[M52]Make A Million Dollars A Year

When businesses are just starting out, traditional
practice is to use a manual time keeping system to track
employee time. Employee's fill out a paper time sheet, the
payroll administrator confirms the time sheets, cuts the
checks, handles the government paperwork and deductions,
then deals with overtime, vacation, and requests for time
off.

As businesses expand and hire more employees, this manual
system becomes extremely cumbersome. The steps to
automation start out small - a mechanical punch clock and
pre-printed time cards, and perhaps a switch from manual
time keeping to using a spreadsheet.

But even this level of automation requires a large amount
of manual re-keying of data, and as the number of
employees increases, the more demanding and time consuming
the needs are for your time and attendance and payroll
systems. A lot of businesses become "trapped" with a
legacy system, usually composed of several different
parts, perhaps even with expensive custom programming in
the mix.

Processing payroll is a repetitive and aggravating task
which takes up valuable time from administrative personnel
who should be serving your business in more revenue
generating capacities. Even with the automated steps
described above, errors in payroll calculation account for
nearly 10 billion dollars in lawsuits and assessed fees
annually in just the United States. Some estimates claim
that one in four employers make regular payroll errors,
mostly commonly with insurance or withholding deductions.
Others say this estimate is undercounting the problem, and
that it will only get worse as the tax code gets more
arcane.

The single most common cause of payroll errors is human
error. Especially in systems utilizing paper based punch
clocks or manual time cards, human error (as simple as
double entering figures or transposing digits) can be
extremely costly, and cause the need to do entire
correction payroll runs or issue adjustment checks. Most
payroll errors are in the range of 1-8%, and even at 1%,
when multiplied by the number of employees, can add up to
tens of thousands of dollars of lost income.

Error rates get compounded when paper time cards are
smudged, morning coffee gets split on them, employee's
record their time inaccurately or they just "buddy punch"
for each other. Combine this with the time spent verifing
results, and the time spent processing payroll (an average
of 7 minutes per time card per employee), and you'll see
that much of this could be eliminated if you had an
automated payroll processing system with integrated time
and attendance functionality.

In addition to paying for itself in reduced error rates
and saved time, an automated time and attendance and
payroll system can provide your management team with laser
accurate information about which employees are in on time,
and how many man hours (and dollars) are spent on each
portion of a project, an important part of project
management and cost accounting.

Furthermore, if you ever need to perform a labor audit, an
automated system will give you the total hours worked per
employee per day on any project, in real time. Fully
automated systems also help prevent "buddy punching" and
other schemes that employees can use to cover one
another's absenteeism or tardiness. Such systems give you
the real time data needed to efficiently manage your
personnel.

Ultimately, using payroll software with integrated time
and attendance functionality gives you a more efficient
and streamlined set of business practices, which obviously
benefits your bottom line. From a manager's point of
view, these software packages allow you to view attendance
records by employee, dollars spent on each project, as
well as other valuable information about how your company
runs, all from the comfort of a simple web browser.

These systems can also be used to let your employees
perform "self service" of several routine human resource
tasks, such as checking their time sheets, viewing their
own pay stubs, even arranging schedule changes or shift
swaps, all from their web browser at work or at home.

Given the high cost of payroll errors, most automated
payroll and time and attendance solutions will pay for
themselves in under a year by reducing payroll errors and
saving time for staff. If you assume a company with 20
full time employees that average 10 dollars an hour - say
a retail business - a 1% error rate adds up to roughly
$6500 dollars a year, which is almost always much more
then the software costs itself.