Lately, in light of the current challenges we are all facing, I’ve been thinking a lot about how important it is to manage your payroll accurately and in a timely fashion.
Your staff want (need) to be paid correctly and you want this also.
One area which has a major impact on the accuracy of your payroll process is how you capture your employees time. Is it accurate? Is it timely? Is it Real.
When it's not (whether this is perceived or real) it erodes TRUST.
When you use a manual system like paper time sheets, you are opening yourself up to thoughts that you don’t trust your employees to write down the correct times.
You are also opening yourself up to staff being concerned that their hours may not be calculated correctly and/or keyed into the payroll system correctly.
Having a situation where neither side trusts the other (even if it is never stated) is not good for your business.
Add to this the fact that when you use a manual system like paper time sheets, an employee’s data will be touched over around 35 times every pay period, before they receive their pay into their bank account. The opportunity for error is massive.
Stopping an employee who is intentionally recording their hours incorrectly is something which every employer would want to stop. Yet experience has shown me that most employees who are cribbing a minute or three here and there do not see it as theft.
They naively think “its ok” to write down that they were on time when they were 2 minutes late because “no one will care” or worse, they are not sure the boss is working out the time sheets correctly or he isn’t keying the right data into the payroll, so why should they worry.
The irony of asking staff to use a manual system which is open to abuse i.e. a paper time sheet is inviting trouble, yet every day I hear – “we’ve always done it this way” and then in the next breath “I think some staff are recording the wrong times”
One of the key benefits of automating your employee attendance is that computers know how to calculate time, total and collate data, apply rules, transfer data and they do it all at speed.
This removes the factor of human error (intentional or accidental).
If your employees clock in and out as they should, they can trust that they will be paid accurately and on time for the hours they work, as the system will work out everything based on the company’s rules and it will also speed up the process. You will be able to trust that you are paying your employees accurately for the hours they work, and, in the process, you will be saving money with more accurate data and reduced processing time from not having to manually calculate or key anything into your payroll.
With modern time and attendance systems, you can see your employees clocked times in “real-time” from any internet connected device. Therefore, if you still don’t trust them you can check where and when they clocked.
As a bonus, experience has shown us that automating employee time and attendance will pay for itself in less than three months with typical savings of between 2% and 5% of annual wages.
Another issue often overlooked by employers using manual systems is the record keeping requirements of the Employment Relations Act and the Health and Safety in Employment Act. All employers must keep a record of the hours worked each day, including start time, finish time and any non-paid breaks taken. These systems will ensure you meet your record keeping obligations under these under these acts.
So, the question to ask yourself is not – “Do I have a time recording problem” but rather “Do I have a trust problem” and then “what can I do about it to ensure we are accurately recording the hours' staff work in a way which is fair, accurate and equitable to both the employee and the business”
If you would like help answering this question you can book a free, no obligation chat with me about your current method of tracking employees attendance.