The Hidden Costs of Paper Timesheets: Why Touching Data Too Often Leads to Errors and Overpayments
When it comes to managing employee time and attendance, many businesses still rely on paper timesheets to record hours worked. While this method may seem simple and inexpensive, it comes with hidden risks that can cost your business more than you realize. One of the biggest issues with paper timesheets is how often the data is "touched"—that is, handled, recorded, or transferred—throughout the payroll process. The more times data is touched, the greater the risk of errors and overpayments.
Let’s break this down and explore why paper timesheets might be costing your business more than you think.
How Often Is Time Data Touched?
Consider a typical employee who works five days a week and records only their clock-in and clock-out times each day. At first glance, this seems straightforward—just two entries per day. However, when you follow the journey of that data through the payroll process, you’ll see how quickly it adds up:
Employee Entry (16 touches)
The employee writes down their clock-in and clock-out times for five days, then totals the hours each day and then for the week (2 entries per day + 5 days totalled + week totalled = 16 total).
Supervisor Review (16 touches)
A supervisor or manager reviews the timesheet to check for accuracy and approve it. (2 entries per day + 5 days totalled + week totalled = 16 total).
Payroll Administrator (6 - 12 touches)
Payroll staff calculate total hours worked, apply pay rates, account for overtime and allowances, check leave then manually enter the recorded times into a payroll system.
In total, that’s 38 - 44 separate touches for just one employee’s weekly time data. Multiply this by the number of employees in your business, and you can see how quickly this becomes a labour-intensive process prone to human error.
Imagine what that number will be if the employee is tracking time on multiple jobs or projects per day!
The Risks of Touching Data Too Many Times
Every time data is handled manually, there’s an opportunity for mistakes. Here are some common issues that arise when time data is touched too often:
1. Human Error
Employees may forget to record their exact clock-in or clock-out times.
Supervisors might misread handwriting or overlook discrepancies.
Payroll staff could miskey numbers when transferring data into a system.
2. Overpayments
Errors in rounding hours or calculating totals can lead to paying employees for time they didn’t work.
Misinterpretation of overtime rules or allowances can inflate payroll costs.
3. Time Theft
Paper timesheets make it easier for employees to engage in "creative recording" and exaggerate their hours worked.
4. Inefficiency
The sheer amount of time spent handling and verifying paper-based time data adds unnecessary administrative overhead.
Real Costs of Errors and Overpayments
Even small errors can add up over time. For example:
If an employee's hours are overreported by just 15 minutes per day due to rounding errors or miscalculations, that’s an extra 1.25 hours per week.
Multiply this by an hourly wage of $25, and you’re looking at $31.25 in overpayments per week—or $1,625 per year for just one employee.
Now imagine this happening across a team of 20 employees: that’s $32,500 in potential overpayments annually!
These costs don’t even account for the time spent correcting errors after they’re discovered or dealing with disputes from employees about their pay.
A Better Way: Automating Time and Attendance
The good news is that businesses no longer need to rely on outdated paper timesheets. Modern time and attendance systems can automate much of this process, reducing the number of "touches" dramatically while improving accuracy and efficiency.
Benefits of Automated Systems:
Real-Time Tracking: Employees clock in and out using digital systems like biometric scanners, mobile apps, or swipe cards.
Error Reduction: Automated calculations ensure accurate totals for regular hours, overtime, and deductions.
Streamlined Payroll: Time data integrates directly with payroll software, eliminating manual entry.
Compliance Assurance: Automated systems help enforce labour laws by flagging breaks, overtime thresholds, and other compliance issues.
Cost Savings: By reducing errors and overpayments, businesses save money while freeing up staff time for more strategic tasks.
Conclusion: Stop Touching Data So Much!
When it comes to managing employee time and attendance, every touchpoint represents a potential risk for errors—and those errors can be costly. Paper timesheets may seem like a simple solution on the surface, but their inefficiencies become clear when you consider how often the data is handled throughout the payroll process.
By switching to an automated time tracking system, businesses can reduce the number of touches from 38 per week down to just a few clicks—saving time, money, and headaches along the way.
It’s time to leave paper behind and embrace smarter solutions that ensure accuracy while streamlining your operations. After all, your employees’ time is valuable—and so is yours!