Managing employees’ time and attendance is challenging for most small businesses. Hence, integrating your time and attendance system with your payroll can help you solve the biggest headaches of managing your business. When you improve efficiency in tracking employees’ time, you save money on operations, which improves your bottom line in the long run. Let’s explore the shortcomings of manual time tracking and the importance of integrating a time attendance system into your payroll system.
Shortcomings of Manual Time Tracking
As a small and medium-sized business, your biggest expense is likely payroll. Hence, having an accurate count of employee work hours is crucial. Whether you run a healthcare organisation with a shift schedule or work in a retail setting, time and attendance tracking affects the accuracy of your payroll system.
When you use a manual time tracking system, manual inputs increase the chances of errors. If your time and attendance processes rely on manual entries and are separate from the payroll, you will likely have inaccurate work hours. That’s because you transfer the errors from the manual recording to the payroll software, leading to salary mistakes.
Manual time-tracking cannot be automated. That means if employees forget to log their work hours or complete their timesheets, they will not recall when they came to work, took a lunch break and clocked out. Such situations lead to businesses not paying employees enough for time worked or overpaying. If your workers are always complaining about being paid less for hours worked, check the time and attendance system to improve the accuracy of salaries.
The inefficiencies, additional expenses and employee discontent are compelling reasons to find an integrated approach by combining time and attendance into your payroll system.
Benefits of a Time and Attendance System
In an automated time and attendance tracking system, electronic time clocks and software collect, track and manage employee work hours. Since data is available in real time, managers can analyse it and approve the information for payroll processing. The process of tracking employee time for payroll purposes is simple. Some companies use employee company cards with a magnetic reading stripe to record time or biometric clock-in and clock-out terminals. Some businesses read times logged in and out at the employees’ computers.
Automated time and attendance systems offer the following benefits:
• Less paperwork: With an automated system, you don’t have to print time sheets for employees to fill in their work hours. You also have less data entry work to feed into the payroll systems.
• Efficient workforce management: Managers can match schedules to workload projections with automated time and attendance systems. This improves efficiency in managing employees and ensures the company meets production goals.
• Less administrative tasks: An automated time and attendance tracking system relieves managers and supervisors of time-consuming tasks since employee information is only fed into the system once. Managers can focus on other strategic activities.
• Integration with ERP/payroll: Automated time and attendance software can be integrated with various employee and business management systems. For instance, it can be integrated with ERP or a payroll system to improve efficiency.
• Prevents time fraud: Time fraud is a common challenge for businesses that cannot track employee attendance in real time. With automated systems, an employee cannot clock in on behalf of someone else since the time tracking system uses their biometric or company card information. Reducing time fraud saves your business money spent on unnecessary payroll expenses.
What Is an Integrated Time-Attendance and Payroll System?
Employee attendance and work hours go hand in hand. Therefore, the systems used to manage them should also be integrated. Integrating a time tracking and payroll system automates two related processes, saving your business time and money. You can easily convert work hours into accurate pay cheques with an integrated approach. With a time tracking system, attendance is automated, and employees punch in and out of work. There is no need for time sheets and manual recording of work hours. As a result, you avoid errors calculating work hours and minimise the chances of underpaying or overpaying workers. You can also accurately track overtime and holidays to comply with internal policy and legal requirements.
With an integrated time and attendance and payroll system, you track the following components:
• Employee shifts and work hours
• Paid and unpaid leave days
• Employee time and attendance
• Overtime
• Compensatory time
• Special payments and exceptions like gifts and bonuses
Benefits of Integrating Time and Attendance Software Into the Payroll System
Saves Your Business Money
Most small businesses have trouble accurately tracking actual time worked by employees and overtime. With manual time attendance, you rely on time sheets to calculate employee work hours, and you are likely to spend more on overtime and lose money due to inaccurate tracking of work hours. With an integrated time tracking and payroll system, you track attendance and work hours in real-time. That means you can eliminate excessive overtime and reduce the chances of time fraud. An integrated system also allows companies to plan for their budgeted work hours and keep track of the work hours to ensure they don’t exceed the projections.
Accuracy and Data Security
Time tracking and payroll are a company’s most important human resource operations. Hence, it is important to maintain the accuracy of information. Without accuracy, you pay employees less or more for their work time. In an integrated system, you can keep track of working hours, overtime and employee absences. Accurate time tracking translates to accurate pay. There are no manual time sheets for work hours calculations, which can lead to errors. With one centralised system, you don’t have to worry about payroll inaccuracies since the time and attendance tracking system and the payroll software are in line.
Since payroll and time tracking systems store sensitive human resource information, privacy and data security are crucial. An integrated payroll system has the best security to ensure the data remains safe. You can minimise data breaches and limit access to information.
Transparency
With manual systems, employees can’t access their attendance and payroll data due to the paperwork involved in preparing time sheets. Integrating time and attendance software with payroll systems provides employees with real-time information. Employees can check their work hours and payroll-related data, making the process transparent. That level of transparency increases the company’s reliability in employees’ eyes.
Improving Employee Satisfaction
Handling time-off requests, scheduling employees, and payroll are vital in maintaining a satisfied workforce. When you minimise payroll errors, issues like turnover dramatically decrease. With an automated system, you can easily review and approve time-off requests from employees and manage planned absences to reduce the impact on the company. When payroll and attendance information is available on the same platform, it improves the efficiency of employee management.
Better Compliance
A time-tracking system that integrates payroll software determines employees’ pay based on actual hours worked. It ensures compliance with company policies and legislation. Since employees should be paid for their contracted hours, keeping track of the work hours is vital to ensure accurate pay. With an integrated system, you calculate overtime and compensate employees for hours worked. By integrating time tracking and payroll, you ensure accurate pay and avoid claims of non-compliance. For instance, according to legislation or local laws, some employees may have maximum work hours per week or shift, and a time tracking system helps you stay compliant with the law.
Conclusion
Failing to integrate time and attendance tracking into your payroll software can drag down your productivity and bottom line. Switching to an integrated payroll system helps you keep accurate records and ensure compliance with various wage and work-hour laws. You also save money by reducing time fraud and unnecessary payroll expenses since you can accurately budget for and track work hours. If you have payroll software, consider improving efficiency by incorporating time and attendance tracking systems.