How to Save Time and Money in a Tight Economy
As our country recovers from the COVID-19 pandemic, many businesses are looking for ways to cut expenses and tighten up the budget. Since employee payroll is typically the biggest monthly expense for a business, one of the best ways to save both time and money is by increasing efficiency in the area of employee time tracking. In this article, we'll outline 4 ways your business can immediately begin saving money by switching away from paper timekeeping to employee time tracking software.
1. Stop Totaling Timecards Manually
The American Payroll Association (APA) estimates that most payroll clerks spend around 7 minutes totaling a single paper timecard. This means that totaling hours and overtime for a small company with 10 employees could take a payroll clerk 70 minutes for a single week's payroll, which adds up to 5.5 hours a month. Payroll clerks in the US make an average wage of $20 and hour, so a small business can easily spend $1300 a year just on administrative hours for totaling timecards.
2. Eliminate Payroll Errors
Another report by the APA estimates that clerical errors during timecard totaling can cost a business 1 to 8% of their annual payroll. Clerical errors on timesheets can include miscalculated hour totals, errors in overtime calculations, and transcription errors when entering time card hours in payroll software. If you have 10 employees making average income, you could be losing $3000 to $24,000 a year in clerical errors alone.
3. Control Overtime
When employees punch the clock a little early, take a short lunch and punch out a few minutes late, overtime can add up quickly - especially if multiple employees follow this practice. Unauthorized overtime can easily add up to 40-50 minutes of overtime a week per employee. If several employees do this, it can easily cost a business 120 hours a year of unapproved, unwanted overtime. Using the average hourly rate of $23/hour that adds up to $2,760 a year.
4. Prevent Buddy Punching
Buddy punching is when one worker punches the clock for another worker who has not arrived at work, or punching someone out after they've already gone for the day. This common practice can cost a business up to 2.2% of their annual payroll. To continue our example, with a yearly payroll of $300,000, buddy punching can end up costing an additional $6,600.
The Cost of Paper Timekeeping
If you add up the above common timekeeping issues, an employer with a 10 person team could easily be spending $34,000 a year on manual time card calculations, clerical errors, unauthorized overtime and buddy punching. All of these issues can be resolved with modern time clock software that automatically totals timesheets, controls time clock use and curbs buddy punching.
Get Started with Virtual TimeClock
Ready to leave paper timecards behind? At Redcort Software, employee time tracking software with best-in-class customer support has been our focus for thirty years. Virtual TimeClock helps thousands of employers switch from paper timesheets and save time and money. There's no reason to pay monthly subscriptions for a time clock service, Virtual TimeClock is a one-time software purchase that you own forever. No strings attached. Don't take our word for it, check out hundreds of user reviews >