The common view, when it comes to having employees track the hours they work via time sheets, is that it’s an easy process for them to complete the time sheet each week, so why improve the process.
Yet, there is so much more to it and so many hidden costs, as well as risks for the business.
For employers, especially in small to medium businesses, it’s a constant challenge to manage employee attendance and get the payroll done on time.
Every week, these employers and their staff, spend hours completing and calculating time sheets, then keying this data into a payroll in order to get the payroll done and the staff paid.
This is especially true if you’re a small business.
The main problem they face is that this process is manual, error prone and time-consuming, which leads to incorrect under/over payments, wasted time, limited access to information and non-compliance with the record keeping requirements of New Zealand Employment Law.
To date, their best alternative has been an automated time & attendance system such as biometric time clocks, but of course, they can be expensive, need to be in a single location and don’t always link to your payroll.
With the desire of companies to better manage their payroll costs and the focus by government agencies such as the Dept of Labour on record keeping plus an ever more mobile workforce, the problem will only get worse over time.
Research carried out by the Robert Half Group and also the American Payroll Association’s study estimating lost time due to buddy clock-punching, "Time Theft" (their term not ours) and errors, shows that manual systems can have a real financial impact. The results for any given business could be lower, but could equally be much higher.
They identified 4 keys areas:
The research shows an actual potential error rate of between 1-8% of the total payroll in companies that use traditional time sheets or punch clocks.
It also identified the average weekly "theft" (We prefer the term Timecreep) of time, long lunches and breaks, tardiness, early departures, etc. is 4 hours and 5 minutes per employee!
Research shows, the average loss as a result of "Buddy Punching" (clocking in or recording a timesheet for another employee) is between 2-5% of total payroll in companies that use traditional time sheets/cards.
Time spent on calculating time sheet/cards, reconciling and keying into payroll. Research shows that manual calculation and keying of time cards/sheets takes approximately 5 minutes per card.
While it is unlikely you will be experiencing all of these issues, the potential cost is somewhere between 5 and 15% of your annual payroll cost!
We have created a "Hidden Cost" calculator. Find out what it could be costing your business -Click Here (Simply fill in the yellow boxes and click calculate)
In addition to the financial benefits of improving the way staff track their hours, there is the increasingly important consideration of compliance which is often overlooked. In recent times we have seen the spotlight being put on employers for their lack of accurate record keeping when it comes to meeting their obligations under:
- The Employment Relations Act
- The Holidays Act
- The Health and Safety in Employment Act
Under these Acts, an employer is required to keep accurate, accessible records of the day’s, hours and pay for each day worked or taken as leave. You must also know who is on site at all times and ensure employees are not working excessive/unsafe hours.
With the thousands of small to medium businesses using manual systems such as timesheets and punch clocks, we identified that there is a clear opportunity for us to make a positive impact on the lives of a huge number of businesses and employees.
Through our 20+ year experience in payroll, providing services to payroll managers via our companies, ‘Comacc The Payroll People’ and ‘Just Payslips’, we’ve learned that the key to effective payroll management is:
The fast and accurate capture, calculation, and processing of employee attendance data.
As a result, we have created Mytimesheets our cloud-based, Digital Timesheet and Employee Time & Attendance System. Mytimesheets help you know ‘who worked when, where and on what’ in realtime, and simplifies your payroll management experience.
Those with experience in payroll management will know that regardless of the size and nature of the business, payroll can be a stressful and time-consuming process; one which has an impact on all individuals within the company. TimeHub makes this process easier!
With MyTimesheets , you will have an increased accuracy of data, greater compliance, and a better insight into employee productivity.
Our innovative, cloud-based, time and attendance systems capture employee attendance through the devices they are used to using, such as tablets (or smartphones if staff are mobile) and PC's. These devices become time clocks and replace the traditional time sheet and punch clock.
The MyTimesheets employer management websites then calculate the hours worked, overtime, leave and allowances, before you export this information to your payroll system.
Thus improving payroll accuracy while reducing the time it takes to pay your staff.
It’s “time” to move away from out-dated recording methods such as time clocks and paper-based time sheets, and allow your employees to clock-in using a Tablet or their Smartphone instead.