Why fix what’s not broken? If this is your reason for not automating payroll and time tracking, you are not alone. In fact, only 20 percent of small businesses will invest in tools aimed at increasing employee productivity this year, according to one small business survey. Why did that 20 percent take the leap? Automated time tracking is a key factor in improving the productivity of your technician team and your administrative support. Here’s why.
Information is power. Time tracking goes far beyond simply paying employees accurately. Knowing precisely how much employee time is spent on one project helps you bill accurately, project labor costs correctly and forecast revenue. Tracking time accurately will give you the competitive edge. Knowing to the second how long a job will take enables you to outbid competitors and book more jobs. Customers will be happy because you’ve met their timing expectations. Precise data will help you allocate resources appropriately, including your employees. Reduce internal stress by assigning jobs based on which employee is most productive at specific jobs. The only way to get the real-time data needed to analyze a job in such detail is by using an automated system.
Automating payroll not only saves time, but it prevents errors. The American Payroll Association estimates time correcting manual computation errors can amount to eight percent of payroll costs. Automating the process allows workers and administrative employees time to focus on other tasks. Automation also lets you figure precisely how much overhead is going toward payroll. Easily track regular verses overtime pay, salaried employees versus hourly, bonuses, sick leave, commissions and holiday pay. Add in retirement plans, health insurance, training, travel expenses, taxes, worker’s compensation and state disability insurance to get the full picture of just how much one employee costs the company. All this data is available at your fingertips in real-time when payroll is automated.
Additionally, employees have access to their own payroll data in real-time. They can personally see how long they spent on a particular project. They can easily find out how many vacation or sick days they have used this year, eliminating time spent communicating with payroll personnel and resolving discrepancies.
Prevent Time Theft
A study published just this year estimates U.S. employers lose $373 million every year due to “buddy punching,” the act of one employee clocking in for another. The study surveyed 1,000 employees and found that 16 percent admitted to clocking in for a co-worker who was running late. Even when employees are not blatantly being dishonest, human nature often leads them to round up in their favor when manually filling out a time card. The same survey found the most common error was adding an extra 15 minutes. Automated time tracking solves these problems altogether.
Wage and labor law is dynamic, both at the federal and state levels. If your company operates in more than one state, keeping up can be especially challenging. Laws governing overtime pay, recordkeeping, workers compensation, and even health care must be documented. According to the Washington Post, lawsuits centered around the Fair Labor Standards Act increased 358 percent between 2000 and 2015. Using an accurate time tracking system will ensure you are ahead of the law if a lawsuit or an audit were to arise.
Prepare for Future Growth
You may think you are keeping up with an old school paper system. However, think about where you want your business to be in three, five or ten years. Automating now will help you streamline to reach those goals, but it will also grow with you. Regardless of how many additional employees you hire, you’ll know payroll will not take any longer to complete. You’ll be able to estimate exactly how much each employee costs, arming you with the knowledge of how much you can afford to pay. Beat out industry peers by offering competitive wages. Grow your business and your employee base through solutions offered by CFO on the Go.