![]() ![]() For others, the money they save upfront by not paying for a time clock isn’t going to be worth the hassle and frustration down the line.Īnd for those companies, we also discuss Buddy Punch. Note: Some free time clock software will offer these advanced features, but only on their paid plans.įor some companies, this lack of functionalities won’t be a big deal. Don’t have ready-to-go customer service support teams who can help you troubleshoot any questions as they arise.Aren’t the best solution if you’re managing multiple job sites or need different job codes.Don’t make it easy for you to run payroll.Don’t necessarily help keep employees accountable with advanced clock in and clock-out measures (such as having employees submit a photo when they clock in and out or making sure they’re at the right location).When we add all extra costs to the running tab of wasteful payroll costs, you can start to understand just how much a time clock for your small business can ease your cash flow and save you money.Ĭheck out our Blog for more information on how Time and Attendance terminals can help improve your business.In this post, we look at 5 free online time clock software tools, including:īut we also discuss the limits of using a free online time clock. Then there’s the cost of low employee morale and tension between employees and owners when workers don’t get their due pay. While you labor under the high payroll error rates inherent in manual and punch-card time keeping, you will have to invest more admin time correcting those errors (the APA estimates 10.5% of all payroll processing time is spent resolving errors). They’ll certainly let you know when they’ve been underpaid. Last line of admin and employee morale costsĮmployees may or may not let you know when they’ve been overpaid. That works out to 40 wasted effort hours for our fast food franchisee. It also determined that companies typically spend 100 wasted effort hours on manual payroll per every 25 FTEs. Research by the APA has found that it takes five to six minutes to total and audit each punch card, so that’s an hour of somebody’s day every day. In addition to the inevitable data entry errors, your small business is also paying in admin time to process payroll and to correct payroll errors. You think there aren’t any errors being made during this time process? Of course there are! Somebody still has to review the physical time card, assess its accuracy and enter the data into your payroll system. That’s what you’re thinking, right? It doesn’t matter. (You can learn more about how to select a durable time clock here.) But your restaurant uses punch cards – not manual time sheets! You can purchase the best time clock for your small business for well under $5000 and should be an investment you only need to make once every 10 years if you select the right one. With a 3% error rate, this restaurant is overpaying $217 per pay period. The total payroll for the 10 FTEs for one pay period at full capacity is $7233.60 (80 FTE hours / day * 11 days in the pay period * $8.22 per hour). Now we’ll be generous and work out the costs of clerical errors at 3% of total payroll, fairly middling between the APA’s one to eight percent. Since many fast food employees work part-time, let’s say the restaurant has the payroll equivalent of 10 full-time employees (FTEs) for a daily work hours total of 80 hours (10 FTEs * 8 hours). The average fast food restaurant has 15 employees at a median pay of $8.22 per hour. Let’s work that out for a typical fast food franchise owner. Calculating the cost of payroll clerical errorsĪccording to the American Payroll Association, clerical errors cost an average of anywhere from one to eight percent of total payroll. (For more in-depth information on minimizing employee absenteeism, check out our free Attendance Policy guide). A time clock tracks work time down to the minute, which means using a time clock for a small business saves money by not overpaying for time not worked. Often, employees don’t mean to steal time, but having to backfill a time sheet takes time and inevitably includes errors. A time clock eliminates time theft in the form of over-reporting hours worked. The result of having more accurate attendance data is having more accurate payroll. The truth is that the ROI on the one-time investment in a quality time clock will improve a small business’s cash flow.īy automating your time and attendance data collection, you’ll get more accurate employee attendance data. It’s no wonder that owners may hesitate about spending money on a time clock for their small business. Indeed, 82% of small businesses that fail do so because of poor cash flow. Every small business owner knows the stress of meeting payroll and paying vendors. ![]()
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