Accuchex Blog

Why Time and Attendance Is Important for Your Business

Posted by Tristan Ruhland on Sep 9, 2014 9:33:15 AM

Time and Attendance Novato CaliforniaThe single largest expense category for most small business owners is labor. Typically accounting for between 30-50% of the total cost of operation, control of your payroll costs is a significant determining factor for whether or not your business will succeed.  Proper handling of time and attendance records is necessary to give an accurate picture of your labor costs and the overall health of your company. 

What makes time and attendance accounting so important?

Overpaying And Underpaying

In the early days of a business it's easy to take a relaxed approach to labor hours, after all, you're working in the trenches with your employees to get the company off the ground, so time and attendance are taken for granted.  However, as the business grows, lax labor accounting leads to serious issues of over and under payment of your employees. 

For example:  Sam is a friend that you hired to work the sales counter in your store.  He's scheduled to work 40 hours a week, but each of his shifts he arrives 5 to 10 minutes late, and his half hour lunch break typically runs 35 minutes.  You let it slide, and still pay him for his full 40 hours, because you aren't using any method to track time and attendance.  In this example you wind up overpaying Sam for more than 2 hours of labor that he did not provide each week.  At the Federal minimum wage that's nearly $15 a week, or $754 a year.  While this may not seem like much, those numbers begin to add up quickly, especially when you have three or four employees doing the same thing. 

The opposite also holds true.  Instead of arriving late each day, Sam comes in early or stays late to help get the store open and closed.  Without proper time and attendance accounting you will have underpaid Sam for several hours of labor for the week, but more importantly, you underpaid on overtime hours.  Should Sam decide to make a complaint to the Department of Labor, your company will be in serious trouble.

Employee Morale

There will always be workers who arrive late or leave early, but the majority of the people that you hire will be good workers who respect your schedule and show up when they are supposed to.  The problem is that when you don't use time and attendance accounting to monitor employee hours, the employees who arrive on time will resent those who arrive late, and eventually they will get fed up and quit.  At that point, you not only have to pay to hire new employees, but you will have lost someone who has demonstrated loyalty to your company.

Employees who are doing their job by clocking in and out on time are the ones that have to pick up the slack for workers who are late or absent.  With the right time and attendance monitoring system you have some idea about which employees are causing an undue burden on the rest of your staff and fix the situation before employee morale falls too far.

Time and attendance accounting are vital to giving you an accurate picture of your labor costs.  The use of a third-party human resources services company can give you all of the time and attendance support that you need to ensure you pay for all of the hours worked, and help you identify potential problem employees.


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