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3 Benefits of Tracking Your Time Accurately

  Whether you’re a small business owner or employee, accurate time tracking can be crucial to understanding how you spend your working hours. That knowledge can be the difference between staying in business and looking for a new job. For small businesses, the line between success and failure is often very thin: According to the SBA Office of Advocacy, a mere 51% of small businesses survive past their first five years, and that number shrinks to just 25% over 15 years. Considering there are roughly 28 million small businesses in the United States, that’s a significant number of jobs hanging in the balance, and many are lost when employers take the wrong track to improve the company, or employees mismanage their timesheets and get overcompensated for work not done. [Tweet "51% of small businesses survive past their first five years."] Of course, there is no right or wrong path to success for every business, as every company’s needs are different. It is worth noting, however, that many small business owners choose to focus on outward-facing strategies like improving customer experience and finding new acquisition methods, rather than looking within. Investing in tools to increase employee productivity is a sorely underutilized avenue for boosting the bottom line. Perhaps the most overlooked internal tool is an automated time and attendance system: Over 40% of organizations don’t have automated timekeeping. The benefits of moving beyond timesheets and pencils to software that is more precise and descriptive isn’t always obvious, especially when faced with an upfront cost. The benefits of tracking your time accurately, however, far outweigh the cost of investment, for all parties involved. RFID time clocks allow workers to simply pass near a reader to clock in or out; biometric systems can track arrivals and departures with the press of a finger.  Both systems can radically improve wait times.

Financial gains

For employees, using an automated time and attendance system pays massive financial dividends: A study by AffinityLive showed that the U.S. economy loses $7.4 billion every day due to workers who fail to accurately track their time on the clock. Many employees keep tabs of their hours only in retrospect, and they often fail to take things like answering emails into account when calculating their hours. Quality systems also allow employees to check to see how many vacation days they have left, exactly how much time they’ve spent working this week, and other questions that often bog down HR departments during work hours. [Tweet "Our economy loses $7.4 billion every day from workers who inaccurately track time."] Of course, this doesn’t mean that employers will have to start doling out larger paychecks if the company invests in an automated system. Errors in payroll calculation are rampant, as high as 8%, when the timesheets are done manually, whether by the employees themselves or by those in charge of payroll (who often operate under a substantial time crunch each month). Furthermore, time theft such as buddy punching is common and costly: According to the American Payroll Association, the average employee steals four hours and five minutes every week. Companies can experience losses of over 2% of gross payroll related to buddy punching alone. Overall, tracking time accurately means correct paychecks for employees, peace of mind for employers and fairness for everybody.

Improved insight into time spent at work

Time is a resource, and if it isn’t spent wisely, that’s money down the drain for your business. As Curt Finch writes for Small Business Trends:  Is a problematic client tying up a significant portion of your employees’ time? Does that problematic client represent the bulk of your company’s income, so that it would be beneficial to dedicate more resources to them? Or is that customer a small drop in the bucket? Are your employees working as efficiently as possible or are they bogged down by antiquated equipment, policies or other hindrances? For employees, an automated time and attendance system drastically reduces the amount of time spent on menial tasks like timesheets and allows more time to do the job they were hired to do. Companies that integrate automated systems often see time spent clocking in and filling out timesheets, not to mention the time needed to calculate those hours at the end of the month, reduced drastically. For owners, who normally work 2,500 hours per year, an automated system can highlight time spent on non-critical tasks, and can help them redirect their focus to more substantial and important matters each day.

Keeping the whole company on the same page

Small business owners would do well to practice what they preach and track their time the same way employees track theirs. Occasionally there is still a negative stigma attached to time tracking, but by setting an example, employers can influence managers and lower-level employees to buy in to the process. This keeps the whole company on the same page, and can have a positive effect on morale. Furthermore, by putting every worker into an automated system that tracks breaks, overtime, vacation days and more, companies will be able to avoid costly legal problems that are becoming more common in the United States. According to the Department of Labor, 70% of employers are not in compliance with the Fair Labor Standards Act, leading to a 77% rise in lawsuits in regards to wage-and-hour disputes and hundreds of millions levied in overtime violations. The IRS also issues billions in tax payroll penalties each year due to ever-changing tax rules and subsequent mistakes made in-house. Businesses add a layer of protection from litigation by integrating a comprehensive time tracking system that eliminates discrepancies altogether. Finally, as companies grow and their employees begin to work in separate buildings, or out in the field, or remotely altogether, it’s important to have a system that can be accessed from anywhere and can scale to meet your needs, especially if you have your eyes set on going national or even global. So much of how we do business has been altered by revolutions in technology. Yet time tracking seems to lag behind other aspects of business in this regard, not only do an estimated 40% of U.S. companies still calculate payroll by hand, but 46% don’t have an accountant at all. Tracking your time accurately means reducing errors in payroll, gaining valuable insight into time spent at the office and keeping the company out of legal trouble and in good spirits. At this point, companies that don’t track time automatically are behind the curve, and are closer to the brink than they might realize. Upgrade today if you haven’t already, and embrace the benefits that new technology brings. How would tracking employees time with dedicated software help your company save time and money each week?