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Tracking Employee Time Can Save Time and Money


Most business owners know that paying employees is usually one of their largest operating expenses, but they may not be aware that tracking employee time with a time and attendance system can save their business a substantial amount of money.

Who Benefits from a Time and Attendance System?

Here’s how a time and attendance solution could benefit different roles in your organization:

Employees — How much time out of the workday/week do employees spend on their time entry? Employee productivity may increase as the energy spent entering time is focused on business-related activities instead. The right system can also serve to increase employee confidence that their pay is accurate.

Payroll/HR administrator — Saving time by eliminating manual paperwork and the potential for error is a huge win for payroll/HR administrators. The right time and attendance system can lessen the workload on staff while minimizing payroll errors. Plus, this data can be a lifesaver if your business is audited.

Business owner — By showing where money is going and how time is spent, time and attendance reporting can yield quantifiable metrics that can be used to improve the way you do business. These metrics can also help management track and assess the performance of individual employees. A time and attendance system can also help business owners comply with Fair Labor Standards Act regulations since they may be more aware of when employees are approaching overtime and when they will need to be compensated for this time.

Four Benefits of a Time and Attendance System

  1. Time Savings – Time not spent on navigating a complex time and attendance process is time that can be spent on business. According to industry estimates, seven minutes is the average amount of time it takes a supervisor to manually calculate time card data for each employee per pay period. Multiply that by the number of employees (or time cards) that need to be calculated two to four times a month, and it can add up.
  2. Reduce Inefficiencies – Another benefit of automated systems is the elimination of inefficiencies associated with paper time card systems. No more printing out paper time sheets, transferring time sheets to employees, approving individual time sheets, and entering data into the payroll system. An integrated time and attendance solution automates the process of tracking employees as they check in and out for work, resulting in more accurate time data collection and fewer payroll processing errors.
  3. Compliance – Complying with employment laws and time-keeping requirements is required for both large and small companies. The use of an automated time and attendance system may assist employers in doing so since it can provide consistency in time and attendance data collection.
  4. Recordkeeping – Archived time records can help a company defend itself against allegations of wage and hour violations. In addition, audit trails are accessible so managers can see when changes are made and who made them.

The Small Business Case for Accurate and Affordable Time Tracking

To drive home the case for adopting a time and attendance solution, just look at the numbers. Here's an example:

Diane runs a small custom furniture business, where she employs 15 craftspeople at an average hourly wage of $30. The average work week is 50 hours due to strong demand for her furniture. Diane runs payroll on a weekly basis. It takes her seven minutes to calculate each time card, and she estimates that employees spend about six minutes each day filling out time cards when they otherwise could be working. She also accounts for payroll errors (3 percent is a conservative estimate).

Using these numbers, Diane is spending $35,100 a year on payroll errors, $11,700 a year in lost employee time, and $2,730 a year on calculating payroll. Add up those numbers, and Diane could be saving $49,530 each year by adopting a time and attendance system.

Calculate your own cost savings with our Time Clock Calculator.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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