A report by Harvard Business Review shows that failure to track employee hours cost the US economy approximately $7.4 billion per day.

In many organizations, the cost of labor is the highest expenditure. This makes labor management one of the critical roles that every organization must be keen on.

Labor management goes hand in hand with time management. For organizations with a large number of hourly employees, how well they keep track of time can make or break their operations.

Timely data for employee hours allow organizations to provide accurate payroll for their workers.

Unfortunately, for business managers and owners, day-to-day management roles hinder their ability to keep tabs with when an employee reports to work, takes a break, or leaves after work. Adopting the best time tracking practices will allow not only improved productivity in your organization but will also keep you out of legal and compliance issues.

If you’ve ever underestimated the importance of tracking your employee hours, you need to revisit the case of Moran v. Al Basit LLC.

Here is a checklist of the best time tracking practices you should always observe.

1. Record the Exact Time

You need to have a system that streamlines the hours capturing process. One of the mistakes many employers make is allowing room for hours estimation.

Whether automated or manual, the system should be consistent to allow easy approval of working hours and processing of correct payroll.

Allowing your employees to estimate will most likely lead to exaggerated employee hours, which will lead to the high cost of operations.

One way of ensuring accurate, timely data is by introducing an automated system. Such a system will streamline record keeping for all employees, thus reducing the chances of errors.

Most importantly, such a system will keep you away from litigation related to noncompliance with labor laws.

2. Make Time Tracking Policies Clear

Are your time and attendance policies up-to-date? Do they solve your worktime challenges? What action do they recommend for tardiness and absenteeism?

These are crucial questions you need to ask yourself as you review the policies.

You also need to ensure that these policies are communicated clearly to the employees. You can achieve this by highlighting them verbally during meetings and in writing through employees’ manual.

The best approach to this matter is ensuring that every employee understands the policies right from the day they join your organization. Have them sign an acknowledgment that they’ll follow the policies always.

3. Record in Real-Time

For both employees and employers, tracking time is one of the least favorite tasks.

As a result, there might be some tendency to record the employee hours days or weeks later. Doing so will not only leave you with wrong figures due to bad memory but could land you in problems with the law.

You don’t want to get into court battles with your employees over contested hours.

4. Use a Mobile Attendance System

Most likely, your employees will work away from the office on some days. How then do you track their hours?

A mobile attendance system is the solution you need. Such a system is connected to the payroll system for quick and accurate processing of data.

Such systems are made possible by GPS technology, which allows employers to track the movement of the employees.

This kind of tracking should be done legally through company phones.

5. Use a Tracking System That Integrates With Other Business Applications

When investing in a time tracking system, you need to look beyond time. Think of how your system can simplify other operations such as payroll generation.

There should be a seamless integration of data within your entire business management system.

Remember, as an employer, it is your mandate to file important tax documents, such as w2 form, on behalf of your employees. You will want to avoid using manual processes to generate such documents.

w2 generator would come in handy in such circumstances.

6. Host Your System in the Cloud

It’s no secret that most businesses today are looking for cost-effective solutions. This trend has seen many organizations ditch the expensive hardware equipment for less costly cloud solutions. Time tracking operations are no different in this shift.

In 2020, the HR teams no longer have to pore through clock-in systems to prepare payroll. Manual processes only drain retargets and valuable time.

A cloud-based time tracking system will integrate with your payroll processing system.

In addition, such a system can be customized to track details such as paid holidays and differentiating between hourly and salaried employees.

Also, with a cloud system, the data collected will be accurate, and employees won’t need to countercheck every detail on their paycheck.

7. Use Spreadsheet

For companies with a small staff, cloud time tracking systems might not be a prudent investment. For them, entering hours in a spreadsheet is the best decision.

Why is the spreadsheet still considered one of the best time tracking options?

One, you’ve to consider that excel is free. You can download free templates or customize your own timesheets. By taking this decision, you eliminate the need to purchase costly software.

The ease of use is also another advantage of the Spreadsheet. All the employees need to do is enter the in-time and out-time, and the excel formulas will do the computation for payroll. Obviously, this is a better option as compared to paperwork.

We also can’t forget that there is no cost of training employees to use excel timesheets.

8. Don’t Lose Trust

It’s normal for employees to feel that time tracking systems are a “I’m watching you” warning. Sometimes it’s not. All you want as an employer is to keep time data for payroll purposes.

You need to put it clear to your employees during meetings why time tracking is necessary. Once they understand the intention is not to intimidate them, you can expect them to embrace your plan to make the system as accurate as possible.


Streamline Employee Hours With a Centralized Tracking System

With proper mobile, cloud, or desktop time tracking systems, you should be able to collect accurate employee hours for payroll and compliance purposes.

A good system should allow you to prepare payroll that will go towards filing accurate tax documents with the IRS.

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