7 Ways Employee Time Tracking Can Save Your Business Money

Ways Employee Time Tracking Can Save Your Business Money
By Nakornsri Sintaisong | 5 minute read

Have you considered employee time tracking for your company? What are the reasons you are yet to adopt this technology in your business operations? Is it the scale of your business? The number of your employees? Or you just don’t see the need for it yet? 

We’re all familiar with the phrase ‘time is money’. Several business owners continue to underestimate the opportunity cost of time mismanagement. Overall, they’re losing thousands of dollars because of it.

There are several benefits to employee time tracking. It includes the minimization of time theft and the reduction of payroll errors. It also helps to avoid costly fair work lawsuits. The benefits of switching to this innovative solution far outweigh any bias for the outdated manual timesheet system

How can a time tracking app save your company money?

1. Minimize Employee Time Theft

Data from the American Payroll Association reveals that employees steal about 4.5 hours each week. You can call it time clock fraud, time theft or mere carelessness. But the result is the same - your employees are bound to over claim their hours worked with a manual time clock system. 

If you want to cut employee time theft, time tracker is the way. Time theft occurs in various ways, arriving late to work, leaving early for lunch and coming back late. It also includes deliberately leaving late so as to claim overtime pay. Whether deliberate or accidental, employees often steal time from business owners.

2. Reduce Payroll Errors

Employee labor is about a business owner’s greatest expense. It is, therefore, necessary to reduce the costs through employee time clock. The American Payroll Association has estimated that human error accounts for 1% to 8% of the cost in manual time payroll preparations. The errors occur as typos, memory lapses and innocent slips. 

It also costs more time to manually enter employee timesheet into your payroll software. You need to double- and triple-check the numbers before concluding the task. Next is the administrative cost of manual time entry. The costs are incurred in both the time and money it requires to re-process fees and re-issue paychecks.

3. Reduce Employee Overtime

The most effective way to reduce employee overtime is tracking employees’ time. Business owners have to ensure that employees make the most of normal employee hours. This can happen when they work smarter, not longer. With proper time monitoring, employees will spend most of their time on their primary responsibilities.

Employee time tracking provides access for business owners to view employee working schedules in real-time. It also helps them to manage employees that clock overtime hours. With proper scheduling methods, chances of extending working hours will reduce. You will rarely need to pay out vacation days as your employees will be likely to use them.  This will keep your budget and planning consistently.

4. Prevent Buddy Punching

Business owners can end the culture of buddy punching with time tracking software.  Time tracking software uses a biometric system to ensure the physical presence of employees when they clock in. Buddy punching is unethical and illegal; it costs employers in unworked wages. It reduces productivity, return on investment and the profits of businesses. It also limits the employer’s ability to create more benefits for their employees.

Employee time tracking reduces buddy punching. This happens through biometric information like fingerprint and hand geometry. Hand geometry does not scan the surface area of the hand. These factors make the software legal for business owners.

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5. Improve Employee Productivity

It is challenging to determine how much resources your company will need at any particular time. Besides, you need to understand how to allocate your employees’ work hours. Since it is limited in supply. You can achieve this by automating your crew’s time tracking. Create a blueprint for your day-to-day schedule to organize your production and workflow.

Employee time tracking also helps you to sort between under-utilized and overworked employees. You can identify those who have reached their maximum working hours. You can also identify those who still have some hours to spare. The former tend to become less productive the more they continue to work. The quality of output from overworked employees always takes a nosedive. 

Your employee’s happiness and health is the heartbeat of your business. You need to track their time to get the most from each person.

6. Eliminate Overhead & Administrative Time

Reducing overhead costs is essential to the growth of small businesses. You can save from your total cost by reducing administrative time and payroll overhead.

Time clock apps allow you to keep up to date on holidays and time-off requests. You can also manage overtime and track hours. Employees can view, receive notifications and manage personal information on the self-service portal. Time tracking software simplifies your business process and changes how you conduct business.

7. Avoid Costly Fair Work Lawsuits

As a business owner, you have to adhere to Fair Work standards. If you don’t manage time properly, you could be hit with a costly lawsuit. If you are hit with such a lawsuit, the first requirement by your employment counsel is your employee timesheet records. These records prove your employees' work duration, break length, and overtime.

This information is only readily available, accessible and accurate with employee time tracking. Without it, it is your disgruntled employee’s word against yours. And the odds are stacked against you. 

Time tracking prevents such disputes from occurring in the first place. Where they do occur, it increases your chances of settling out of court. It keeps you organized and fast. It can also prevent the need for repayment from back pay accumulation (penalty rate inclusive), damages and legal fees.


The real cost of time management extends beyond wasted minutes or unproductive hours. Failure to track time could cost you potential new customers. It also costs valuable business insight and leads to expensive lawsuits. 

Employee time tracking is a must, regardless of your company’s products or services. Maintain detailed records of your employees’ work. Monitor their productivity, modify schedules proactively, and improve their morale. These will increase your company savings and streamline your working process.

8,000+ companies use ClockShark to track employees and save time every month.

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