The Best Employee Time Clocks for Small Businesses

Across companies large and small, time clock apps are becoming more and more popular. Thanks to mobile technology, they’ve become a go-to tool for managers and business owners. Together with a stellar team schedule, they give an accurate picture of when and where a team is working, and which tasks are being worked on.

As a small business, your approach to tracking employee time is a huge decision. Looking for help choosing the best employee time clock for your small business?

Here’s our deep dive into all the different time-tracking systems out there.

What is an Employee Time Clock?

An employee time clock is a system used by all types of businesses to track employee time and attendance.

A time clock collects data when employees clock in and clock out, and monitors the time spent completing work tasks. Managers also use time clocks to see which employees are at work and which ones are away. 

What About an Employee Time Clock for a Small Business?

Time clocks are a great way to monitor time use across businesses of all sizes. But when it comes to the needs of a small business, no two businesses have the same goals. Certain time tracking systems will work better than others—what makes sense for a larger corporation won’t be useful or appropriate for a mom-and-pop retail store, for instance.

Maybe valuable time is being wasted through time theft or accidental overtime. Or perhaps your labor costs are being inflated by hundreds of dollars by having your employees clock in at a central location before traveling off-site. Time, as they say, is money. And especially if you run an hourly team, every minute counts.

So what’s the best answer to your small business time tracking needs? Let’s jump in.

The Importance of an Employee Time Clock to Your Team

For both small business owners and employees, it’s hard to deny the advantages of a good employee time clock. Without one, you’ll spend more time making sure you’re paying your team correctly for the hours they work, and you’re more likely to deal with payroll errors, causing frustration, stress and low employee morale.

At first glance, you might worry about a time clock interfering with the process of building goodwill at a small company. But the myth that punching a time clock suggests a lack of trust between employers and employees is just that—a myth. By introducing time tracking software to your team in a positive light at the start, your employees will see that it’s not about control but about fairness and saving time—something that will make their work lives easier.

Time-tracking systems don’t only work to your benefit as a business owner. They make your employees’ work lives better, too.

At first glance, you might worry about a time clock interfering with the process of building goodwill at a small company. But the myth that punching a time clock suggests a lack of trust between employers and employees is just that—a myth. By introducing time tracking software to your team in a positive light at the start, your employees will see that it’s not about control but about fairness and saving time—something that will make their work lives easier.

Far from being a show of your distrust in your team, time clocks help you: process payroll more efficiently; ensure there’s fairness in the workload and in taking breaks; reward employee honesty; and keep a better watch on who’s owed time off. They even help you to filter out employees who don’t care about building a positive workplace culture, helping you create an environment centered on trust and respect.

Across the board, your small business needs a good employee time clock to effectively track time—especially if you have hourly employees on your team.

Employee Time Clock Benefits

Here are the top benefits of an employee time clock system for your small business:

  • It makes payroll easier. A time clock ensures employees are being paid what they’re owed, and you’re not wasting time correcting paychecks.
  • It helps you see where you can reduce labor costs. By accurately tracking how team members use their time while at work, a time clock helps you spot any time drains and make potential adjustments.
  • It minimizes the chance of time theft. With a better picture of a worker’s clock-in and clock-out habits, it’s easier to spot time fraud.
  • It lets you regularize employee attendance. You’ll be alerted to any attendance inconsistencies, helping you separate coincidences from regular absenteeism.
  • It helps your business stay compliant. With an accurate picture of hours worked, you can make sure your business is compliant with the Fair Labor Standard Act (FLSA) and all state and local laws.

Taken together, all these benefits make your time tracking system your company’s superpower, letting you focus your time and energy on other parts of your small business.

The 6 Most Important Time Clock Features

Many factors matter when you’re settling on the best time clock system for a small business. When making your choice, you’ll want to look for certain essential features—the must-haves for making your time-tracking system work in your favor.

Here are six features that should be non-negotiable:

1. Payroll Integration

Employee time tracking goes hand-in-hand with payroll processing. As anyone in payroll will tell you, it’s certainly not as simple as paying your employees a check for the same amount every week or two.

Any pay-related mistakes can be a big turnoff for your employees—nothing annoys your team members the way inaccurate paychecks do. Plus, to avoid getting fined by the Internal Revenue Service (IRS) for late or insufficient payments, you also need to stay on top of payroll taxes and compliance.

That’s why it’s not surprising that many thriving small businesses streamline their processes, integrating payroll with time tracking to make sure that both are error-free.  When approved hours, overtime, and PTO sync seamlessly with payroll, you don’t need to waste time on manual data entry.

2. Overtime Calculations

Overtime adds up quickly, if you don’t have a good system in place—especially with hourly employees—it can be ripe for issues. Workers are tired and less effective at their jobs, your labor budget increases: significant overtime isn’t an ideal situation for anyone.

An ineffective time management system can be at the root of your overtime issues. Whether intentionally or not, employees can clock in and out when they’re not supposed to. Over the space of a week, even if it’s just a few minutes early or a few minutes late, inaccurate clocking-in can push them into overtime territory. Look at it this way: the extra time accumulated by early clock-ins can cost businesses an estimated average of $100 per month, per location.

You can’t watch over every single-time entry. Quite frankly, it’s a waste of your time trying to figure out the number of overtime hours due for payroll. Your employee time clock should help you make overtime the exception, not the rule.

Your time tracking system should let you set when your work week starts, select what overtime wage type applies to each employee, then automatically register that team member’s overtime hours. Web-based and mobile time clocks can even send you notifications when a given employee has hit overtime.

3. PTO Tracking

Along with carefully monitoring overtime, keeping careful track of breaks and PTO (paid time off) is another key part of an efficient and well-run time tracking system. It’s also vital to the happiness and satisfaction of your team members, helping avoid employee turnover. The benefits of taking time off extend to both your workers and your business, adding to productivity and producing higher-quality work.

Your time-tracking system should be able to track your employees’ paid and unpaid breaks. It should reduce the costs and manual administrative tasks associated with vacation scheduling by automating the whole process, from putting in leave requests and approvals, to preparing PTO reports.

When you—and your team—aren’t worried about tracking 15 minutes here and 15 minutes there, or trying to navigate paid time off requests and longer vacations, you’ll all be more relaxed and less stressed.

4. Comprehensive Reporting

No matter how much data your time clock system is collecting, without good reporting options, you won’t be able to fully analyze and benefit from the information or predict your job costs.

You’ll want to look for a time tracking system with comprehensive reporting options like attendance, job costing and payroll reporting. Choose an option with multiple exporting options and the ability to customize your reports.

5. User-Friendly Interface

Is your time tracking system difficult to use and understand? It shouldn’t be. Because if your chosen time clock software has a confusing or cluttered interface, it will instantly become counter-productive for your team. Plus, you’ll waste time helping your team members troubleshoot issues if they’re constantly coming up.

Make sure your time tracking solution is easy to install, access and navigate. If you have remote employees or field workers, then ease-of-use is especially important.

6. Good Customer Support

Your time clock software should offer quality customer support, whether by email, phone, or live chat. Look into how knowledgeable the support is, the average response time, and how much emphasis they put on the customer experience.

Beyond these essential things to look for in an employee time clock system, there are a host of advanced features that can benefit your business depending on its needs and challenges. These include:

  • Biometric data-scanning like facial recognition
  • “Picture on punch” clock-ins
  • Geofencing
  • IP address locking
  • And more (read on!)

Types of Time Clocks, and How to Choose the Right One

There are a lot of different time tracking options for small businesses on the market, and each one has its own unique features. Some have higher ratings, while others promise more advanced functionality. To decide on the right solution for your business, it’s important to understand their differences. Here’s our across-the-board breakdown.

Time Punch Clock (Clock Card Machine)

Punch-card time clocks, also called clock card machines, are physical devices installed at a central location, which go back as far as the turn of the twentieth century. They require an employee to insert their timecard to be stamped with the time their shift starts and ends. A manager then needs to gather all the timecards, manually inputting the hours worked into the company’s payroll.

Though employees can move through the line quickly as they punch their cards, much more time is required to compile and record the associated data, especially if your business has a larger number of employees. Because of the sheer number of timecards and amount of data, an employee is usually dedicated to the collection and processing of time data.

Once the data has been collected and processed, it still needs to be entered into some form of database for employees to get their paychecks. As with any kind of manual system, there’s a high chance of entry error.

Physical timeclock devices can cost several thousands of dollars to purchase and install. You’ll also spend more on physical items, since unlike digital time-keeping systems, time punch clocks rely on a constant supply of paper timecards.

Electronic Time Clock

An electronic time clock is the modern evolution of the original analog time clock, and leaves behind many of the problems inherent with paper timecards. Three of the most popular types of electronic time clocks for businesses are:

  • Digital (either hardware-based or software-based) time clocks
  • Biometric time clocks
  • Mobile time clocks

Proximity Time Clock (Card Swipe Time Clock, Fob Time Clock)

A proximity time clock is a kind of digital time clock. With a proximity time clock, the employee has an activation device that they keep with them at all times. Whether it’s a barcode that gets scanned on their ID badge, or a dedicated swipe card or fob, this style of time clock usually connects to time-tracking software that logs each person’s time punches throughout the workday.

A common pitfall of proximity time clocks—and hey, we’ve all been that person—is when employees lose their activation device or leave it at home. And if you’re using magnetic strips in activation devices, they’ll need replacing when they wear out.

Keycode Time Clock

A keycode time clock is another kind of digital time clock. Some keycode time clocks require employees to enter a password or a personal identification number (PIN) when they start and end their work. Keycode time clocks often work as a second form of identification to other entry methods like a barcode.

It can be a headache—not to mention add to your costs—when someone forgets their credentials, since a tech support person is needed to assign them a new entry code. It can also be a little more slow-going to your process if you have a larger group, as employees will have to wait in line a bit longer to start work.

Online Time Clock

An online time clock is a software-based form of digital time clock. Online time clocks let employees punch in and out through a web browser on any computer, logging in with their unique credentials through a secure webpage.

After accessing the system, they enter their workday start and end times. They can also log the start and end time of unpaid breaks like their lunch hour, and many online systems also offer auto-lunch deductions. The web-based time clock is a solution that easily integrates with the other platforms you use, helping you streamline your processes and avoid manual data entry between platforms. An online timesheet or time tracking software makes it much easier for you to calculate hours and create payroll reports and wages for each team member.

One of the biggest advantages of using an online time clock is the multiple features that come with this solution. As a manager, one look at the dashboard of an online time clock gives you an exact view of who’s working and who’s out-of-office at a given moment. You can easily see at what time people left or arrived at work, and at which location—a bonus if you have multiple locations.

From your employees’ perspective, using an online time clock can help you create a modern workplace that attracts and retains top talent. By using insights into workflow, team communication and productivity, you can make helpful changes that support your employees.

Is your team made up primarily of desk-based employees who work on the same computer all day? If that’s the case, then this kind of time tracking system could be a great solution for you.

Biometric Time Clock

A biometric time clock is a time tracker that uses biometric data—a person’s unique physical qualities—to confirm identity. Biometric time clocks can rely on voice or facial recognition, fingerprints, palm-prints, or iris scans.

No longer just fun gimmicks from a sci-fi thriller, biometric devices are becoming increasingly popular—just look at a typical smartphone these days. They can also be used for security purposes when placed at an entry point, permitting only authorized workers to access a designated area.

Biometric time clocks are easy to set up and use. No password to remember, no complicated code. Biometric time clocks also prevent time theft like buddy punching, when one employee clocks in and out for another in an effort to cheat the system. It’s a problem that many small businesses have to deal with, but with a biometric time tracking system, you ensure that only the individual employee can clock in for themselves.

Employee Time Clock App (Mobile Time Clock)

A mobile electronic time clock—also known as a time card app—is an employee time clock software that lets employees clock in and out using a smartphone or tablet, rather than using a web browser on a computer.

Employees can access the mobile time clock through an app on their mobile device. Using GPS technology to verify the location of the employee, a mobile time clock lets employees accurately clock themselves in and out no matter where they are. Some mobile time clocks also use biometric technology like facial recognition to verify the employee’s identity.

An employee time clock app is especially helpful for remote employee time tracking, or if your team works from different locations. Construction workers, for instance, can’t instantly access a web browser-based time clock while working at a construction site. Because mobile time clocks reduce your business’s dependence on physical devices—many people already own a mobile device, after all—they can help you lower your equipment costs and maintenance expenses.

Picture on Punch Clock-Ins

An employee time clock app can also be a biometric time clock, allowing for “picture on punch” clock-ins. This means you can have employees’ webcams and built-in cameras take their photo whenever they clock in or clock out, giving you extra security to cut down on time theft or buddy punching.

Geofencing

Some mobile time clock apps include geofencing, which allows the app to work only within a specific area, or lets you record an employee’s exact location when they clock in and out. Another feature that mobile time clock apps can provide is IP address locking. This allows you to tighten your security even when employees are working out of office, ensuring that your team members only log in from secure locations.

Push Notifications

Many top time tracking apps have push notifications that prompt team members to stay within their scheduled hours. That way, there’s less risk of them working longer than planned or forgetting about a shift. As a manager and or business owner, you can also receive alerts for late arrivals and no-shows, so you can quickly find someone else to come in.

Tme Tracking Gamification

Another benefit of mobile time clocks, especially for younger workers who already have their phones in hand? You can consider gamifying time tracking. Gamifying is a fun way to encourage employees to manage their time more effectively, not to mention a great way to reward your staff. When your team members automatically hear a word of encouragement—some form of “way to go!”—after practicing good time tracking, they’re more likely to remember to clock in and out, even if they’re having a hectic day, are rushing or running late, or have other things on their mind. In other words, employee gamification helps you make time tracking more engaging. It’s a fast, simple, low-cost way to boost productivity, and if you have a top employee time clock app, you can start right away. Talk about a win-win for both employees and employers.

Read more: Top 10 time clocks for small businesses in 2023

Homebase: The Best Employee Time Clock for Small Business

The best employee time clock for your small business? That’s Homebase. With robust features and benefits that combine affordability, ease of use, and versatility, we’re here to meet your most pressing needs as a small business owner.

Our free time clock app can be downloaded to smartphones, iPads, computers, POS devices, and more. Employees can use a unique PIN to log in, or you can set our software to take a photo of the person clocking in to confirm their identity. Buddy punching? Not on our clock.

Homebase also helps prevent unintentional time theft for employees who clock in early by accident, or people who forget to clock out. On top of the theft-prevention perks for your small business, our easy-to-use app empowers employees with access to their latest schedule, time cards, team messages, and more.

You and your team can benefit from comprehensive features like GPS time tracking and geofencing, integrated full-service payroll, hiring and onboarding and team chat, as well as HR and compliance tools to cut down on excess software and endless data entry. You can easily and effectively track hours, breaks, overtime, and paid time off—all with one system.

Our customers praise Homebase because of its clear, straightforward navigation and intuitive design. That means you can trust your team members to install and use the app with minimal training or troubleshooting.

There’s a reason Homebase is the top-rated time clock app—it helps you minimize time theft, control labor costs, track hours, prep for payroll, and more. Our time clock tool is free for up to 20 employees, and we include many of our time tracking features in our lowest-cost plan.

Save time with smarter time clocks. Try Homebase’s time clock tool for free. Get started today.

The Best Employee Time Clocks: FAQ

What is an Employee Time Clock?

An employee time clock is a system that tracks employee time and attendance, collecting data when employees clock in and out, and monitoring the time spent completing work tasks.

Why are Employee Time Clocks Important for Small Businesses?

Employee time clocks are important for small businesses because they make payroll accurate and automated, help business owners see where labor costs can be reduced, minimize the chance of time theft, help regularize employee attendance, and make it easier for companies to stay compliant with labor laws.

What are Essential Features of an Employee Time Clock?

The essential features to look for in an employee time clock include payroll integration, the ability to calculate overtime, PTO tracking, comprehensive and customizable reporting, a user-friendly interface, and good customer support system.

What are the Different Types of Time Clock?

The different types of time clocks include biometric time clocks, online time clocks, proximity time clocks, card swipe time clocks, keycode time clocks, mobile time clocks, electronic time clocks, time punch clocks, clock card machines, time clock desktop software, and time clock mobile apps like Homebase.

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