Reducing expenses and maximizing cash flow are at the heart of running any successful small business. Given the myriad of time tracking solutions available, evaluating - let alone selecting - a solution can be an incredibly daunting task. Why bother? Read on to learn the ins and outs of automated time tracking.
The APA estimates that businesses can reduce their annual payroll expense by up to 4% by implementing an automated time tracking system. If you are considering whether or not to automate, here are the most important things to consider:
What to measure
First consider what you are trying to track and why. With this information, most time tracking solutions may be placed into one-of-two buckets: general time tracking or project-based time tracking.
Are you trying to track employee time for payroll?
Do you need to track project-based time for billing or management purposes?
Project-based time tracking is a must if you are billing clients, or in the event your employees are paid different rates for different jobs. Without it you would be unable to accurately bill clients and pay employees, effectively defeating the purpose of automation in the first place. It’s this kind of tracking that also provides useful project-based information that you can use to forecast time allocation and answer client questions about the status of projects.
A general time tracking system with solid time tracking features and reporting options is perfect for moving away from a manual process and will provide many benefits to make you a better manager and more informed business owner. Tardy and punch history reports, for example, can help you identify any undesirable behavior patterns to be corrected.
How to measure
Next, consider how both you and your employees will use the system. If used in a conventional office, or “brick and mortar” type environment, an on-premise solution will work just fine. Employees may clock in at clock using just a badge or fingerprint, and the information will be sent directly to the administrator’s machine for payroll export or reporting purposes.
What if your employees work remotely? What if you work remotely or find yourself on the road frequently? In this case, you would want to consider a web-based system. A web-based system empowers your employees to clock in from any location with internet access. You can review time cards or run reports on the fly.
It’s important to note that some on-premise solutions have web components, so be sure to ask when evaluating.
Think you can’t afford it? Think again
When considering initial expense and return on investment, it’s important to consider what you are giving up in not employing an automated solution. Time theft in general is estimated to cost U.S. companies over $400 billion annually in lost production. Time theft as a result of “buddy punching” (when one employee “punches” a time card on behalf of another employee), is estimated to cost U.S. companies $98 billion. Luckily buddy punching can be almost completely eliminated through the use of biometric (commonly fingerprint) identification. Biometric readers come at a slight premium to other time clocks but their benefit is undeniable.
So now what
Now that you know what you want, you can begin to evaluate suitable products.
Systems may be offered in a “you buy it, you own it” flavor or what’s becoming more prevalent today, and more common with web-based systems, a “pay-as-you-go” model. Of course, this decision is up to you and is usually based on your available capital. A “pay-as-you-go” system could make adopting a solution easier in the short term, but be careful: the monthly fees can quickly add up.
Many manufacturers (like Wasp) offer free trials. If a trial isn’t your style, look for a manufacturer who can provide a live, online demonstration of the software and its capabilities (like Wasp). They should also be able to describe the different hardware options available to you along with implementation information, so you are fully prepared to leave your paper and pencil or manual tracking process behind once and for all.
Automation is the first step to spending your time (and money) wisely.