Employees are the greatest asset in any business and every company has the common need to figure out how to management their team’s pay rate, career growth, time, and attendance. These four management requirements are the focus of how an organization grows their revenue, product and services offered, and expands within their chosen market. Whether a business is local or global, brick and mortar or internet based, and small or large, it is necessary to compensate employees accurately and timely. The recommended path to successfully paying your team to continue working on behalf of your business interests is an efficient time and attendance system.
Exempt and Non-Exempt
Employee pay rates are regulated by government standards based on the kind of work they do and whether they are paid by the hour or a standard monthly amount that is not determined by the number of hours they spend completing their work. Exempt employees are salaried and therefore receive a standard amount of money as long as the tasks are completed according to schedule and are not entitled to receive overtime pay. Most job opportunities are Non-exempt positions that are paid according to the rate per hours worked and are subject to paying (on average) one and a half times the hourly rate to employees working over 40 hours a week. An effective time and attendance system will allow organizations to track the time and attendance of both Exempt and Non-exempt employees.
The primary purpose of any time and attendance tracking system is to provide a clear and comprehensive review of how much of the company’s revenue is allocated to payroll. Since this is the highest expense within your company, competent operational managers will need to justify payroll increases and decreases. When organizations pay more for staff time, managers need to analyze whether spending more money on employees is resulting in a revenue increase. In contrast, when organizations spend less than usual on paying employees, managers need to make sure that the savings are real and not resulting in a correlating profit loss.
Businesses run by assigning traceable and allowable costs within the organization to specific accounting categories. Tracking the amount of time spent on various efforts within the organization is paramount to knowing how you are spending on budget line items. Your accounting team bills employee time according to the number of hours spent on the effort related to the identified cost center, project, account, or client. The best way to track and report on your billing records is through a time keeping system which allows employees to let their managers know which accounting category to pay them from.
Accurately paying team members is not an easy task for any size business no matter the product or service offered. According to The American Payroll Association, 60% of its responding members do not have fully automated payroll systems and in the US alone one third of employed workers are forced to pay their bills late due to payroll errors. Payroll mistakes are linked to poor performance in that employees lose faith in organizations who do not pay them what they have earned and are promised. Something that is seemingly a small issue or glitch can easily lead up to a bigger relationship problem between employers and employees.
An ideal time and attendance system will allow managers to produce reports of various query types to analyze what budget adjustments are necessary. A great automated reporting tool has unique filters that permit the creation and viewing of custom reports. Some queries will be based on the billing types within an organization while others may be based on employee names. Whatever the strategic need, the best time and attendance system for your business will offer comprehensive reporting tools that are easy to use.
It is difficult to adhere to government requirements surrounding employee tax reporting without the implementation of a payroll system that produces the necessary data. Government oversight is unforgiving of companies reporting inaccurate tax information and leverage a high rate of fines each year for compliance violations. The automated system managing the payroll data should integrate with your accounting platform to produce these records timely.
There’s nothing like a time and attendance system that employees can access no matter where they go. While choosing a system is daunting, the most effective will allow your employees to clock in and out from any location and therefore must be cloud based. Internet based time and attendance tracking systems aren’t just great for staff but also enables managers to review data as well. The agility and convenience of 24/7 and mobile access is invaluable to business operations.
Projects fall behind when not properly managed and it is difficult enough tracking one project that has multiple stakeholders. It is much more complicated to track multiple projects with several stakeholders and time and attendance tracking tools that are project specific help Project Managers know which team members are completing tasks promptly. Without a way to accurately track the completion of tasks in real time, it is almost impossible to find the exact reason projects are not being completed on time, task, and budget.
Market surveys have found that seven to ten years is the average lifespan of an organization’s time and attendance system. However, any business can experience drastic changes for many reasons within that time frame. Operational instincts drive business managers to hire people, equipment, and systems that meet the bare minimum needs at the lowest costs, but once a business hits a growth spurt, that strategy can actually hinder the ability to keep up with client and market demand. Migrating to a new system is extremely disruptive and it is better to have one that can easily accommodate your business needs to scale. Spending valuable time evaluating and reviewing available systems now is a sure way to avoid many hours of frustration and wasting finances in the future.
Abstract: Selecting a great time and attendance system for your business can be overwhelming. This article talks about the features a great automated system will have that meets your company’s needs.