It’s a simple fact, workers are bad at filling out timesheets, and too many of them wait to do so on the last day of the week. Our memories certainly aren’t flawless, and it is easy to remember ourselves working more rather than less.
The consequences of human error when team members inaccurately track their time can be loss of company revenue, inaccurate reporting for job costing, and distorted numbers within the cost of goods sold (COGS).
A survey conducted by AffinityLive found that human error accounts for at least 2% of total payroll costs. Even for a small business, 2% can constitute 1000s of dollars.
People are inaccurate, have imperfect memories, and aren’t always the best at adding or calculating. We simply can’t compete with machines, and being human is what makes time tracking and attendance software a necessity for businesses.
The Benefits of Time Tracking Software
Where our abilities are inadequate, the machines pick up the slack. Time tracking and attendance software ensure there is a clock in and clock out that happens when the employee starts and leaves the job, reducing errors and the costs that come with them.
A dedicated software package is far superior to anything done with time cards or spreadsheets. Here are some of the benefits a company can expect to see after instituting time tracking software.
It seems almost needless to say, but people usually remember themselves in the best light possible. It’s easy to justify or forget lost work hours due to an emergency, long lunch break, or late arrival to work. Overpayment not only costs the company for what is paid to the employee but increases the company’s portion of the payroll tax liability as well.
Accurate working hours save companies money from overpaying employees.
Know that employees are on the job
Offsite employees can clock in or out through their mobile devices or laptop, providing real-time knowledge of attendance and that the job is being handled. There is no need for checking in with employees and time-consuming calls.
Job Costing is Accurate
Accurate job costing is essential for understanding trends and profitability of individual jobs for companies in industries like construction. Mistakenly inflated hours can be costly, make the job less profitable, and show a trend going wrong. Also, the need to import accurate hours into a company’s accounting software makes job costing a much more manageable, error-free proposition.
Time Saved from Compiling and Calculating
Time tracking software gives owners and managers immediate access to calculated and importable sheets into their payroll system. The system will let them know when timesheets are available. A tremendous amount of time is saved from tracking individual employee timecards and tabulating the total hours. That’s time returned to managing the business.
Setup is Simple
Time tracking software is easily set up, and overtime rules are easily picked from a list to be automatically calculated for payroll.
Low Cost, Big Savings
Time tracking software is generally inexpensive, which means the savings far outstrip the costs. Typically, a few dollars per employee per month is a tremendous saving considering the time lost on managing the business. An owner’s or manager’s time is worth far more for just one hour saved than the cost of the software.
If the owner’s time is worth $100/hr, the monthly cost of time tracking software is a steal.
The Income Statement is Accurate
The impact of variable costs on a company’s financial performance can be tremendous. Saving money on variable expenses also improves performance on paper, and an improved income statement is essential for a line of credit or loan application.
Those numbers also reflect more excellent value if the company is structured to sell. Thousands of dollars of lost revenue can easily equate to tens of thousands of lost money when the company is sold, depending on the multiplier used.
It needn’t be said that losing tens of thousands of dollars on a sale of the company due to not spending an insignificant amount every month isn’t an ideal outcome.
The Benefits are Clear
A company cannot afford not to use inexpensive and effective time and attendance tracking software. The money and time savings are immense compared to the cost, making it an exceptional value. Accurate job costing and a precise income statement mean that inaccurate trends needn’t be chased down or diagnosed.
An accurate income statement can help secure financing or justify a substantially greater sales price, making time and attendance software a no-brainer for businesses. Few things are more recommended than such a simple and practical addition for every business, regardless of its industry.