How Employee Time Clock Software Will Save You Money

Here’s a question I want you to ask yourself:

How Much Time and Money Are You Wasting Collecting Employee Timesheets and Processing Payroll?

If you’re not using a good employee time clock software system then the answer to this question may be A LOT! Let’s have a look at the four areas in your employee time clock and timesheet processes that are costing you money.

The Time Taken for Manual Calculations

Any manual timesheet system requires someone in your payroll staff to key in and manually total the timesheet for each and every employee in your organization. Our experience suggests (and industry experts agree with us) that it takes, on average, about 2 minutes to key in and add up a week of time clock information for a single employee. If your payroll staff cost you $25 per hour then you’re looking at a cost of $43 per year per employee just to manually add up your timesheets.

Don’t think that software can save you time? Well, think again. Here’s what Eduardo Nilo had to say about Time Clock MTS:


Potential Savings (running total) : $43 per employee per year

Errors in Manual Calculations

If you’re making manual time clock calculations for your employees then you’re making mistakes. There’s no avoiding it. Mistakes happen whether it be because your employee timesheets are illegible, your payroll staff make keying errors, or sometimes their math is just plain wrong. Conservative estimates suggest that up to 1% of payroll calculations are wrong due to errors in manual calculations. Even if we halve that number (that’s just one error in 200 manual time clock calculations) you’re still looking at a cost of $100 per employee per year due to manual calculation errors. How did I arrive at that number? Well, assuming that the average employee works 2000 hours per year an error rate of 0.5% results in a potential 10 hours of manual calculation errors. At a rate of $10 per hour that’s a cost of $100.

A good employee timeclock system will make things easy for you and stop payroll calculation errors. Here’s what one happy Time Clock MTS user had to say about how our software was helping him:


Potential Savings (running total) : $143 per employee per year

Recovering Stolen Employee Time

Whether you call it time theft, time clock fraud, or simple carelessness your employees WILL over claim their hours worked if you’re using an manual time clock system or manual timesheets. It might be because they get to work late, leave slightly early for lunch, come back slightly late, or deliberately leave late in an effort to claim over-time pay. It can also be simply filling in the wrong times on paper timesheets or time cards. How much time do employees steal whether knowingly or un-knowingly? Some studies suggest it’s up to 4 hours a week (or nearly 10% of your payroll)!

Regardless of how it happens a well implemented time card system will help to eliminate this. Here’s what a user of our time clock system, Time Clock MTS, said when they started using our system:


What sort of savings can software like Time Clock MTS deliver from reduction in stolen employee time? Well, even if it can stop 25% of stolen time you’re looking at up to 50 hours of saved payroll time per employee per year. Or a cost saving $500 per employee per year.

Potential Savings (running total) : $643 per employee per year

Stationery and Consumables Savings

The final area in which employee timecard software will help you save money is through the elimination of the need for time cards and paper timesheets. It’s not a huge saving but even if you bulk buy your time cards from Staples or a similar store you’re still going to spend $5 per employee each and every year on consumables. One company using Time Clock MTS is saving real money on paper and printing costs when compare with their old manual systems. Here’s what they had to say:


Potential Savings (grand total) : $648 per employee per year

Conclusions

So how much money are you wasting not using time clock software? Well it turns out the answer is about $650 PER YEAR PER EMPLOYEE.

The four ways you’re going to save money right now by using time clock software is through the elimination of manual time card calculations, stopping payroll calculation errors, reducing employee time fraud or theft, and by eliminating time card consumables. The cost savings you can expect by improvements in each of these four areas is a quite remarkable $648 per employee per year. This far outweighs the cost of an employee timeclock system such as Time Clock MTS which is just $99 (US) for the single computer edition that can track up to 500 employees.

There’s a no-obligation fully functional 30 day trial available, so why not give our time clock software a try and start saving money today!

Choosing Employee Time Clock Software

I thought it would be worthwhile looking at the major factors that should be considered by any company when deciding whether a particular employee time clock software package is going to be suitable for them. Over the last few years I’ve had thousands of emails from companies who are looking for a new system to track their employee time clock data and this list of six review points is based on what I’ve learned from those emails.

Does the Time Clock Software Run on Your Computers?

Most companies have a mix of computers, new and old, a mix of different versions of Windows, with some (or more likely) most computers cluttered down with years of installed software and Windows service packs. Getting software to run on these older computers can be somewhat hit and miss. These points must be considered carefully especially if such a computer (or computers) have been ear-marked as the potential candidates to become the new employee timeclock computers. So, the question to be asked is, will the software you’re evaluating run on these computers? Don’t take the vendors word for it (they’ll almost never say their software won’t work on your computers). Take advantage of their free time clock trial (they do have one don’t they?) and verify that the software will run on all the computers you plan on installing it on.

Upfront and Recurring Costs

The next point to consider when reviewing your potential new software is the up-front and any recurring costs. Upfront costs are just those to purchase a license to use the software. On-going costs could include a fee to keep the software working each year, a fee for on-going technical support, and a fee for maintenance (access to software updates). It’s not unusual for software vendors to have a low up-front cost and then backend the deal with high ongoing costs so beware of getting caught out. I’d suggest calculating software costs out to a period of five years to work out the real cost of ownership of your new employee time clock software.

On-Going Technical Support

Any timeclock program for your employees is going to become an integral part of your company so you want to ensure that the time clock vendor is going to be there to support you during this time. This support should take many forms. The first (and most important) point to consider when evaluating a potential timeclock program is the quantity and quality of help documents, getting started guides, and tutorial videos. You’re going to want that sort of information at your fingertips when you are trying to sort out problems setting up features within the software. Things such as complex overtime arrangements, or vacation accruals, or time rounding, or one of dozens of other requirements companies have of their attendance systems should be well documented and easy to understand.

The second point to consider when evaluating technical support is the quality of the support you receive direct from the time clock software vendor. At some point you’ll probably want to contact them during your software trial period to evaluate both the timeliness and quality of their response. Remember you could end up using the same employee timeclock software for years so you need to ensure that the support staff are people you can work with.

Features of the Time Clock Software

Ensuring that the features that a time clock program will meet your requirements is potentially the most important factor when evaluating that software. Look beyond your need for employees to simply clock in and out and track their hours worked. Look at your deeper on-going requirements and determine what time clock needs you have that you’ll be using all the time. Great time clock software will allow your employees to accrue and track vacation and sick time, it’ll allow them to take and track breaks, and it’ll allow them to clock in and out of different jobs that you need to track. One the administrative side of things you’re almost certainly going to want the the software to do all of your overtime calculations for you and you’ll need some sort of built in time clock security to stop time clock fraud. The manager of the new time clock system should be involved in evaluating the new time clock system and be allowed to voice their needs for features they’d need the most. Be sure not to make decisions in isolation to the people who will actually be living with the software day-to-day.

Ease of Use

There’s no getting away from the need to track employee time and attendance if your employees are to be paid to keep them happy and you’re making sure you’re not paying them too much (to keep your business happy). If done well, and with a minimum of fuss then it will hardly be noticed, but if done poorly it can certainly negatively effect the internal workings of your company and make your employees less than happy. With this in mind when you’re choosing an employee attendance system you should ensure that it is easy to use. There are two key usage areas that you must examine closely when trialling the software. First, make sure it’s super easy for employees to clock in and out. If your chosen employee timeclock system adds even a few seconds per punch in and out then those seconds add up across the weeks of the year. And that time is wasted money. The second area to examine closely are the administrative and reporting functions. Adding new employees, editing time punches, adding time taken off, and tracking sick time should be easy and intuitive. Running payroll reports should be a snap. Make sure the software allows you to filter reports by date, employees, shifts and departments so that you can monitor your different cost centers easily. And finally make sure the software can export reports to payroll systems and your spreadsheet software of choice.

Quality of the Time Clock Reports

The last point to look at when you’re evaluating potential time clock software is the quality and quantity of reports available. There should be simple reports available allowing to review employee lists, employee PINs, active job lists, and at least one report that can quickly show you who is or is not at work. Then of course there should be payroll based reports that describe how many hours employees have worked, overtime worked, and of course pay owing. In more advanced systems you’d want to see reports such as job cost reports, weekly and monthly time breakdown reports, vacation and sick accrual reports, and detailed audit trail logging of employee time punches. Also, as I’ve mentioned previously, ensure that your chosen software can export reports to a variety of different formats and can create export formats suitable for export to your payroll system of choice.

I hope you’ve found this list of six key factors to consider before purchasing an employee time clock software system useful. If you’ve got any questions please feel free to Contact Us.