productivity in the workplace.
The use of paper time-sheets or a mechanical time-clock is also excessively time-intensive and often fails to accurately monitor vacation days, sick time, and holidays.
Inefficiencies, unnecessary expenditures, and rising levels of employee discontent are all compelling reasons to pursue an integrated payroll approach to time and attendance. Here's a look at how an automated time and labor management system works:
Electronic time-clocks and sophisticated software assume the tasks of collecting, tracking, and managing employee work hours and pay. Data is analyzed on a real-time basis, enabling managers to review and approve employee time for payroll processing with greater efficiency and accuracy. Automated systems can track employee time in several ways, including:
- Reading a magnetic stripe or bar code on an employee's company card
- Reading an employee's fingerprints through the use of biometric terminals (eliminating the problem of lost badges or one employee clocking in and out for another)
- Reading times logged in at the employee's personal computer
Key Benefits to an Integrated System
A significant reduction in paperwork is one immediate benefit to employers. With an integrated payroll system, there's no more printing of paper time sheets; no data entry into the payroll system; and no need for a supervisor to individually approve each employee's paper time sheet.
Relieving supervisors and HR staff of time-consuming administrative tasks is another big plus for employers. (Industry estimates indicate an average of seven minutes needed to manually calculate time-card information for each employee per pay period.) Information from tax forms, benefits data, and employee reviews needs to be entered only one time, into a single interface. In this way, your HR staff can turn their attention to broader and more strategic activities, including new and more efficient ways to recruit and retain valued employees.
Finally, an automated time and attendance system can help your company defend itself against claims of noncompliance with wage and hour laws. Archived time records and policies (and more consistent data collection overall) can make complying with various employment laws and wage and hour requirements much less onerous for employers. In the unlikely event your small business is audited for allegations of wage and hour violations, the data accuracy generated through an integrated payroll system can help facilitate the auditing process.