• By timehub
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  • 3 Sep 2017
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The real and hidden costs of using paper time sheets

The common view, when it comes to having employees track their hours worked 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/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 are 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.

If only there was an easier, more accurate way to manage the way staff record their hours of work, then employers could improve the accuracy and timeliness of the payroll process, which would lead to reduced processing time, more accurate payments to staff, better staff morale and savings for the business in both time and wages.

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" 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" is between 2-5% of total payroll in companies that use traditional time cards.
  • Savings per year on time card calculating, reconciling and keying into payroll. Research shows that manual calculation and keying of time cards/sheets takes approximately 5 minutes per card.

 

Find out what it could be costing your business -Here

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 in the workspace.

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 fast and accurate capture, calculation, and processing of employee attendance data.

As a result, we have created TimeHub — Who Worked When, a cloud-based, Employee Time & Attendance System. TimeHub focuses on the key elements, ‘who worked when’, 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 TimeHub, you will have an increased accuracy of data, greater compliance, and a better insight into employee productivity. Our innovative, cloud-based, time and attendance system captures employee attendance through the devices they are used to, such as tablets (or smartphones if staff are mobile). These devices become time clocks and replace the traditional time sheet and punch clock.

The TimeHub website then calculates 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.

 Click here to request a free review of how you could save time and money on managing employee attendance