5 Ways a Time and Attendance System will Save You Money

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For small businesses, investment in time and attendance software often takes a backseat to improving customer retention or finding new customer acquisition methods. The time and attendance systems already in place at small businesses can lead to inertia — an unwillingness to switch to a more efficient and cost-effective system despite obvious financial advantages.

The switching costs that come with a new system pale in comparison to the money lost using outdated and inefficient time tracking methods. According to a recent article in the Harvard Business Review, a study by AffinityLive concluded that the U.S. economy loses $7.4 billion a day in productivity due to inefficiencies.

Moving to an automated time tracking system can improve your bottom-line.  Here are five areas your company will see reductions:

iStock_000000147584Small1.    Recording hours.  As highlighted by the AffinityLive report, while the way individuals work has been revolutionized, the way those work hours are recorded has lagged behind. Paper-based time cards and even outdated swipe card systems leave too much room for mistakes – like system errors (when swipe cards are forgotten or paper time sheets are illegible) or even dishonesty. Between “buddy punching,” salary over-payments, and human error, there are too many ways employees and companies can lose track of recorded time.  And only those who fill out their time sheets multiple times a day can say with confidence that their time sheet is somewhat or very accurate.

Companies can save up to 4% of annual payroll expenses with an automated time and attendance system, according to the American Payroll Association. For example, Wasp Barcode’s RFID Time Clock allows workers with a unique ID badge to simply pass near an RF reader to clock in or out. Similarly, the Biometric Time & Attendance system can track arrivals, departures, breaks, and meals with just the press of a finger. At the Pocahontas Aluminum Company, what used to be a 15-minute wait to clock in (and out) has been cut by 80% due to the implementation of an RFID system. Other benefits include less time spent inputting vacation hours and increased time card accuracy.

2.    Calculating hours.  The only task that takes more time than recording hours worked is calculating everyone’s payroll each week or month. An estimated 40% of U.S. businesses calculate payroll by hand, which can take hours each week.

Select Labs in the Carolinas used paper-based time cards and a punch clock to track the hours of over 150 employees. Now that they’ve switched to a Biometric Time & Attendance system, the company finishes payroll about 70 percent faster than before, from four days a month to less than one.

3.    Wasted resources.  Not only are paper time cards a strain on the environment, but they’re a limited resource that often needs reordering and restocking, particularly when human errors are made and corrections are needed.

Beyond wasted environmental resources, the most important resource of all — your employees’ time and energy — is wasted performing manual tasks that can be better handled by using an automated process. Rather than bogging employees down with the time restraints of paper handling (including printing the time sheets, distributing them, filling them out, collecting them, calculating the information recorded, and then filing them), allow them to focus on the tasks they are employed to do.

4. Legal issues. In 2013, the IRS issued $4.5 billion in penalties related to errors in employment taxes. According to the Department of Labor, an estimated 7 out of 10 companies fail to comply with wage-and-hour regulations, mainly due to inaccurate timekeeping, misclassification, and a lack of historical, well-organized payroll data.Workers have either taken notice of this fact, or the DoL’s increased wage and hour investigations and enforcement actions in recent years are turning up more infractions than before. From 2001 to 2011, Fair Labor Standards Act (FLSA) collective actions filed in federal court increased by almost 500%. By switching to an automated timekeeping system, small businesses decrease the risk of crossing Uncle Sam or getting into disputes with workers — which can lead to FLSA lawsuits.

Moving to an automated time tracking system can improve your bottom-line.


 

5.    Stress and health-related costs.  An outdated attendance systems places unnecessary stress on payroll workers. The American Psychological Association estimates that stress costs U.S. businesses $300 billion a year between absenteeism, reduced productivity, and turnover. Job stress, which can lead to longer periods of employee disability than any other illnesses or injuries, also affects medical and insurance fees.

Select Labs’ Toni Seawell was sometimes brought to tears at the end of each month as she battled to complete her payroll duties on time, occasionally working weekends and losing out on the flexibility needed for emergency family situations. Since Select Labs moved to a Biometric system, the company’s HR department can complete their jobs on time, without worrying about one mistake costing employees an on-time paycheck. “Now the door’s open and people can actually speak to me at the end of each month,” said Seawell of the new system. That’s a win for employee morale, company efficiency, and the bottom line.

In many ways, we’ve allowed the convenience and efficiency of technology to change the way we communicate and conduct business in the work place. Time and attendance tracking systems are one of the last bastions of the old guard, and for a small business, the financial ramifications


Success Story – Select Diagnostics Laboratory
 
of staying with what is comfortable — but time-consuming, expensive, wasteful and stressful — versus an automated system could be the difference between success and failure. Put your money back towards client retention and acquisition and away from maintaining an outdated process.

 

What type of attendance and tracking process does your business use?  Visit the Select Labs’ Case Study to see if you’re facing the same roadblocks they faced, and then let us know what’s worked (or hasn’t worked) for you and your business – we’d love to hear from you!

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Brian Sutter

Brian Sutter

Director of Marketing at Wasp Barcode
Brian Sutter is the Director of Marketing at Wasp, responsible for the development and execution of the company’s marketing strategy. His role encompasses brand management, direct and channel marketing, public relations, advertising, and social media. He also writes and speaks on topics related to helping small business owners grow their business and improve operational efficiency.
Brian Sutter
Brian Sutter