Prevent Payroll Errors with Precise Time Tracking

Let's face it...

Running a small business is no picnic.

On top of everything else you have to do (marketing, customer service, hiring, onboarding, etc.), accurately tracking your employees' time can drain your resources.

Depending on what type of business you own:

• Home and repair
• Medical office
• Cleaning service
• Construction
• Staffing and others

They require all business owners to do accurate time tracking and scheduling to keep track of employee hours for reporting and, most importantly, payroll.

That's why accurate and hourly time tracking is so important

It's not just about saving money, it's about reducing stress, improving employee turnover, and setting the stage for a more efficient and successful business.

So, buckle up as we uncover the benefits of accurate time tracking for your business.

Manual time tracking = higher costs

Manual time tracking using paper timesheets, digital spreadsheets, or physical time cards may seem like a traditional approach. However, the hidden costs associated with these methods can be significant.

Employees are responsible for filling out or punching in to record their hours worked, resulting in a time-consuming and error-prone process.

According to Software Advice, 43% of employees exaggerate when reporting their hours worked, meaning you, as an employer, are paying for time they didn't work.

Even if manual time tracking works well for your business, these problems can arise intentionally or unintentionally and result in a significant loss of resources.

Buddy punching is a drain on resources

Buddy punching, a subtype of time theft, occurs when employees intentionally manipulate time clocks for personal gain.

This type of employee time theft can result in significant financial losses for all small businesses. Buddy punching and employee time theft are very common in small businesses. Research from PPM Express and Software Advice shows that 4 out of 5 small businesses are affected by it.

What's more, 56% of small business owners say they find errors more than 25% of the time when reviewing their employees' timesheets.

To put this into a macro perspective, according to Workforce Hub, buddy punching costs U.S. employers $373 million annually.

Now imagine how this could impact your small business.

Payroll Errors Lead to Costly Mistakes

Manual data entry for payroll often leads to errors: nearly 33% of employers make payroll errors due to this outdated method.

These errors, whether in employee timesheets or data entry, can cost companies 1-8% of their payroll.

For a small business with 10 employees making an average of $50,000 per year, payroll errors can result in losses of between $5,000 and $40,000 per year.

Time Tracking Errors and the Impact on Small Businesses

Recent statistics highlight the severe impact of incorrect payroll on small businesses:

• 40% of small businesses pay an average of $845 in IRS penalties annually due to incorrect payroll (American Payroll Association).
• 33% of employers make payroll errors, resulting in billions of dollars in losses annually (IRS).
• 1 in 5 employees are involved in time theft, costing companies up to 7% of their annual gross payroll (Software Advice).

Upgrade to mobile time tracking software for better time and attendance tracking

A real game changer is switching to modern time tracking solutions (like IceHrm) that offer all the benefits in one for small businesses:

• Elimination of "buddy punching": Time tracking solutions often include features like employee photos and geofencing that ensure entries and exits are genuine, minimizing the occurrence of "buddy punching."
• Reduction of payroll errors: Automated time tracking apps centralize hours and make payroll easier, significantly reducing the likelihood of errors in manual data entry.
• Environmental and cost savings: By adopting digital document management systems such as time tracking apps, businesses can help protect the environment by reducing paper usage, saving ink, and minimizing the need for physical printers.
• Ensure compliance: Compliance with labor laws is critical for businesses. Time tracking solutions help accurately track employee work hours, supporting compliance with local, state, and federal regulations.
• Automate tasks: Time tracking solutions often offer features to automate repetitive tasks, from scheduling to payroll, to streamline operations and save time and money.

IceHrm recommendations:

1. Choose an automated time tracking solution: Opt for time tracking software that is automated and integrates seamlessly with other business functions.
2. Track hours daily: Make time tracking a daily practice to ensure more accurate entries and better compliance.
3. Maintain consistency: Have consistent time tracking policies and systems for all employees.
4. Clear instructions: Provide clear and concise instructions to employees to ensure a smooth rollout of the new time tracking system.
5. Ease for employees: Choose a user-friendly time tracking solution that simplifies the process for employees and encourages widespread adoption.

In short, the benefits of accurate time tracking extend far beyond managing payroll. When companies understand the hidden costs associated with manual methods, they can wisely choose modern time tracking solutions.

Not only do these solutions reduce costs, but they also pave the way to a more efficient, compliant, and environmentally conscious company.

As you begin a new year of running your small business, take a moment to appreciate the transformative impact of accurate time tracking. It's not just a tool, it's an investment in the future success of your business.

Accurate time tracking is crucial for reducing payroll errors, preventing time theft, and ensuring compliance. IceHrm's automated time tracking solutions help small businesses streamline operations and enhance efficiency. Invest in precise time tracking to secure your business's future success.