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Tips for Reducing Payroll Expenses

No matter the industry, a company's single greatest expense is payroll. What is the best way to track that expense and make sure there aren't areas needing improvement? Handwritten time sheets or punch card clocks are time consuming and error-prone, not to mention highly susceptible to outright time theft with "buddy punching", where an employee will punch their friend's time card either in earlier or out later than what that employee actually worked. Time and attendance software will track employee time, set up accounting rules governing how time is accounted, and generate reports so you can see where payroll is spent and spot any potential problems. When deciding on time and attendance software, the most important feature to look for is the ability to integrate with your payroll system. It should also automatically calculate regular hours with overtime, holiday, vacation, and sick time while factoring in any requirements and limits on overtime. If the software can't automate all of the collection and calculations, you'll still end up doing a lot of manual entry, which wastes time and leaves you more vulnerable to mistakes. Time and attendance software can work with electronic time clocks that automatically upload the time punches. There are several different kinds of automated time clocks, the most basic being the keypad clock. Employees have unique codes that they enter on the keypad to clock in and out. This system is the least expensive but typing in a code is slow and susceptible to errors. There are time clocks with an integrated barcode or magstripe or RFID reader that use employee badges to track time, which are faster and easier to use. However "buddy punching" is not completely eliminated with any of these options as the employee code or badge can still be shared with other employees. The greatest level of security is achieved with a biometric time clock. Instead of a badge, a unique physical characteristic of the employee is used for identification, such as a fingerprint, palm print, or iris. Biometric clocks are more expensive than other clocks, but they don't require the purchase of badges for new employees or replacement of lost or damaged badges. Also, biometric time clocks are the only clocks to completely eliminate "buddy punching", which can save up to 4% on annual payroll expenses, according to a study by the APA (American Payroll Association). System ID has a Time and Attendance white paper that goes into detail explaining the pros and cons of the different time clocks and the main features to look for in time and attendance software.