The Risk of Using Paper Time Cards & How to Replace Them

It is 2017 and surprisingly, some businesses still rely on paper time sheets for their employees to track the hours they work. There have been many studies that show the risks of using these, but for some reason, some businesses are still doing so. I am here to reiterate how risky it is for your business to use paper time cards, and what you should replace them with. The truth is that there is technology to make the life of HR staff easier, particularly in the area of time and attendance. Your HR staff should be able to focus on more important tasks rather than have to spend hours deciphering time cards and manually entering the data into a software. There are ways to track employee hours without having to do all this. The following are a some of the main risks of using paper timesheets.

Time Theft

This is a real and ongoing issue that companies face every year. Although there is no way to completely eliminate this, there are ways to reduce it. Time theft has a big financial effect on a company’s bottom line. Time theft can happen in many different ways, such as an employee handling personal business while on the clock or having a coworker punch in for them. Because it is so easy to manipulate paper time cards, this is one of the most common ways to “steal” time.

Payroll Errors

Having to rely on paper time cards leaves a lot of room for mistakes. Payroll staff is left to decipher scribbles and figuring out exactly what the employee wrote. Mistakes double when the data has to be entered into the payroll system and time is wasted when you’re forced to enter the same information into multiple locations. When data is entered manually, there is always a chance for error. In fact, the American Payroll Association (APA) estimates a 1%-8% error rate when time and attendance data is entered manually.

Compliance Mistakes

Because the data does not flow automatically into payroll and manual data entry is required, there is more chance for inaccuracies. This does not only affect the employee, it can also affect employers. Payroll errors and inaccuracies can result in audits and penalties or fines with the government. Depending on the location, nature, and industry of your business, you may face numerous requirements related to time and attendance tracking.

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Obviously, there are many more risks for using paper timesheets, but these three should be enough to convince you to upgrade your time tracking process. My recommendation for you is to switch to an automated time and attendance system. An automated time and attendance system can help you keep data safe and secure in the cloud, which leaves less room for inaccuracies, allows your data to flow directly into payroll, and increases efficiency and productivity.

Stay Secure

Once you make the switch, you will no longer have to file all those time sheets and store them away in case of an audit; your automated time and attendance software automatically does this for you. When choosing your provider, make sure they are trustworthy and are available at all times. Normally, your provider will have firewalls, antivirus protection, encryption, and offsite data backup. Check out this blog to learn how Dominion keeps their clients’ payroll data secure.

Stay Compliant

Automated time and attendance systems keep all organizational and administrative operations and procedures on the right track and in line with the FLSA and overtime regulations. Studies show that the most common cause of noncompliance is inaccurate record keeping, which leads to payroll errors. The best way to avoid noncompliance is having an automated and cloud-based time tracking software that will allow you to track time accurately, automate rules around compliance, and provide required time and attendance data in case of any IRS audits. Keep in mind that the Department of Labor can request an audit of your company at any time, so having a cloud-based time tracking solution can ensure that the data collected is available at all times so that you are able to provide the necessary records when requested.

Increase Productivity

With an automated, cloud-based software, your HR department will be able to spend their time completing other tasks without having to worry about time and attendance. It is not uncommon for companies who track time and attendance manually to spend hours running payroll at the end of each pay period. Whether it is only one person doing it or multiple, at the end of the day that time adds up to a lot of productivity hours as a direct expense. Having an automated time and attendance software ensures the data is electronic, which makes it easier to automatically transfer the data to the payroll software. Most automated tracking softwares are integrated with payroll. With Dominion, you are able to have a single-source solution, meaning your hours flow directly into payroll. This will eliminate the need for dual entry between platforms, allowing you to trust that wages are paid accurately.

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