Businesses that manually track the hours of multiple employee’s time cards often run into an increase in erroneous data due to human error; including that of the employee or that of the payroll clerk. Either way, this could result in either over or underpayments in salary and wages and in payroll taxes.
In addition to that, other information must be captured and tracked that could also lend itself to human error as well. Such as manually recording sick leave, vacation time, personal leaves or holiday time. This method could also be very costly for the employer in addition to the risk of an increase in additional errors. Many businesses may be on the fence about whether or not to invest in electronic time sheets. However, you may find that once implemented, that they are very useful. If you are on the fence about investing in electronic time sheets, below are some benefits associated with using electronic time sheets.
- Real Time Documentation
Let’s face it, over the years, many employees have inflated the number of hours they’ve actually worked, which resulted in more salaries and wages as well as higher payroll taxes being paid. Using an electronic timesheet allows trackable devices such as an employee badge to be scanned. When doing so, it provides a record of when each employee arrives to work, takes and returns from lunch breaks and leaves for the day – all in real time. It provides a permanent record of the employee’s hours worked, which removes errors and uncertainty.
- Customization
If your company has multiple departments, electronic time sheets can be customized based on the type of departments operated at your company. You can also customize various fields on the timecard based on hourly vs. salaried employees, the day shift vs the night shift or customization based on other special situations that are specific to your company and the way you run your business. This could include working with sales reps that are paid a salary plus commissions, making adjustments due to returns or other customized issues.
- Reporting
Once information has been recorded in real time, it can be used to generate necessary payroll reports that can be tailored to a variety of factors, such as by employee, by month, payroll period, department or other reports.
- Storing Historical Information
Electronic time sheets make it easier and more convenient to store and track historical data that may become useful at a future time. Most electronic systems can store and retrieve data dated as far back as the recording of the initial entry.
- Efficiency
As indicted above, electronic time sheets can greatly increase the overall level of accuracy and efficiency when recording, processing and reporting payroll.
Stephen Koppekin is the founder and CEO of Koppekin Consulting, Inc.
