Businesses have been recording the punch times of their workers since, well, the beginning of time! But today’s organisations have advanced time and attendance software systems that use a variety of high-tech tools to not only record time punches but also use that data to improve the efficiency and profitability of the business.
At what point, however, does it become cost effective to buy a Time and Attendance software system? Is there any benefit for companies with only a handful of employees or small businesses with fewer than a dozen workers? It depends on a few different factors.
The Cost of Time & Attendance Software
A new time and attendance software system can be very costly. Some advanced systems with a lot of analytical functions can be very expensive while more basic systems can be purchased for perhaps a few hundred Euros.
As in any major purchase, before buying a time and attendance system, most organisations would be served by doing a cost/benefits analysis. If the cost of the savings the business will realise through lost punches, overtime, inaccuracies and other common time and attendance problems is higher than the cost of the system, it’s probably a good idea to move forward with the purchase.
Keep in mind that the cost of the time and attendance system can be accrued over several years. Theoretically, the system should be depreciated over its usable life. Assuming it’s 10 years, then the cost of the system per year is only .10 of its total cost – a figure that generally can more than be made up for with efficiencies and savings.
But where is this savings coming from?
Improved Accuracy with a Time & Attendance System
Time and attendance software provides better accuracy than most punch clock systems or requiring employees to sign in and out. It can help prevent missed punches and keep track of late punches, early punch-ins, and whether one employee is punching in for another.
By providing your payroll department with a more accurate picture of the real time your workers are on the job, it helps reduce the risk of over- or underpaying your workers. This not only helps improve employee morale but saves you real money in actual payroll costs.
Time and attendance software can also automatically calculate such things as overtime pay, holiday pay, vacation accrual, taxes, employee benefits, and other calculations that usually have to be done manually under a time clock system. This not only makes the system, even more accurate, but it also reduces the amount of labour your business has to pay to calculate payroll.
In some instances, the savings realised in reduced payroll costs alone is enough to justify the purchase of time and attendance software.
Tackle Payroll Fraud with Time & Attendance Software
Another huge savings comes in the area of payroll fraud. For many small businesses today, payroll fraud is one of the leading causes of eroding profits. When workers punch in when they shouldn’t, when they “steal time” by punching in other employees who aren’t actually on the job, and when they try to con the system by exploiting a time clock system’s inherent shortcomings, it costs your business real money.
Automated, web-based time and attendance systems help reduce the risk of payroll fraud. Some use biometrics such as fingerprints, facial recognition scans, or retinal scans to verify the identity of employees at the beginning and end of every shift, making it practically impossible to cheat the system.
If your business has ever been audited by the Office of Revenue Commissioners, you already are familiar with the level of detail their auditors are looking for. You need to be able to produce data from many years in the past.
When you use manual time and attendance systems, this often requires storing boxes and crates of physical payroll records just in case you someday may need to produce them for an audit. The costs of this storage need to be added to your overall payroll costs – although usually they are just folded into the rent or mortgage costs for most businesses.
But digital, web-based time and attendance systems lets you store all this information on the Cloud or some other digital location. It also allows you instant access to whatever records you need going back dozens or even (theoretically, at least) hundreds of years with literally the push of a button.
Value of Data Generated
Another benefit of web-based time and attendance software that many businesses fail to consider when making a “buy or no buy” decision is the value of the data it generates.
Your business may be able to use this information now – or in the near future – to analyse labour costs, determine more efficient ways to run your business, and help drive more profits. Analytical tools are getting faster and more affordable in recent years. So even the smallest businesses can now afford to use them to reduce their costs and improve their profit margins.
Given all these benefits, even the most dubious small business owner should be able to see the benefits of a web-based time and attendance software system such as those offered by Advance Systems. Its a win-win scenario for any company wishing to feel in control again. Implementing a Time & Attendance system will benefit your organisation and at the same time enable your HR Department to track the labour force. As multi-location and flexi-time are now the norm, it is crucial to have a tool that can report and monitor using real time people analytics.