Automatic Timekeeping: Separating Fact and Fiction

With all the information (and misinformation) out there, it’s no wonder you might hesitate switching from handwritten timecards. You’re not just looking for something different; you need something better. Are portable electronic timekeeping systems really better? Let’s answer that question by talking about the facts.

Everyone seems to have an opinion about electronic timekeeping systems. On the one hand, there are those who think they’re the greatest thing since the cell phone. And you must admit, a system that tracks labor as it happens and talks directly with your accounting software does sound appealing-but then the guys from the other camp chime in.

They insist that when it comes to tracking worker time and attendance, there is nothing as reliable as good old-fashioned handwritten timecards. Plus the automatic systems are too expensive, too complicated and (here’s the point they’re most vocal about) you won’t be able to convince your workers to use them.

With all the information (and misinformation) out there, it’s no wonder you might hesitate switching from handwritten timecards. You’re not just looking for something different; you need something better. Are portable electronic timekeeping systems really better? Let’s answer that question by talking about the facts.

FACT: Your Guys Will Use Them

You might expect an uproar when you introduce an electronic timekeeping system, but chances are you’ll get a mixed response. Some guys will see the time savings and welcome them right away, and others will resist. My experience is that the “resisters” simply need to be won over.

Remember no one likes handwritten timecards—not your workers who have to fill them out every week, not the foremen who usually are responsible for bringing them back to the office and certainly not your bookkeeper who must decipher them and then key in the hours by hand.

Clocking in and out on the device should be a no-brainer for your workers—much easier than having to sit and fill in a timesheet at the end of the week, even though they really don’t remember many of the details. (Those details are what make or break profit margins every month.)

And your bookkeeper will have accurate, easy-to-read time and attendance reports instead of another stack of handwritten timecards that must be manually entered. The best systems also interface with accounting/payroll packages such as QuickBooks, Master Builder, American Contractor, Peachtree, Timberline and ADP.

FACT: Handwritten Timecards Cost You Money

Lots of it, but you may not notice because you have gotten used to it.  That’s because when timecards that are filled in at the end of the day—or the end of the week—workers must rely on their own memories to report their hours. And what happens if they simply don’t remember? There is no choice but to give it their best guess. Think timecard “fudging” and “rounding” isn’t a big deal? Think again. Just five minutes of lost time in the morning and five in the afternoon add up to five days a year.

That’s one week of paid vacation on your dime—and no one’s thanking you for it.

By tracking labor as it happens, electronic timekeeping systems eliminate “time rounding”—and boost your bottom line.

FACT: The Learning Curve is Smaller Than You May Think

Sure there’s a learning curve, and you need to plan for that. But it’s not as steep as you might think, and the potential rewards make it well worth the effort. The few hours spent getting your system up and running will save you thousands of dollars every year.

The best systems now are made for construction and make the transition easier by offering comprehensive support and training options, leveraging the power of the Internet through interactive webinars and online “training.”

A recent poll of bookkeepers new to electronic timekeeping systems found that it took them an average of three pay periods to get up to speed.

After a couple of weeks, most businesses saw a significant decrease in payroll processing time, one that they maintained with long-term use of the system. So a couple of weeks of extra work means less work every week afterward—well worth the time it took to set up.

FACT: Electronic Timekeeping Systems are Now Very Reliable

How long was your lunch last Thursday? If you don’t remember how long yours lasted, chances are your workers don’t remember how long theirs did either.

Yet studies show that most workers fill in their handwritten timecards for the week on the day that they’re due.

This means they must recreate their entire work week from memory in order to get paid. If nailing down how long Thursday’s lunch lasted was tough, try remembering a week’s worth of attendance times.

The truth is, electronic timekeeping systems are about as close to 100 percent% reliable as you can get. Think about it-you’re trading in handwritten attendance times scrawled on paper for digital timestamps that are stored on a rugged device. Most systems store years of records and offer an array of offsite back-up plans that meet legal requirements for recordkeeping.

The best systems also include robust time and attendance management software that enables you to review employee and jobsite information-and make important business decisions based on this data.

FACT: Electronic Timekeeping Systems Pay for Themselves Quickly

According to a recent survey, for most businesses, switching from paper timecards to a good electronic timekeeping system usually pays for itself in sixty to ninety days. I’ve spoken with some construction businesses who report it was as short as three weeks!

That’s because once labor is tracked accurately, payroll expenses tend to go down, often dramatically. In fact, it’s not uncommon for new users to see a 20 to 50 percent decrease in overtime expenses within the first month.

What to Look for in a New System

When you separate fact from fiction, a portable electronic timekeeping system is clearly the way to go. They’re accurate, reliable, easy-to-use and streamline payroll. Most importantly, a good one will boost your profits. But what system is right for you? Here are a few important things to look for when considering one:

1. It must work the way you do.
You’ve already made the commitment to change the way you track time and attendance by getting rid of handwritten timecards. That’s a pretty big step. What you don’t need is an electronic timekeeping system that requires you to make other fundamental changes in the way you run your business.

If you have workers from different cultures and countries, a system that assumes everyone who uses it speaks English isn’t going to work for you. If you use cost codes to track types of labor, a system that just records in and out times will not meet your needs. And a system that assumes your foreman is the first one onsite and the last one to leave won’t cut it either if that’s not how things operate in your world.

You should not have to adapt your business to a new timekeeping system. The system should be designed to meet the needs of your business.

2. It must be accurate.
This one is as important as it is obvious. One of the main reasons to get rid of handwritten timecards is the fact that they’re inaccurate. There’s no point in replacing them with a system that’s just slightly more accurate. I wouldn’t even recommend a system that’s significantly more accurate than handwritten timecards. What you should look for, and what your new system should provide, is 100 percent accuracy. Not “mostly accurate” or “pretty close.” You need a system that’s dead-on, bull’s-eye accurate every single time.

3. It must be easy to use.
Clocking in and out on your new system should be a no-brainer. If it’s harder for your workers to use than filling in handwritten timecards, you’ve got a problem. Your guys have enough on their minds just getting their jobs done. What they don’t need is a timekeeping system that’s complicated and confusing. It should take no more than a few minutes to train your guys on how to use the new system.

4. It must be durable.
And by durable, I mean able to withstand the day-to-day rigors of the construction jobsite. An indoor timeclock dressed up to look tough isn’t going to cut it because sooner or later, someone’s going to spill a soda on it. Or drop it on concrete-100 times. And what if it rains or snows?

You need a timeclock that you can strap to a 4×4 and forget about. One that can withstand Minnesota winters and Arizona summers and everything in between.

5. It must come with good tech support.
This one is often overlooked, but it’s critical. That’s because you’ve got  workers to pay, and if there’s an issue, you need a plan designed to resolve it quickly. Before purchasing a new system, make sure that it features a solid support plan. Check to see what hours (and days) live phone support is available. The best support plans also include online chat support and an online knowledge base that you can access 24/7.There you have it—some of the facts about electronic timekeeping and a short checklist of what you should look for in a new attendance system. Every year more and more companies are switching to automatic timekeeping because the cost of not switching is so high. If you are looking for a straightforward way to increase your profits, getting rid of handwritten timecards is a great place to start.

Construction Business Owner, July 2008