Choosing a Time and Attendance System: 2015 Guide

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While you might see your employees every day, logging their hours each week can be a tremendous undertaking. You must know when workers clock in and out, add up the number of hours they work, determine how much paid time off they've taken and how much they have left.  

Instead of spending countless hours performing all of those calculations manually, many businesses are moving to digital time and attendance systems that automatically track and compute the data.

"A true time and attendance system tracks employee hours worked in real time from virtually anywhere, and automatically manages paid time off, vacation and time sheet approvals," Matt Rissell, CEO of TSheets Time Tracking, told Business News Daily.

Ready to choose a time and attendance system? Here's a breakdown of our complete coverage:

• Roundup: The Best Time and Attendance Systems
• REVIEW: Best for Small Businesses
• REVIEW: Best for Small Offices
• REVIEW: Best for Mobile Workforces

Manual time-tracking methods like punch clocks and paper time sheets are often cumbersome and error-prone when it comes to making sure employees are paid the right amount each month. Today's digital systems rely on a variety of technologies to make the time-collection process much smoother.

"More sophisticated and innovative [time collection] methods have become available in recent years to capture time, including intelligent time clocks, mobile devices, GPS location tracking, magnetic swipe cards, biometrics and touch screens," said Frank Moreno, director of product marketing at Kronos Inc. "In an ideal configuration, information is [then] automatically transferred to a system that enables proper payroll processing."

In addition to logging employee hours each day, time and attendance systems can:

• Manage paid time off.
• Administer employee schedules.
• Monitor overtime expenses.
• Provide detailed reports on labor expenses.
• Integrate with payroll services.
• Track mobile employees via GPS locators.
• Help ensure compliance with federal, state and local labor laws.

 

While time-tracking systems were previously used only by large corporations that could afford the expensive costs, the cloud has made these services much more affordable for small businesses. Since these systems use the Software-as-a-Service (SaaS) model, small businesses doesn't have to worry about the expensive costs of ensuring they have the right computer systems in place to run the software. The cloud model allows businesses to log in from any Internet browser and immediately start using the system. 

Armando Ortega, director of product marketing for time-tracking provider Replicon, said many small businesses are attracted to this style because it can easily be expanded as their operation grows.

"You pay for as much as you use," Ortega said. "If they have more employees, they can just buy more user licenses, and if for some reason there is a need to downsize, you have the flexibility to do that, too."

Jim Wacek, president of the time and attendance division for Insperity, which offers the TimeStar time and attendance system, said cloud-based systems are an additional advantage for businesses that don't want to host the application on their own network.

"Having this system helps reduce costs because companies don't have to purchase and maintain their own servers and IT infrastructure," Wacek said.

While large companies can expect to pay thousands of dollars for an on-premise time and attendance system, cloud-based options are significantly cheaper. Monthly fees can range from as low as $20 a month, to as much as several hundred, depending on the provider you choose and how many employees you have. The only other costs are for any time clocks you purchase. For example, biometric time clocks, which automatically punch employees in and out, can cost anywhere from several hundred to several thousand dollars each. 

Small Business Overall	Very Small Business	Mobile Workforce
stratustime	uAttend	TSheets
Full Review >>	Full Review >>	Full Review >>
Easy to use	Plug and play ready clocks	Numerous punch options
Manages paid time off	Low cost	Mobile app tracks workers locations
Integrates with 60+ payroll services	Quality customer service	14-day free trial

Do I need a time and attendance system?

Any business with one or more hourly employees can benefit from a time and attendance system.

"If you can't accurately track time, how can you predict employee hours, determine your staffing needs, or verify employee time is being spent on the highest priority projects first, avoiding unnecessary overtime?" Rissell asked. "The insight into labor expenses, project costs and overall financial analysis are true benefits to businesses using a quality time and attendance system."

Rissell said there are a number of questions you should ask yourself to determine if a digital time and attendance system is right for your business, including:

• Does your company have hourly employees?
• Do you have a mobile workforce?
• Do your employees work at multiple jobsites or in remote locations?
• Is employee accountability and verification of employee location critical?
• Do you need to know who's working, in real time?
• Do you need to ensure employees are paid accurately for the time they work?
• Have paper time sheets or punch timecards have become too difficult to manage?
• Do you need a way of measuring the productivity of your organization?
• Is accurately measuring the cost of goods or projects a challenge?
• Do you need a way to accurately calculate job-costing and forecasting numbers?
• Do you need a way to ensure overtime, PTO and vacations are calculated correctly, kept in check and paid out properly?

The more questions you answer yes to, the better fit a time and attendance system will be for you, Rissell said.

The features to look for in a time and attendance system

With so many time and attendance systems on the market, it can be difficult to know which one is right for your business. When shopping for a system, experts agree there are a number of things you should look for.

• Keeps accurate time: The best time and attendance systems ensure employers are paying their employees for the actual time they work, not the hours they're scheduled to work. Rissell said even the best employees may be rounding off their times or making unintentional mistakes.
• Tracks all time issues: Make sure you choose a system that takes care of all of your business's scheduling needs, not one that just lets employees punch in and out. Wacek said this includes managing employee schedules and handling all paid-time-off calculations.
• Integrates with programs: Choose a system that integrates with the programs, applications and software, such as HR and payroll programs, that you are already using, Moreno said. 
• Monitors overtime expenses: Make sure the system you select can help you reduce overtime costs. Rissell said setting up overtime alerts can notify you before incurring the cost of overtime pay, and minimize unnecessary or unprofitable overtime hours.
• Cloud-based: Time and attendance systems hosted in the cloud are the easiest to implement and manage and reduce capital and maintenance expenses, Moreno said. 
• Reduces administrative time: Search for a system that's easy to use and allows human resources employees to focus their time on issues that aren't payroll-related, Rissell said.
• Provides real-time information: You want a time and attendance system that provides detailed information in real time, because businesses need labor information when it can be impacted, not after the fact, Moreno said.
• Mobile: Since many employees and managers work outside the office, you want a system that has mobile capabilities so it can be accessed wherever they are, Moreno said.

Benefits of time and attendance systems

A lot more goes into keeping proper time and attendance records than just recording when employees clock in and out each day. From correctly tracking hours logged and paid time off to making sure certain insurance requirements are being met, there are a wide variety of advantages to using time and attendance systems. One of the largest benefits is the added financial insight into your business.

"A time and attendance system is important for businesses because it provides advanced tracking for job-costing and labor distribution," Wacek said. "It also provides enhanced views of the organization's key performance indicators, including hours and wages, employee counts and scheduled/working status."

Time and attendance systems can also be a huge cost-saving tool by providing a detailed look at labor costs and where changes can be made. Wacek said businesses can save as much as 5 percent of their payroll costs by automating their time and attendance system.

"[You can] see time and attendance trends that could be costing you money, so you can control them now and into the future," Moreno added.

These systems also improve employee productivity because it frees some staffers of the time-consuming task of entering each employee's daily hours into the payroll programs. 

"With a time and attendance system, you can manage by exception instead of having to review every timecard," Moreno said. "In a matter of minutes, you can find and correct missed punches, respond to time-off requests, and even access and react to labor data in real time to have a positive effect on your business."

Lower employee frustration is another benefit of automatically tracking time and attendance, Rissell said. That includes hourly employees, managers, payroll staff, human resources professionals and owners.

"Inaccurate and slow payroll, manual and error-prone duplicate entry, and the inability to track performance, labor costs, job-costing and financials is frustrating for everyone within the company," Rissell said.

Small businesses using these systems also praise the benefits they bring. Reeve White, director of marketing for the health care consulting firm Primaris, said the company likes that time and attendance systems allow employees to handle time-related tasks on their own. 

"Employees can quickly track and enter their [own] work time, see how much paid time off they have and submit time-off requests," White said.

Justin Dignam, founder and owner of Big Fish Payroll, said one of the biggest advantages his company gets from using a time and attendance system is that it accurately keeps track of how much time off employees have taken.

"It gives us a consistent, approved time record of all [paid time off] taken, eliminating questions about how much time employees have accrued, and when they may have taken time off," Dignam said.

Deborah Sweeney, CEO of MyCorporation, said such systems are a great tool for assessing insurance requirements.

"Many insurance companies require information about total hours worked by employees," Sweeney said. "Using this software makes obtaining this information simpler."

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