The Payroll Time Clock Advantage
Some companies think the money a payroll time clock (or several) costs is too much for their business to afford. Sound like your company? You’d better think again. If your company has more than 20 employees, and you have not automated your time and attendance system, you are losing a lot of money.
Accuracy/Lost Time Savings: Several studies show that the cost savings from increased accuracy can easily pay for the time and attendance program.
The American Payroll Association says a typical company will be 92% – 99% accurate in their keying in payroll data. Even assuming a conservative 99% accuracy rate will result in significant savings. Consider the hypothetical example of Company A:
*Number of timed employees 100
*Payroll per pay period (weekly) $48,000
*Annual payroll (hourly employees) $2,496,000
*Annual Accuracy Savings 1% $24,960
Robert Half and Associates and American Payroll Association report that an average of 3 hours and 51 minutes of time is lost per week due to long lunches, long breaks, early punch/late departures, etc. Assuming the hypothetical Company A is only losing a 5 minutes per day in lost time the following payroll time clock savings would be realized:
*Lost productivity per day 5 minutes
*Average employee’s rate/hour $8.00
*Average wages overpaid daily per employee $.67
*Total number of employees (Hourly) 100
*Total wages overpaid weekly $335
*Annual Lost Time Savings $17,420
Overtime can also be an issue. When time is not being tracked as efficiently as possible, overtime may occur when it shouldn’t and can cause profit leaks to exist. Because overtime is paid at 1 AÃ¯Â¿Â½ times the hourly rate of each employee, the following estimate shows the impact when the amount is reduced. Assuming overtime at Company A is at a rate of 2% and that improved controls can reduce this amount by 10%, then the following dollar amount could be recouped:
*Annual payroll $2,496,000
*Add overtime of 2% $49,920
*Amount saved with 10% overtime recapture $49,920
Payroll time clock implementation would result in Company A saving $92,300 even using conservative estimates. By plugging numbers into the above formulas, you can see how much savings you may be able to realize.
Types of Time and Attendance Hardware:
*PC/Employee Time and Attendance Software
*Biometric Time and Attendance Hardware
By exploring the best options available for your company’s situation, you will be in a position to save your company real money.…