You are here: HomeTechnologyHow are Mobile Devices & Cloud Software Affecting Payroll?

If you are like most small businesses, you are always considering new tools or opportunities to improve your business and increase profitability.  One such tool that is often overlooked or pushed off each year is a more efficient and cost effective Time and Attendance System.  An automated time system helps track employees’ time, leading to a more productive, proficient and happy workplace, not to mention the hours and thousands of dollars saved each year.

As a small business, the initial cost of a Time and Attendance System can be overwhelming or doesn’t seem to be a priority. Below are FIVE REASONS why small businesses should consider a new or upgraded timekeeping system. 

  1. Legal Issues

  2. Prevent Buddy Punching and Time Theft

  3. Spend Less Time on Payroll

  4. Informed and Engaged

  5. Choose a System to Grow with Your Business 

 

Legal Issues

Every year the IRS issues more than a billion dollars in penalties for errors related to unemployment taxes.  The Department of Labor, estimates 7 out of 10 companies fail to comply with wage-and-hour regulations, mostly due to inaccurate timekeeping, misclassification, and a lack of historical, well-organized payroll data.

As an employer, the Fair Labor Standards Act (FLSA) along with Federal and State wage laws, requires records of all employees time worked, wages paid, overtime pay, and other conditions of employment.  For example, without accurate documentation and record keeping, employers can expose themselves to possible litigation if an employee chooses to challenge back wages.  An automated Time and Attendance Systems, allows for proper record keeping with accurate time tracking that can potentially save employers thousands or millions of dollars.  

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Prevent Buddy Punching or Time Theft

According to the American Payroll Association, almost 75% of U.S. businesses are affected by time theft, and employers lose 50 minutes to 4.5 hours per week, per hourly employee for time not worked.  That’s equal to roughly 6 weeks of vacation or $4,680 of lost time and company money per year for an hourly employee making $20 per hour! 

For a small or large business the cumulative effect of a “buddy” punching in early for a friend, or an employee taking an extra 10 minute lunch, or surfing the net each day, can be extremely detrimental to a companies’ bottom line.  Implementing an automated Time and Attendance Systems using biometrics or rule settings to prevent early clock-ins, along with a strong message of compliance from management can help control abuse.

 

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Spend Less Time on Payroll

By upgrading from a paper-based time card system to an automated process, less time is spent recording, tracking, and processing payroll each day, week and month by both the employee and employer. 

Most Time and Attendance Systems can be integrated to automatically sync and download employees’ hours into their current payroll systems, improving accuracy and minimizing mistakes through human error.  The automated system, improves day to day operations for small businesses by allowing employees and employers to spend more time focused on their jobs.

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Informed and Engaged

A Time and Attendance System allows small business owners with a greater overview to improve efficiencies, achieve production goals, and manage costs of their workforce.  More accurate reporting on who’s doing what and when, may help identify hidden labor costs that affect a company’s bottom line. 

Time tracking also allows for more transparency between businesses and clients, knowing how long a job truly takes versus an estimate saves potential aggravation and grief later in a project.  The ability to review data over time, allows owners to watch for opportunities, become more efficient managing employee’s schedules, avoid areas with potential issues, and ultimately increasing productivity and profits. 


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Choose a System to Grow with Your Business

All businesses start small, with the expectation to grow.  A paper or manual system is difficult to maintain as a business gets larger and hires more employees.  Upgrading to an automated time tracking system while timekeeping needs are manageable will save time and money in the long run.


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