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The hidden “Admin Cost” of managing employee attendance & payroll

The other day I was speaking with a business owner who said that she spends 4-8 hrs a week managing employee time & attendance and payroll. Thats nuts!

Many businesses see payroll as a necessary evil and they rarely look closely at what managing these processes is costing.

This got me thinking about how much hidden cost there is when its comes to managing employee attendance and payroll. 

The conclusion I came to is that the cost of admin time can be as big an issue as employee time theft.

Admin time is one of the largest costs in your business.

Using manual systems like paper timesheets to record time and process payroll takes up a large amount of valuable admin and management time. Generally, this admin time comes at a greater hourly rate cost than that of the employees being tracked.
                                                 
Some of the common ways manual systems like paper timesheets waste admin and management time, include:

·      Printing and distributing paper time sheets.

In order for your employees to complete and submit a paper timesheet, they need to have access to a timesheet. Therefore, someone needs to spend time printing and distributing the timesheets to the team. This process could be repeated if employees lose their timesheet during the pay period.

·      Collecting and collating.

Just as is the case with distributing timesheets, you then have to track them down at the end of the pay period. Depending on whether all your staff are in one location or are spread across multiple sites, this could involve picking them up, having them scanned and emailed or even having staff take a photo and text it. Then if they haven’t completed a timesheet you need to chase these people up.

·      Timing

We often see the situation where staff wait until the end of the pay period to complete their timesheet, just in time to get paid. And the more that employees leave it until the last minute, the more time pressure that puts on your managers and admin team. Completing a timesheet in anything other than real time i.e. at the end of the week, does nothing to improve accuracy.

·    Calculating and keying

Finally, once you have collected all the timesheets or punchcards, you, a manager or your payroll admin have to manually check them, calculate each employees’ hours, check leave, allowances, and breaks, and then the data needs to be entered into your payroll and/or job costing. If an employee is completing a paper timesheet their data will be touched 30-35 times before it reaches their bank account. Each touch point takes time away from something more important. Calculating, reconciling, and keying time sheets into your payroll can cost an employer approximately 5-15 minutes per employee being paid.

This process is time consuming and a waste of valuable resources. This is time which, as a business owner, manager or payroll administrator could be spent on more important and productive activities.

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