Inaccurate timesheets can result in unnecessary payroll costs and administrative burden, two things small business owners with tight budgets and even tighter schedules simply can’t afford. Some business owners blame their time tracking system for these ongoing mistakes — about 8 percent say their current system is too confusing or unreliable — but 92 percent of business owners speculate user errors (or how the time tracking system is used) are the more likely cause of timesheet errors.
Fortunately, there are a few easy steps business owners can take to ensure employee timesheets are as accurate as possible — no matter what system they use to track time.
Almost half (45 percent) of survey respondents say they use an electronic time tracking system to track employee hours. The other 55 percent rely on physical punch clocks, paper timesheets, spreadsheets, or word of mouth to track hours. But how do these systems stack up in terms of timesheet errors?
Time theft occurs when an employee pads their timesheet at the beginning or end of their shift — and it costs U.S. business owners over $11 billion each year.
For the majority of small business owners, labor is their biggest line item. Employees cost more than just their hourly wage, and for business owners with tight margins, accurately predicting labor costs can mean the difference between success and failure.
Employees forgetting to clock in or out is a common problem among small business owners — one that creates extra administrative work and can result in costly timesheet errors.
Just over 5 percent of employers require their employees to track time by verbally checking in with a manager. Another 28 percent track time using a paper timesheet or spreadsheet.
Another 2018 QuickBooks Time survey revealed 10 percent of employers admit to removing time from their employees’ timesheets. This act, known as wage theft, costs U.S. employees around $22 billion each year.
Only 14 percent of business owners allow their employees to clock in whenever they start working. The majority (51 percent) require employees to clock in no sooner than five minutes early.
According to the timesheet errors survey, only 9 percent of business owners can say they never have problems with timesheet errors. Some 40 percent deal with timesheet errors at least once a week — and 13 percent say they struggle with errors at least once per day.
Is their time tracking system to blame? Some employers (about 8 percent) think so, saying their current system is confusing or unreliable. But the majority say user errors are more likely the case. When asked about the most common cause of timesheet errors, 34 percent of business owners agree that employees forgetting to clock in or out or record their hours is the biggest problem. Employees not recording time to the correct job or task came in at number two.
Here’s where it gets surprising: Over 15 percent of business owners claim that most of their timesheet errors stem from employees or managers failing to review their timesheets before they submit them for payroll.
Brooklyn Daron, a Learning and Development Specialist at QuickBooks Time, says a significant portion of customer service calls she fields could be avoided if employees would review their time before hitting “submit.”
“It’s so much harder to fix a timesheet error once it’s been submitted for payroll,” Daron says. “It takes just a few seconds to make sure the timesheet is correct and spot any potential errors before submitting. It gets a lot more complicated once it’s been entered into the payroll system. It’s a lot of unnecessary cleanup for the administrator — and we know they don’t have time for that.”
According to the survey, only 21 percent of small business owners require employees to check their timesheets before they’re submitted for payroll, while 15 percent require both the employee and their manager and/or payroll/HR rep to take a look.
That leaves 59 percent — the majority of small business owners — who do not require employees to review their timesheets. This might be a big reason why 66 percent of business owners report dealing with timesheet errors between once a month and multiple times per day.
Dealing with timesheet errors is just one of the many hassles small business owners deal with all the time. But there are a few things business owners can do to reduce the frequency of timesheet errors.
“Business owners can pretty easily get inundated with timesheet editing requests,” says Daron. “Consider recruiting the help of a trusted manager or supervisor to avoid becoming overwhelmed.”