How Automated Time Tracking Streamlines Your Payroll Process

Category: Time | By Cristina Johnson | 4 minute read | Updated Aug 30, 2022
How to Use Automated Time Tracking to Improve Your Payroll Process

Are your payroll system and procedures up-to-date? If you’re still using paper timesheets, you are probably losing a lot of money without realizing it. Automated time tracking will improve your payroll process.

In a 2017 report by the National Small Business Association, 45 percent of small to medium-sized businesses use an outside payroll service to help manage payroll. The report showed that six percent spend more than 10 hours a month on payroll and another 40 percent do payroll for three to 10 hours per month.

Research has shown that large projects completed by field workers (such as construction) typically take 20 percent longer to complete than estimated and can go up to 80 percent over budget.

The findings, reported by McKinsey, show that organizations need to digitize to stay competitive. Relying on pen-and-paper to track time and manage projects has become outdated.

Common Payroll Mistakes

When you do payroll manually, it increases your risks of multiple types of common payroll mistakes.

Employee Misclassification

Employee misclassification is a common occurrence that carries stiff penalties. As many as 30 percent or more of employers misclassify employees as contractors.

Payroll Tax Non-compliance

Similarly, when you do manual payroll, you risk tax non-compliance. Payroll taxes make up nearly 72 percent of all revenue the IRS collects so it is important to stay on top of.

Incorrect records

Whether intentional or by accident, inaccurate records for hours worked results in inaccurate payroll.

Missing Federal Deposit Deadlines

Employment tax deposits must be made either weekly or semi-weekly. If they’re not paid accurately and on time, penalties add up and if you’re doing manual payroll, you risk being late due to trying to collect all of the payroll information you need to make the deposits.

Failing to Report All Taxable Forms of Compensation

Payroll is a complex process with a lot of moving pieces to stay on top of. Manual payroll entry can lend itself to failing to include all taxable compensation.

Payroll Inaccuracies Cost You Money

One way that companies are losing money is by using traditional timekeeping policies. These techniques are rife with the potential for human error and abuse.

Not only must your payroll department rely on the accuracy and honesty of your workers, but their information has to be legible.

Timesheet rounding can also be costing you tens of thousands of dollars, depending on the size of your company.

When your payroll department receives these handwritten timesheets, they need to spend time entering (and re-entering) the figures. These entries need to be accurate, too.

Ever heard of The Telephone Game? Participants begin with a phrase and whisper it to the person nearest them. By the time it reaches the last person, it is often different from when it began.

The same can be said for hand-written timesheets which is why you need to improve the payroll process if you’re still using pen and paper for your payroll system.

When these time records pass from worker to supervisor to payroll, the chances of human error increase. In industries where field workers are often exposed to elements, natural occurrences such as rain or chemicals can also damage these paper records. 

When that happens, employees will need to redo them from memory. Having to redo a timesheet from memory is sure to result in frequent errors, whether intentional or not.

Another real problem with traditional timekeeping techniques is the potential for buddy punching. This practice affects almost 75 percent of small businesses in America. That’s why many firms track time in construction with mobile time tracking.

What Is Automated Employee Time Tracking?

Automated employee time tracking is using technology to measure an employee’s tasks and hours throughout each pay period to incorporate into your payroll system.

Different platforms offer different types of time clocking. For example, ClockShark offers a mobile time-tracking app that employees can use when working by clocking in and out with a simple swipe on their smartphone.

The KioskClock uses facial recognition to guard against buddy punching or Web Punch Clock for office employees to use.

The time-tracking technology you choose depends on your company’s needs. Ultimately, it streamlines and simplifies your payroll (and other) procedures and reduces the risks of errors.

Benefits of Time Tracking Technology to Reduce Payroll Errors

Business owners, managers, and supervisors can’t be everywhere, all the time. Having to rely on outdated payroll management procedures is sure to cost you money. The use of employee time-tracking technology removes payroll errors in many ways.

1. No Buddy Punching

Buddy punching is a thing of the past when using automated employee time tracking. Since the program is easily downloaded on your employees’ smartphones, the risk of buddy punching is reduced.

With the use of biometric time trackers such as facial recognition, it is impossible for workers to punch in or out for one another.

2. Accurate Time Keeping

When you can record the exact time a worker is spending on a task, you know if they are taking too long to perform it. Automated time tracking also eliminates timesheet rounding.

Instead of risking over- or under-paying your employees with timesheet rounding, you are paying for exactly the number of hours they work, to the minute. You can also use automated time tracking to review accurate time reports and stay on top of overtime.

3. Correct Time Spent On Tasks

When you send employees to do a task or project, chances are you have a fairly good idea of how long it is supposed to take. Being able to track an employee's time during particular projects or tasks, means you won’t be paying for them to be idle or take unauthorized breaks.

Since employees know they are being monitored in real-time, they are more likely to engage in the job and less likely to procrastinate or become distracted.

Employee time tracking increases accountability in this way so you can make sure you are getting from your employees what you are paying for.

4. Identify Outdated Policies/Procedures/Equipment

With automated employee time tracking, you can much more easily find out if your company is using outdated policies or procedures.

For example, if you have an exceptional employee who suddenly starts under-performing, it could be because they are working with a program or piece of equipment that needs to be replaced or repaired.

Real-time tracking helps you identify such things, so you can make sure your employees can perform at their best.

5. Speed Up Payroll Processes

With so many hours spent on payroll processing in the traditional way, time-tracking technology will reduce the amount of time your payroll department spends on payroll management.

This kind of payroll management not only reduces the risk of errors, but also the amount you pay to payroll personnel for their hours of work. This lets them focus on other administrative tasks.

6. Cut Down On Overtime Costs

Automated employee time tracking allows you to integrate with scheduling. This means you can review hours worked and make schedule changes quickly, easily, and accurately. This way you cut down on unauthorized (or unintended) overtime wages.

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Improve Payroll Processes With Automation

Investing in technology is not just important in today’s global workforce; it is critical to an organization’s success. Employee time-tracking technology is one way companies are capitalizing on high-tech in simple, cost-effective ways that improve their payroll process.

9,500+ companies use ClockShark to track employees and save time every month.

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