Every business must track employee hours or attendance. This vital data helps businesses understand just how much time and money is going into each department. This attendance data for billable hours and tasks ensures timely payroll processing so you can accurately calculate employee paychecks. Tracking employee attendance also allows you to enforce a necessary employee attendance and time-off policy.
In this article, we’ll explore the reasons employers track team attendance, and provide key tips and strategies to streamline your efforts. Read the post in full or click on a link below to jump ahead:
- Why do business owners track employee attendance?
- How to track employee attendance
Why do business owners track employee attendance?
Companies must track employee attendance, especially those who want to scale their business. As you get busier and bigger, you won’t be able to monitor employee attendance as effectively as you would with a small team. Employee attendance records can help business owners and managers:
Gain greater insight into budget and bandwidth needs
You need to know exactly what your employees are spending their time on and how many hours they spend on each project. That way, you’ll know exactly how much you’re spending on certain areas of your business. For example, a marketing company might track their employees’ attendance and time spent on projects or clients. Then they know exactly how much of their budget is being used up, ultimately allowing them to charge the client enough to make a profit.
When you have a mandatory attendance policy, you’ll see fewer employees try to take advantage of their working hours. Tracking attendance allows you to see who is on time every day and who needs to be talked to about getting to work on time. Even salaried employees should have their attendance tracked so you know that no one is taking advantage of your business’s goodwill.
Maintain accurate records
Ultimately, tracking employee attendance helps your business maintain accurate records so you know everyone on staff is getting paid what they’re supposed to and when. This will help you avoid having to pay retroactive pay because your employees’ paychecks will always be accurate and their time will be accounted for.
Tracking attendance can also help you calculate overtime pay so that your employees are getting paid the amount they are legally entitled to. Without this tracking, you can’t verify which employees have worked over 40 hours a week.
How to track employee attendance
There are several ways that businesses can track employee attendance. While all of these are effective, the most efficient way to track your employees will depend on your particular business and its size.
Track employees manually via Excel or Google Sheets
Tracking employees manually with Excel or Google Sheets will allow you to see when your employees come into the office and when they leave. This method of attendance tracking typically works best for small companies that don’t need a more robust solution. Typically, overtime must be approved, so an employee would only have to enter the time they come in and leave each day. They then would enter a biweekly, weekly, or monthly total, depending on when they get paid.
Benefits of spreadsheets
- Easy to use
Using spreadsheets as an attendance tracker is simple. All they require is a very basic understanding of Excel or Google Sheets. There’s basically no learning curve, and you can get started using them immediately. Make sure that all of your employees use the same templates for tracking their time to ensure consistency.
Your bottom line is important, which is why you need to find the cheapest method to track employee attendance while still remaining accurate. Spreadsheets are cheap. In fact, Google Sheets is free, which makes tracking employee time basically free as well.
A CSV timesheet can also be scaled for medium-sized businesses with more complex calculations to keep your tracking system organized.
Disadvantages of spreadsheets
- Time consuming
While you can easily manage attendance sheets as a small business, it can quickly become difficult for your payroll processing staff to deal with so many employee spreadsheets over a long period of time. While a small business can easily manage attendance sheets, it can quickly become difficult for your payroll processing staff to handle so many employee spreadsheets.
While no one in your accounting department intends to make mistakes, having too many spreadsheets to deal with can quickly lead to disorganization. Disorder in an attendance process can lead to problems like lost spreadsheets or missing hazard pay because your accounting department was rushing to get payroll done.
- Devoid of advanced tracking
Because tracking employee attendance this way is a manual process, you’ll lose out on advanced employee tracking. Advanced capabilities can track hours while an employee is clocked in, streamline payroll solutions, or use powerful software to improve workflow and productivity.
Spreadsheets also can easily be manipulated if they fall into the wrong hands. Your employee attendance system should be uneditable or at least keep track of edits over time. Any changes should be traceable so that it’s difficult for anyone to falsify time records.
Require employees to use punch cards
Time clocks allow employees to use punch cards so businesses have uneditable records of when employees clock in and out. Using punch cards as attendance reports, business owners and managers know when employees are working and when they aren’t so you can catch attendance issues.
Advantages of punch cards
- Track attendance at a basic level
Similar to spreadsheets, punch cards show you when your employees are working, not working, or on break so you can keep accurate attendance records.
The most significant advantage that punch cards have over spreadsheets is that they cannot be edited. When punch cards are put through a time clock, they are permanently stamped, so employees can’t make changes without going to their manager.
Disadvantages of punch cards
Unfortunately, punch cards have all the same disadvantages as spreadsheets because they only track attendance and nothing else. They are still a manual process, which means there’s tons of room for human error.
- Room for error
Employees may forget to punch in and out of work, which causes more work for your human resources or accounting department. This is valuable time that they could be using to help you scale your business.
- Don’t ensure accuracy
Punch cards also don’t guarantee that employees are actually on-premise or working. Someone can come into work, punch their card, and then leave. They also might not clock out for lunch. There are a number of ways that punch cards can be used to mislead you into paying employees for times they weren’t working.
Use employee time-tracking software
Employee time-tracking software is the easiest way to track employees’ attendance because it isn’t a manual process. Employees still have to clock in and out with an easy-to-use button through a mobile app. However, the software allows you to better understand your employees and streamline your payroll process.
Benefits of employee time-tracking software
- Spot unauthorized breaks
An attendance-tracking system allows you to see where your employees are. With GPS, you can determine whether your employees are in the building when they say they are. You can also see when an employee takes a lunch break that’s too long or makes a stop when running an errand for the company.
- Prevent time theft
The other methods discussed here can’t prevent time theft unless you have someone who walks around the business, making sure all employees are there. Time theft is when employees are on the clock but not actually working. This means that someone might not clock out for their break, or they might come into work, clock in, and leave to run errands. With employee attendance management software, you know what your employees are working on and where they are.
- Avoid expensive overtime costs
With employee attendance-tracking software, you can better track employee overtime so you aren’t overpaying employees for remaining on the clock when they aren’t actually working. Instead, you can track the projects that your employees are working on and when, enabling you to avoid overtime and increase overall productivity.
- View attendance in real time
Employee attendance-tracking software allows you to see metrics of your employees at any point during the day. This means you can see who is clocked in at any time of day in real time. You can use this feature to do random check-ins to ensure your employees are working when they say they are.
- Integrate with payroll systems
One of the most significant benefits of time-tracking software is that it integrates with your payroll system. This means you can make sure your employees are getting the exact amount of money they’re owed on time. And, instead of manually entering employee time from spreadsheets or punch cards, your payroll department can integrate and automate all the data needed to create accurate paychecks.
Attendance management is crucial for your business because you need to make sure that your employees are efficient and productive. While there are many options out there for tracking employee attendance, only time-tracking software allows you to streamline your payroll process for more accurate paychecks.
QuickBooks Time makes it easy for business owners and managers who already use QuickBooks to streamline their accounting and payroll processes, resulting in accurate records.
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