3 Reasons You May Be Losing Money

3 Reasons You May Be Losing Money By Not Using Our Timekeeping System

Rounding: Converting a 60 minute hour to hundredths is not always easy. Especially when you are looking at typically 4 times a day per employee(clock in, out for lunch, back from lunch, clock out). You already know that employees will most likely round in their favor if they are submitting their time themselves. And without close monitoring, some employees may slink in later and later each morning, and leave just a few minutes early each day. If employees forget to record their in or out time, then typically someone is struggling to remember, up to a month later, what time they came in or left on a certain day. Even if employees are honest, managers and HR personnel will round just to make their administrative struggle easier. Assume 15 minutes a day are rounded in 10 different employee’s favor and that those employees make an average of $10 per hour. The cost in wages lost each week is $125. This amounts to $6500 in one year! And this doesn’t take into account the additional cost of employer portion taxes and insurance premiums on those wages.
Errors: Nobody is perfect and especially when manually adding up handwritten timecards. Often the payroll administrator has difficulty reading handwriting and might make an incorrect assumption about hours worked or simply mis-key an amount into their calculator when adding up time. The American Payroll Association believes that the typical data entry error rate for payroll is roughly 1 to 8 percent. Assuming the earlier 10 employees work a 40 hour work week then their gross wages per week amount to $4000. Assuming the APA’s error rate, this hypothetical employer may be paying out anywhere from $40 (1%) to $320 (8%) per week, or in other words, up to $16640 per year!
Administrative Time: Your payroll administrator spends time preparing and handling time cards, computing time card totals, verifying time card totals, computing shift and department totals and reconstructing lost or damaged time cards. If we assume that it takes roughly 7 minutes to work on each employees timecard, there are 100 time cards to work on, and that the payroll clerk gets paid $15 per hour, then the employer is paying $175.05 for that payroll clerk to total time each payroll.
Ask us about a FREE 30 day demo of our cloud-based timekeeping software and find out just how much time and money you are wasting by not utilizing our system.